Events during the quarter
· An external valuation of the Russian fashion retailer Melon Fashion Group
(MFG) in December, resulting in a fair value increase of 59%, excluding dividend
received during the period. The positive net contribution to East Captial
Explorer's total net asset value was 7% per share. After the revaluation, the
total value of East Capital Explorer's holding in MFG is EUR 70m, an increase of
EUR 26m
· An additional 6% of the shares in Trev-2 Group (Trev-2), one of the leading
infrastructure construction companies in Estonia, were acquired from East
Capital Funds for a consideration of EUR 1.5m, after which East Capital Explorer
owns 40% of Trev-2. The acquisition price per share was 12% higher than book
value, which was supported by an independent external valuation. After the
acquisition and revaluation, the Trev-2 holding was valued at EUR 9.8m
· The remaining holdings in East Capital Power Utilities Fund and East Capital
Bering New Europe Fund were divested according to plan
Events after the end of the quarter
· As per 1 January 2014, East Capital has restructured part of their
alternative investment funds in which East Capital Explorer has invested. The
objective is to adapt the funds to the EU regulatory framework for alternative
investment fund managers (AIFMD). Four of East Capital's Bering funds are
included in the restructuring; East Capital Bering Russia Fund, East Capital
Bering Balkan Fund, East Capital Bering Central Asia Fund and East Capital
Bering Ukraine Fund (A), all domiciled in the Cayman Islands. At year-end, these
funds comprised approximately 29% of the East Capital Explorer NAV. The funds
were transferred to two new funds, East capital New Markets Fund and East
Capital Deep Value Fund, domiciled in Luxembourg. For more information, please
refer to page 34.
· In order to be able to take advantage of attractive investment opportunities
in assets which are estimated to generate strong cash flow and good growth, the
Board of East Capital Explorer today announced that it has resolved to convene
an Extraordinary General Meeting 24 March 2014 to resolve upon the introduction
of a new class of shares, preference shares, in the articles of association and
an authorisation for the Board to resolve to issue preference shares. The two
main areas of focus for new investments, the Russian and Baltic domestic
consumer sector, which are expected to continue to benefit from a growing
domestic consumption, and the Baltic real estate sector with current attractive
prices, low interest rates and rising rents provide the conditions for an
attractive dividend yield and positive growth. The proposed financing
possibility, combined with the expected return on these investments, creates a
higher return on invested capital for the owners of ordinary shares of East
Capital Explorer. For more information regarding the proposals to the
Extraordinary General Meeting on 24 March 2014, see separate press release and
notice of Extraordinary General Meeting.
· East Capital Explorer will be covered by the new EU directive for alternative
investment funds (AIFMD), currently being implemented across the European Union,
aiming to strengthen the financial system and increase investor protection.
Businesses and entities covered by directive, including East Capital Explorer,
are now preparing to comply with these rules within the transition period which
ends on 22 July 2014 and the Board of East Capital Explorer has proposed the
Extraordinary General Meeting to resolve on certain amendments to the articles
of association. The changes will entail supervision and licensing requirements
as well as changes to the internal organisation and reporting to shareholders.
Management anticipates that the changes will be managed in a cost efficient
manner by utilizing the existing organisation and resources available to East
Capital, as an already supervised entity, in Sweden and in Luxembourg. For more
information regarding the proposals to the Extraordinary General Meeting on 24
March 2014, see separate press release and notice of Extraordinary General
Meeting.
· NAV per share on 31 January 2014 amounted to EUR 9.81 (EUR 9.31)[1],
corresponding to a decrease of 1.2% during the month
· Cash, cash equivalent and other short term investments on 31 January 2014
amounted to EUR 22m (EUR 17m)
· The closing price of the East Capital Explorer share as of 31 January 2014
was SEK 60.00 (corresponding to EUR 6.79)
Financial results for the fourth quarter
· Net asset value (NAV) per share on 31 December 2013 amounted to
EUR 9.89, corresponding to an increase of 9.1 % during the fourth quarter
· The Group's net result for the fourth quarter was EUR 26.3m
(EUR 0.6m), including EUR 32.9m (EUR 2.7m) changes in value of investments.
Earnings per share amounted to EUR 0.83 (EUR 0.02) for the quarter
· Cash, cash equivalents and other short term investments on 31 December
amounted to EUR 21.6m (EUR 46.5m)
· East Capital Explorer received payments of EUR 11.1m in total during the
quarter; EUR 1.2m from East Capital Power Utilities Fund,
EUR 0.8m from East Capital Bering New Europe Fund, EUR 7.4m from East Capital
Special Opportunities Fund and EUR 1.7m from East Capital Bering Ukraine Fund R
· A third tranche of dividend amounting to EUR 1.6m was received from MFG
(total dividend from MFG during 2013 amounted to
EUR 3.9m)
Financial results for the full year 2013
· Net asset value (NAV) per share increased by 8.7% in 2013 to
EUR 9.89 (EUR 9.10) at the end of December
· The net result for the Group was EUR 25.3m (EUR 14.4m) and earnings per share
amounted to EUR 0.79 (EUR 0.42)
· The closing price of the East Capital Explorer share as of 31 December 2013
was SEK 62.25 (corresponding to EUR 7.00), an increase of 27% during the year
--------------------------------------------------------------------------------
[1](1 )Comparable figures for the corresponding period 2012 are stated in
parentheses
Contact information
Catharina Hagberg, Acting CEO, +46 8 505 88 552
Lena Krauss, Head of Investor Relations & Finance, +46 8 505 885 94
Financial calendar
· Monthly net asset value report on the fifth working day after the end of each
month
· Extraordinary General Meeting 2014 on 24 March 2014
· Annual Report 2013 available in April 2014
· Annual General Meeting 2014 on 22 April 2014
· Interim Report, 1 January - 31 March 2014 on 22 May 2014
· Interim Report, 1 January - 30 June 2014 on 21 August 2014
· Interim Report, 1 January - 30 September 2014 on 7 November 2014
The information in this interim report is the information which East Capital
Explorer AB is required to disclose under Sweden's Securities Market Act. It was
released for publication at 08:00 a.m. CET on 20 February 2014.
140220 - Year-end Report 2013:
http://hugin.info/143006/R/1763345/597545.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: East Capital Explorer AB via GlobeNewswire
[HUG#1763345]
