Fondul Proprietatea SA (FP) Earnings Call Transcript & Summary

Good day, and welcome to the Fondul 2021 results conference call. Today's conference is being recorded. And at this time, I would like to turn it over to Marius Dan. Please go ahead, sir.

Thank you. Good afternoon, and welcome, everyone, to our conference call to discuss the 2021 annual results of Fondul Proprietatea. Johan Meyer, CEO of Franklin Templeton International Services, Bucharest branch is fund manager of Fondul Proprietatea SA, Catalin Cadaru, Head of Financial Reporting and myself are pleased to host today's call. The 2021 annual results report can be found on the Fondul website in the financial results section and the presentation that we'll be discussing was also sent out to you earlier today. It's also available on the Fund's website at www.fondulproprietatea.ro under Investor Relations Call section. After the presentation, we will have a 30-minute Q&A session. As a reminder, the call is being recorded, and the recording will be available on the Fund's website right after the call. That being the agenda, I'll turn to Johan to start off with the presentation.

Thank you, Marius. And firstly, let me start by saying that our thoughts are with the innocent people that are affected by the conflict in neighboring Ukraine and that we hope with all sincerity that the actives in the conflict will be able to find a swift resolution that minimizes human suffering. Second, I'd like to thank my colleagues at Franklin Templeton for preparing these results and what continues to be sometimes very challenging conditions and that we're able to share these results with you today. Now moving on to the discussion regarding the results. I'd like to start with Slide 2 of the presentation. Here, we highlight the key facts about the Fund. At the end of January, the Fund's net asset value was RON 13.6 billion or $3.06 billion and the NAV per share reached RON 2.3161 or USD 0.52. Total dividend yield for the 3 distributions approved by shareholders last year is just over 11%. On the right-hand side, you can see the evolution of the Fund's adjusted share price and the discount or premium, since the Fund's listing in January 2011. Since Friday's close, the Fund was trading at a discount of 13.7% for the shares and 14.3% for the GDRs. Moving on to Slide 3. We present the Fund shareholder structure as of 31 January 2022. As we already reported on the 1st of February, the Romanian State, represented by the Ministry of Finance paid RON 189 million to Fondul Proprietatea as a payment for all the unpaid shares owned by the Romanian State. The registration of the payment of the share capital and the new values of the proportion of the share capital, the subscribed and paid up -- finally, the subscribed and paid up will go inside as well as the total voting rights of the Ministry of Finance has been registered with the trade registry and is currently in the process of being registered with the Financial Supervisory Authority as well as the central depository. Now moving on to Slide 4. We show a summary of the net asset value, the share price and the GDR performance since 2011 and the evolution of the Fund average annual discount on the Bucharest Stock Exchange and the London Stock Exchange. The net asset value total return in the first month of the year was 2.4%, and the total return for the local shares was 5.3%, while the total return from the GDRs was 0.1%. On Slides 5 and 6, we show the contributors to the Fund's NAV performance in the fourth quarter of last year as well as for the 2021 year. The top performer in the fourth quarter was Hidroelectrica, following the update on the independent valuation report for the company. Listed holding OMV Petrom, is the next best performer for the quarter, following the strong share price performance on the company. As mentioned earlier, the valuation updates in accordance with the international valuation standards were prepared for 19 unlisted holdings with the assistance of KPMG Advisory and Darian DRS. The valuation date was 31 October 2021, and the reports also considered the related subsequent events until 31 December 2021 such as dividends declared or changes in the legislation. Following the valuation updates, Bucharest Airports, Salrom and Constanta Port are also on the top performers list for the last quarter of the year. The main detractors or bottom performance in Q4 were the unlisted Engie and E-Distributie companies as well as the listed holding Alro. The overall performance for NAV was positive 8.7%. For the full year 2021, shown on Slide 6, we have the same top performance -- top performers as for the fourth quarter. On the bottom performers were the listed companies, Alro and Romaero, followed by the unlisted E-Distributie Banat, Zirom and ENEL Energie Muntenia. Overall, the performance of the NAV per share for 2021 was at 33.3%. The Fund will continue to closely monitor the evolution of financial markets and that of the specific industries, the unlisted holdings operating for each NAV reporting date. And of course, if necessary, an update of the multiples analysis will be prepared and the valuation of the unlisted holdings will be updated accordingly. Moving on to the next section. We're giving you an update on the Fund's portfolio. On Slide 8, we show the portfolio structure as of the end of January, 85% in unlisted company, 70% in listed equities and 7% in net cash and receivables. The net cash and receivable position at 31st of January was $227 million. The payment made by the Romanian State on the 1st of February will be recorded in the Fund's February NAV and will generate an increase in total assets of RON 189 million and the number of paid-up shares by 363.8 million, while the total impact on the NAV per share will be a decrease of 4.5%. On Slide 9, we present the top 10 portfolio companies as at 31 January 2022, representing over 90% of the Fund's net asset value with Hidroelectrica representing almost 67% of the Fund's NAV. On Slide 10, we show a summary of the 2021 preliminary financial results for the main portfolio companies that have released results so far for last year, and I will elaborate a little bit more on these figures in the following slides. Slide 11, we provide some updates on Hidroelectrica. According to information provided by the management of the company, the preliminary figures for 2021 show, on an unconsolidated basis, a turnover of RON 6.3 billion, representing a 65% year-on-year increase as well as an EBITDA figure of RON 4.6 billion, an increase of 71% year-on-year. During the year, total electricity sold reached 17.1 terawatt hours, up 7.1% year-on-year, out of which electricity sold out of its own production reached 16.5 terawatt hours, up 13.1% year-on-year. The average realized electricity selling price was RON 336.9 per megawatt hour, an increase of 57.5% year-on-year. At the end of December '21, the company's cash and equivalents stood at RON 3.36 billion. Now moving on to Slide 12. We present the main updates on OMV Petrom, the Fund's second largest holding. On 20 January '22, the Fund announced an agreement to sell 2.275 billion ordinary shares in OMV Petrom, including a 50% exercise of the upside option funnel -- helped by funnel in the company following the completion of an accelerated book build. The selling price was $0.43 per share, in other words, 8.5% discount to the last closing price before the announcement. The gross proceeds amount to RON 978 million and will be used to implement the funds discount control mechanism by funding the buyback program as approved by the Fund's shareholders and also the potential payment of dividend to the Fund's shareholders in the absence of exceptional market conditions or circumstances and, of course, being subject to restrictions under Romanian legal or tax regulations and, of course, are being subject to shareholders' approval. After settlement, the Fund's remaining participation in Petrom represents 2.98% of the company's share capital. In December, the company published its 2030 strategy report. The key pillars are; a transition to low and 0 carbon with a greener and more diversified portfolio being reached by investing in biofuels, alternate mobility and renewable power generation as well as other new technologies. The target for the company is to become target neutral by 2050. Also it tends to grow regional gas. The target is to increase the share of the gas in the portfolio to 70%. In this context, the Neptun Deep project is considered strategic. Also another pillar here is traditional business optimization, with the outlook for gasoline and diesel demand to remain strong for the next decade. Therefore, OMV Petrom intends to continue to modernize and further integrate the current assets, ensuring security of energy supply and continued generation of value. Regarding the 2021 preliminary results, sales to the external customers increased by 24% compared to the previous year, mainly supported by higher prices and volumes sold on petroleum products. The Clean CCS Operating result was over 47% higher compared to 2020 on the back of increased oil prices, better refining margins and improved performance of the power activity. 2021 net income was RON 2.8 billion versus -- just below RON 1.3 billion in 2020. The Executive Board proposed a 2021 dividend per share of RON 0.034, up 10%, compared to the previous year and on the upper limit of the yearly increase in dividend payments guided in the latest long-term strategy. Moving on to Slide 13. We present some updates on Bucharest Airports. The 2021 preliminary results show a net profit of RON 42.8 million, but the figure does not include end of year adjustments such as provisioning. Traffic was recorded at 6.9 million passengers, in line with the budget, but still down 53% compared to pre-COIVID level. Management expects traffic to increase by 40% in 2022, reaching 9.7 million passengers and thus envisages a profit of RON 56.5 million. The latest traffic report from ACI Europe, the airport industry trade body, reveals the traffic in EU airports increased in 2021 by 244%, but still 42% below 2019 pre-COVID levels. Regarding the Baneasa Airport share capital increase following the 13 January 2022 hearing, the Bucharest Court of Appeal admitted the Fund's request for the suspension of the extraordinary shareholder meeting decision regarding the share capital increase and ordered the suspension of the effects of the share capital increase until the claim for the annulment of the meeting is irrevocably settled. Moving on to Slide 14, we show the latest operational figures for Constanta Ports. Preliminary 2021 results point to a net profit of RON 109 million, down 16% year-on-year, as operating costs are estimated to have increased by 24% in '21 compared to the previous year. Traffic reached an all-time high of 67.5 million tons of merchandise. Significant changes might be recorded in final 2021 financial results due to end of the year results, again, for example, provisioning. Now moving on to the corporate actions section, I'd like to invite Marius to comment. Over to you Marius.

Thank you, Johan. Moving to Slide 16, we outlined the Fund's distribution since we started managing the Fund. For 2021, the total distributions exceeded RON 1.5 billion and the amount includes the buyback executing during the 12 buyback program as well as the 3 special gross distributions approved by the Fund's shareholders during the year. For 2022, we are showing here the estimation for the RON 12.5 per share gross dividend distribution that we propose for shareholders' approval in the upcoming annual shareholder meeting that will take place on the 20th of April. And this will bring the total distributions that we have made since 2010 to RON 16 billion or approximately $4.2 billion. Moving forward to Slide 17, we outlined the latest update on the Fund's buyback programs. On 31st of January, we started the execution of the 13th buyback program, and this is for just over 12% of the outstanding shares. The program is for the acquisition of 800 million shares. And so far, for the shares that we bought back until the 18th of February, the average share price paid in the repurchases was around RON 2.0757. We're also closely monitoring the discount to NAV, given the current volatility, and we will act in accordance with the discount control mechanism as our cash position allows us to do so. And at any point in time, now that the quiet period has ended, we will be able to accelerate the buyback program through a tender offer. Moving forward to Slide 18. We outlined the gross cash distribution proposal for 2021 financial year. The Fund reported audited net profit of around RON 5 billion for 2021 and in line with the cash distribution policy. The amount is calculated as the sum of the Fund's annual dividend income from portfolio companies except special cash distributions plus interest on the cash balance, less expenses and taxation and less compulsory allocation to reserves according to the regulations in force in each case for the year. For the 2021 financial year, the distributable profit is based on the calculation mentioned above, is RON 303.5 million. However, taking into account the high-level of 2021 accounting profit, the existing cash balance as well as our estimation of a high level of future cash position based on the cash flow forecasting for the coming months through a combination of disposals and dividend income, our proposal is to distribute a gross special dividend of RON 0.125 per share. The main dates related to the proposed gross cash distribution approved by the Fund shareholders will be 2nd of June as ex-date, 3rd of June has registration date and the 27th of June as the payment date. Moving forward on Slides 19 and 20, we include the main points on the agenda of the Annual Shareholder Meeting to be held on the 20th of April. And just a few points that we want to highlight, the approval of several amendments to the Constitutive Act of the Fund, the approval of the decrease of the subscribed share capital due to the cancellation of the shares acquired in 2021, presentations of the performance report as well as the Board of Nominees annual report for 2021, the approval of the Annual Activity Report of the sole director of Fondul Proprietatea; the approval of the remuneration policy of the Fund, and the approval of an increase of the gross monthly remuneration for each member of the Board of nominees by 10%. The approval of an additional fixed gross monthly remuneration for the chairperson of the Board of nominees of 25% of the base monthly remuneration and of an additional fixed gross monthly remuneration of 20% of the base for the Chairperson of the Audit and Valuation Committee as well as the Chairperson of the Nomination and Remuneration Committee. The approval of an increased notice period in case of withdrawal from the position of member of the Board of Nominees from the current 15 working days in advance to 3 months in advance. The appointment of a member on the Board of nominees following the resignation of Mark Gitenstein. The approval to cover the negative reserves arising out of the cancellation of the treasury shares acquired during 2020 through the 11th buyback program. The approval to allocate to other reserves on amount of RON 230.6 million from the 2021 net accounting profit to be used for covering the negative reserves estimated to arise from the cancellation of treasury shares acquired during 2021 in the 12th buyback program. The approval of the 2021 remaining net accounting profit, including the approval of the distribution of the annual gross dividend of RON 0.125 per share mentioned before, approval of additional fees incurred by Deloitte, the auditor and the approval of the continuation of the current mandate of Franklin Templeton International Services as AIFM and sole director of Fondul Proprietatea. In case the point above is not approved by shareholders, this refers to the approval of the continuation of the current mandate of Franklin Templeton. Either the approval of a simultaneous termination of the mandate of Franklin Templeton as AIFM and of the management agreement, beginning with the earliest of either the appointment of a new fund manager and sole director in accordance with the terms of the management agreement or 1st of November 2022 and then the procedure to be observed for the selection of a new fund manager and sole director, which would be a secret vote. Moving on to Slide 21. You can see the 2022 financial calendar for Fondul Proprietatea. Given our current expectation for the Hidroelectrica IPO to take place later in the year, it is our intention to organize an in-person Investor Day during September 14, though the 16 of 2022, which would include, ideally, a site visit to the Hidroelectrica Iron Gates power plant, which is the company's largest asset, final discussions as well as one-on-one and group meetings. And in that regard, we would appreciate any feedback regarding your ability and/or desire to travel to Romania before we start engaging or incurring any cost for such events. So would appreciate any kind of feedback you could send our way. The Fund financial results for the year are presented on Slide 23, 24, and I would like to invite Catalin Cadaru, Head of Financial Reporting to comment.

Thank you, Marius. For the balance sheet of Fondul as at the end of 31st of December 2021, the most significant event related to the increase in the portfolio, mainly driven by the strong performance of Hidroelectrica and the increase in share price for OMV Petrom. And related to Petrom, we should note that the part of the shares that were disposed during January 2022, were presented separately in the balance sheet as noncurrent assets held for sale. This is only a presentation requirement. No adjustment was made to the valuation of the shares. In terms of the liabilities, you can see an increase of the balance at the end of last year, and this is due to the third special distribution that was approved during 15 of December GSM, for which the payment date -- the payment started on 18th of February 2022. Moving on to the next slide. You can see the audited profit mentioned by Marius early of -- earlier, of just about RON 5 billion. The main contributor for this profit was the change in the fair value of the portfolio coming again from Hidroelectrica and Petrom as well as the gross dividend income of RON 655 million coming also from Hidroelectrica and Petrom. Thank you, Marius.

Thank you very much, Catalin. At this point, we would like to open it up for any questions.

Yes, I see we already have a couple coming in through the web.

Yes, we have few questions. Go ahead, Johan.

Yes. No, I'll start with those. So the first one comes from [ Peter ] with the Intercapital asset management. Can you comment on the Hidroelectrica IPO? Yes, what -- the next step that lies ahead is obtaining shareholder -- formal shareholder approval at the level of Hidroelectrica to commence with the IPO activities and preparations. So in the meantime, we have started with a selection process for advisory services to support us in the process. And in the background, the conversations continuing between ourselves and the majority shareholder and various other stakeholders. But the next main milestone to look forward to, as I mentioned, is the formal agreement between shareholders for the listing of the company. And as we mentioned last week, during the ZF Power Summit, we would have an object of having the company listed by the end of this year. Moving on to the impact of the conflict in Ukraine on the business, again, from [ Peter ]. Still very early in the process. I think one company that could potentially be affected is Alro, having a Russian majority shareholding. And there may be, as we've seen comments from foreign ministry, potential impact on [indiscernible] refund being paid to those companies. But that remains to be seen. Other companies in the portfolio are very limited, if indeed, any impact. Third question from Peter. Can you comment more on the history of the Ministry of Finance shareholder deal? So the history of this goes back to when the Fund was set up in 2005. So there was an initial value of the fund that was determined. And subsequent to that, there was an independent valuation done on the assets that were actually injected into the Fund. There was a difference between that with the value of the underlying assets, not meeting up with the initial value of the Fund. And there, these unpaid shares were created. So the Ministry of Finance was able to redeem during this period with additional cash contributions or payments in kind, and they have done so in various instances in recent years. I think the last transaction, which has occurred, was around 2014. And the beginning of February, we received the notification that they intend to make the payment for the full balance of the unpaid shares. So that is a historical issue that has now been resolved. Moving on to a question from Iuliana from Wood. What triggered the latest revaluations for?

Before we do that, we have 2 questions on the phone, and we can come back to the questions online. So operator, please go ahead.

We'll take our first audio question from Caius Rapanu in [ BZR ].

I'm just coming back a little bit to the time line of Hidroelectrica listing. We were expecting this shareholders' meeting to have happened already in January and February. Do you have any idea why is it being delayed? And when do you expect it to happen? And if do you -- if you are finding any kinds of pushback from different parts of the government against that?

Yes. I think the only outstanding part of the discussion is support for a dual listing. So what we have at the moment is, as publicly indicated by the Minister of Energy is a support for listing in Bucharest, but obviously, considering the potential size of the transaction and the valuation that we would like to achieve, we are of a very firm opinion that to make it success and to meet the requirements of the recovery and resilience program that a dual listing would be necessary. So that is a discussion that continues with the Ministry of Energy and other stakeholders, but we intend to move ahead with the overall process as soon as practically possible.

And realistically, when should we expect this shareholders meeting to take place?

It's -- in the short term is all I can say. We do not -- there is certainly not an intentional effort to delay this, but we would like to have all the understandings in place, and we still need to have a couple of very high-level discussions in order to see what will be possible. But I think the -- my initial comment on the target time line holds, before the end of the year. I think the critical date there is no later than the 12th of November considering the need to use the interim financials or the half year financials for Hidroelectrica. So that would be the objective.

Thank you. And we'll take our next question from Deepinder Bhatia in Bayard Asset Management.

Actually, Caius already asked a portion of the question I had about the evolution of the discussion about the dual listing. So just follow-up to that, not very technical, but I think Johan, you were on a panel recently, where representatives from the local stock exchange and others were vociferous about the capacity of the local market to be able to absorb this deal. This was some local financial journal that had hosted it, I guess. Just curious, is the signaling or the body language so far emerging one of likely to be a head on, I don't want to say, conflict, but at least a head-on issue between Fondul and other relevant players who would love to see the entire listing done domestically? And then I have a second question as a follow-up after that.

Thanks, Deepinder, and good to hear from you. Yes, I certainly wouldn't say a head on conflict. What we are clearly trying to do is to present the benefits of a properly structured listing for Hidroelectrica considering the potential of the company in terms of size, in terms of liquidity. And we would just like to have the maximum flexibility as we go through this process. And that is the message that we're trying to communicate. And I think it's for all to see what the potential is of the Bucharest Stock Exchange. But when you compare existing size or the size at least in terms of our valuation and the potential size of it Hidroelectrica then it's clear to see that there may be some challenges in getting such a stake listed only on Bucharest. So there are a couple of variables in this equation. Of course, we would like to see the company listed. We would like to see an appropriate value placed on the asset but it goes back to the principle that any transaction will require shareholder support. And we do have the confirmation that we have support to go on with the process, and we're just trying to go through this. And as I said, just to make sure that we have the appropriate level of flexibility in order to maximize value here. But yes, I cannot comment in terms of how exactly this is going to play out. But obviously, we're very firm in our position and this is clearly in the interest of all shareholders that we're trying to do this.

Dealing with conflicts and potential conflict is something that I've always thought of at Fondul as a core business competency. So I don't worry about that at all. I'm sure you'll figure out exactly how to best resolve this. So no issues there. There is a deadline by which the Romanian government has to make certain changes in its capital markets, including such as the listing of Hidro in order to be able to legitimately accept certain European funding. I apologize I'm not fully clear on the details, but is there a deadline by which they are required to check off this box? And what is that deadline, if there is once that's actually already more or less well written in stone, I guess?

In the recurring resilience program, Marius, please correct me if I'm wrong, but I think it's June 2023.

Yes, that's correct. The government has to -- has undertaken this responsibility to have a listing of Hidroelectrica by June 2023, but the language in there is quite broad, so it doesn't specify whether the Ministry of Energy would have to sell 15% of the company or whether it's them supporting an IPO, which is done by like Fondul selling their stake, a 15% stake in the company would also fulfill that criteria. That's something that we're discussing with them, and they will probably get more clarity from the European Commission. But we are proceeding under the idea that we will be the only sellers in the IPO. And of course, if at any point in time, the Ministry of Energy will decide to sell a stake in the company they will already have a listed company. So it would be much easier to do an accelerated book-build offering or a secondary offering.

There are no other audio questions at this time.

Marius, if you don't mind the -- or Catalin perhaps the latest reevaluation for Hidroelectrica, obviously, there are a couple of points here that we perhaps can't comment on. For example, power price, but I think it's just due to provide the context on the revaluations, please.

Sure. Do you want me to take this, Marius?

Sure. Go ahead, Catalin. And I can fill in, if necessary.

So the main reason, the report was related to Hidroelectrica results during Q4. Usually, our annual process is based on the financial information of the companies as at 30 of September 2021 in our case because this also takes a lot of time. And usually, at the end of the year, we check whether something significant happened during the last Q4. In this case, we obtained after the NAV publication, the first draft preliminary results from Hidroelectrica. And we have said that this would have a significant impact, and this is why the additional report was prepared. Because we were still in the adjusting phase of the financial statement. It is reflected at the 31st of December in the financial statement. And it was incorporated in the January NAV as soon as the valuation report from KPMG was finalized and all the approvals were obtained. So the latest report covers the full 2021 year of preliminary results of the company. And on the windfall tax, as far as I remember, it is based on the budget of the company because all the valuation report that Fondul is preparing are prepared under 2 methods. In terms of Hidroelectrica, the primary method is the market approach. While the secondary method, the DCF, is based on the company budget and discussion that KPMG is having with the management.

Thank you, Catalin. Moving forward to the next question. Would you guys be able to comment on recent headline that Romanian government will support IP on -- of Hidroelectrica only in Bucharest? I think we've commented on that, and we will continue to engage with the government because we strongly believe that the dual listing of Hidroelectrica will maximize the valuation of the company, given the size of the transaction and the size of the expected market cap of the company compared to the entire market cap of the Bucharest Stock Exchange, which is only $20 billion at this point. Moving on to question #6. Can you comment on the potential reduction of the threshold for windfall tax from RON 450 to RON 300 per megawatt hour, the tax could be applied for 1 year from April 2022 to March 2023, would that delay the listing?

Yes. Very early stages yet. So it's certainly too early to make any comments as it relates to a listing. Obviously, any legislative change that would impact the profitability would have an impact on the valuation for the company and quite frankly, I think, should be avoided at all costs. You understand the context in which this is happening, but I think the legislators need to be very aware of the potential impact here. Of course, this is only in draft form at the moment, and there will be various consultations over the next weeks before this proceeds to the next phase. but we continue to very closely monitor and engage with the relative with the related bodies in order to discuss the potential impact of such a change in legislation.

And moving on to the last question that we have online. Could we know what is stopping the Ministry of Finance from accepting the dual listing? And this comes from [indiscernible] from CSM. It's not a Ministry of Finance. It's -- I think there is some confusion at the political level in Romania, which we are trying to resolve by explaining what the benefits, not only for the Bucharest Stock Exchange, not only for the company, but for the country, in general, a dual listing of Hidroelectrica would have because the company would be highly visible. It would be the third largest energy producer on the London Stock Exchange. So Romania would be under a lot of spotlight with the IPO and afterwards. So we certainly believe that it would be a missed opportunity not to have the company listed on the London Stock Exchange as well. I think the confusion at the political level comes from some lobbying done by local stakeholders as well as the numbers that we've seen in the media and most likely used in private discussions with political stakeholders regarding the size of the transaction because we continue to see EUR 1 billion to EUR 1.5 billion as the size of the transaction. And that number is not correct because we -- if we think about listing 15% of the company, of course, depending on the valuation, we are expecting significantly higher numbers than that. And in order to generate a strong book, we need a dual listing because we would have to have the transaction 2 or 3 times oversubscribed. So we are putting in a lot of effort to rectify these misconceptions and the arguments that are being currently used to stop a dual listing, which we consider that are not correct. And we certainly hope to reach a resolution very soon in order to move forward with the shareholder meeting of Hidroelectrica to approve the IPO. And we have once more question from Iuliana Ciopraga at Wood. Can you please provide any color on the price embedded in the valuation -- of the power price embedded in the valuation of Hidroelectrica. I understand it is partially based on the budget. What is the average power price reflected in the budget? I think we've covered the question on the valuation, Iuliana. We refrain from making comments on the underlying assumptions that the company is using for constructing the budget that we've seen in the past few years. These budgets can be exceeded significantly. But since it is not publicly available yet, we can have a discussion on this once the company will publish it. And these are all the questions that we have online. Operator, I just wanted to check if there is a question on the phone.

Yes, we have a follow-up question from Deepinder Bhatia at Bayard Asset Management.

So this is just a technical question. I'm sure there's an easy answer. On Page 6, when I add up the change in NAV performances that are on the positive side of the ledger, it just adds up, just seems to me to about 45%. The negatives on the top 5 are kind of less than 0.5%, it seems to me. So call it about 45% is the net increase -- is the increase just shown by the top 5 positive and negative. But the total NAV change was 33%, and that's nearly a 12% drag on the net NAV change coming from items that are beyond #5 on the negative side of the ledger. There are probably other positives on the positive side beyond #5. I'm just curious, what is it that's causing such a large reduction in the NAV from at least from the top 5 each that we can see on the positive and negative side and the net number that we finally see at 33%.

Deepinder, I think the -- because with the individual companies, what we are reflecting here is the change in the NAV per share. So for instance, for Petrom that's the increase in the share price that has taken place during the period. But you would have to weight this for the holding of the company in the fund's NAV. So that's why the actual impact on the NAV per share change is smaller than if you were to add up all these companies together.

So actually, Marius, I think that this last column is a weighted change, but I may be wrong. I'll go back, have a look at it and reach out to you offline. I'll go back and look at the detailed NAV statement and come back to you if I still have a question.

There's no other questions at this time.

Okay. In that case, we would like to thank everyone for your time today. And for any additional questions or feedback, please feel free to reach out to us at any time. Thank you very much.

Thank you. And this will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.