SIFs log growth, regardless of actual profits

The profits of some of the financial investment companies (SIF) underwent significant changes last month, going either up or down, compared to November. On the other hand, the SIF shares on the Stock Exchange have been following only one trend in the last few weeks and are therefore on the rise. Four of the five SIFs have already released preliminary 2003 financials.

The most spectacular change in financial situation was witnessed by SIF Moldova that made 109bn ROL ($3.3 million) profit in December alone. The profit growth was not due to transactions but to accounting operations related to the provisions for the amounts the company is disputing with Bankcoop’s liquidator.

“The profit growth is due to redoing the financial statements for 2002 under the IAS,” said Alexandru Matei, the chairman of the financial investment company. He added the possible payments to the Banking Assets Resolution Authority (AVAB) or Bankcoop on loans granted by FPP (Private Ownership Fund) Moldova would no longer have any bearing on the profit as of this year. SIF Moldova, which most of the brokers in mid last year feared would not make profit in 2003 because of its debts to AVAB and Bankcoop, concluded the year with the highest earnings per share of the five SIFs, 709 ROL. He says the dividends disbursed this year will comply with the provisions in the budget. The shareholders approved a 490 ROL dividend last year.

SIF Transilvania last month logged a 28bn ROL loss. The main reason for this was again, as manager Florian Firu says, the redoing of the financial statements for 2002. “The Board of Directors has not made any decision on the profit to be disbursed to shareholders,” he added. The earnings per share amount to nearly 650 ROL, 13% of the latest quote on the Stock Exchange.

SIF Transilvania and SIF Moldova outstripped the 2003 budget projections by more than 25%, while Banat-Crisana and Oltenia announced profits close to the level in the budget. SIF Banat-Crisana announced 318bn ROL profit, 3% lower than anticipated in the budget, while SIF Oltenia exceeded the profit scheduled for last year by 1%, gaining 288bn ROL.

The only SIF not to have released last year’s financials is Muntenia, which was logging 337bn ROL profit (418 ROL/share) 11 months through last year.

SIF shares have gained nearly 15% on the average since the beginning of the year, in addition to the growth in the last week of trading in 2003.