East Capital Explorer AB - Interim Report 1 January - 31 March 2014

Events during the first quarter

In February, the value of East Capital Explorer's holding in Russian fashion retailer Melon Fashion Group (MFG) was depreciated by EUR 8.5m or 12 percent, corresponding to the decline of the rouble against the euro since December 2013, when the most recent external valuation of MFG was made. The holding is thereby valued at EUR 62.0m. The underlying growth and profitability forecasts that the valuation is based on, are however unchanged
 At the Extraordinary General Meeting on 24 March, it was decided to introduce a new class of shares, preference shares, and to authorise the Board to issue such preference shares in order to take advantage of attractive investment opportunities with strong cash flow and good growth. The EGM also decided on a number of changes required to adapt the company to EU's new regulatory framework for alternative investment fund managers (AIFMD)
 In March, East Capital Explorer received a final pay-out totaling EUR 14.0m from East Capital Special Opportunities Fund, that was liquidated in accordance with the fund's original four plus one year investment cycle. The pay-out corresponds to an annualised return on the investment of 9.4 percent
 The market sentiment towards Russia, which represents close to half of East Capital Explorer's geographic exposure, deteriorated considerably in March when Russia decided to formally annex the Crimea. The effect on East Capital Explorer's portfolio is most visible in its public fund holdings with Russian focus, most notably through East Capital Russia Domestic Growth Fund, representing 10 percent of the portfolio, which lost 29 percent in the quarter, and through the 12 percent depreciation of MFG, which represents 22 percent of the portfolio, due to the decline of the rouble (see above). The exposure towards Ukraine is insignificant with East Capital Bering Ukraine Fund R, that lost 17 percent in the quarter, having a portfolio weight of only 1 percent

            

Financial results for the first quarter

Net asset value (NAV) per share on 31 March 2014 amounted to EUR 9.17 (9.30 EUR)1. The total NAV amounted to EUR 288m (EUR 292m) corresponding to a decrease of 6.8 percent during the first quarter
 The net result for the first quarter was EUR -21.1m (EUR 6.1m), including EUR -21.0m (EUR 6.0m) changes in value of investments. Earnings per share amounted to EUR -0.67 (EUR 0.19)
 Cash, cash equivalents and other short term investments on 31 March amounted to EUR 53.8m (EUR 24.2m)

            

1 Comparable figures for the corresponding period 2013 are stated in parentheses

140522 - Q1 Report 2014


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Source: East Capital Explorer AB via Globenewswire
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