Proprietatea Fund Swings To Net Profit Of RON14.1M In 1Q

05.13.2011 ZF English

Romanian investment fund Fondul Proprietatea (FP.RO) Friday reported a first-quarter net profit of 14.1 million lei (EUR3.4 million), compared with a loss of RON23 million in the year-earlier period.

The fund's revenue rose to RON33.3 million, from RON20.1 million in January-March 2010, mostly due to reversal of an impairment adjustment related to litigation with gas pipeline operator Transgaz (TGN.RO), Fondul Proprietatea said in its quarterly financial report.

It said costs fell to RON18.5 million in the first quarter, from RON43.1 million in the same period a year before, as the forex-related costs slumped. Expenses from foreign exchange differences were of just RON0.3 million in January to March, from RON38.3 million in the similar period of 2010.

The fund's net asset value (NAV) was of RON16.5 billion at the end of March, compared to RON15.3 billion at the end of 2010.

"The positive performance of Fondul Proprietatea's NAV in the first three months of 2011 was correlated with the overall favorable conditions on the Bucharest Stock Exchange, which was reflected in the valuation of the listed part of the fund's portfolio," Proprietatea said in its financial report.

"In addition, the new investments made by the fund in the first quarter had an important contribution to the positive NAV performance," it added.

In the first quarter of 2011, Proprietatea increased its exposure to Alro (ALR.RO), Azomures (AZO.RO) and BRD-Groupe Societe Generale (BRD.RO) and added two new holdings to its portfolio, namely Erste Group Bank (EBS.RO) and Raiffeisen Bank International AG.

Created in 2005 to compensate Romanians whose properties were confiscated by the communist regime, Proprietatea fund was listed in January 2011 in Bucharest. It is managed by Franklin Templeton Investment Management.

The Romanian Finance Ministry owns 36.8% in the fund, with the rest distributed among foreign and local investors.

Friday, Proprietatea closed up 1.7%, at RON0.534 a share. (EUR1=RON4.106)