SIFs Report Record Profit In H1

Izabela Sîrbu

The aggregated net profit of the five financial investment firms (SIFs) surged 72% in the first six months of the year compared to the corresponding period of 2008, reaching 546.2 million RON. The growth was primarily due to sale of legacy stakes in BancPost for a total of approximately 50 million EUR.

SIF5 Oltenia was the most profitable of the five SIFs with 182.3 million RON, up by more than 200% year-on-year. The firm collected substantial revenues from the sale of the legacy stake in BancPost plus 18 million EUR for selling their stake in Automobile - Craiova (RASDAQ:AUCS) to Ford.

SIF3 Transilvania also landed a notable profit of 109.8 million RON, up by 27% from the first six months of 2008. SIF1 Banat-Crisana posted a 68% increase to 91.5 million RON. SIF4 Muntenia posted the smallest profit of the five SIFs (73.2 million RON) as the firm had already sold their stake in BancPost in 2004.

Despite having exceeded expectations in the first half of the year, the SIFs will most probably not manage to achieve substantial growth in the second half of the year, considering that they have already collected dividends from most of the banks in their portfolio and have secured sufficient liquidities for further investments by exiting some of the existing holdings.

At the moment, the five SIFs have an aggregate market capitalization of some 2.2 billion RON, up from 11.5 billion RON in June 2007, when the value had reached a historical peak. The cumulated value of the assets held by the five SIFs gained 1.2% in June, reaching 6 billion RON. This means that the shares in the five SIFs are currently traded for a bit over one third of the net asset value on 30 June.

Shares in SIF3 Transilvania are traded for 68% less than the net asset value, while shares in SIF5 Oltenia are traded for 62% less than the net asset value. SIF Banat-Crisana and SIF Moldova have the smallest gaps between the market value and the net asset value, that is 61% and, respectively 61.5%. With 1.41 billion RON and, respectively, 1.26 billion RON, SIF Transilvania and SIF Oltenia have the highest asset value among the five investment firms.