Georgia Capital PLC 1H20 Results

Georgia Capital PLC ("the Group") has published today its first half 2020 financial results. The results announcement together with the supplementary financial information and investor presentation is available on the Group’s website at https://georgiacapital.ge/ir/financial-results. An investor/analyst conference call, organised by the Group, will be held today at 15:00 UK / 16:00 CET / 10:00 U.S Eastern Time. The duration of the call will be 60 minutes and will consist of a 30-minute update and a 30-minute Q&A session. Dial-in numbers are as follows: +44 (0) 2071 928000 (international); 18669661396 (US); 08003767922 (UK) and Conference ID is 7598102.

Key points

• Rebound in revenues across all portfolio companies from April’s lows, resulting in 11% y-o-y aggregated revenue growth in June
• Portfolio company aggregated operating cash flow generation up 96.0% y-o-y to GEL 179.8 million in 1H20 and up 57.7% y-o-y in 2Q20 to GEL 87.7 million
• Aggregated cash balances of portfolio companies at GEL 282 million at 30 June 2020 (GEL 183 million at 31 December 2019)
• NAV per share up 4.9% in 2Q20, while down 32.4% in 1H20 reflecting negative impact of COVID-19 on listed asset prices and LTM multiple-based valuations of private assets
• On 16 July 2020, a share exchange offer for GHG shareholders was completed and our holding in GHG will reach 100% on 28 August 2020
• On 30 July 2020, GGU issued US$ 250 million 7.75% 5-year green notes – the landmark transaction from Georgia, demonstrating our superior access to capital even during the current challenging times
• On 19 August 2020, GHG signed a Sales and Purchase Agreement to sell a 40% equity interest in one of its lowest ROIC generating hospitals for a total cash consideration of US$ 12 million in line with its strategy to divest low-return generating assets

Management Commentary

"The strength and resilience of our defensive business portfolio has once again been confirmed by the rapid rebound of revenue streams at the end of the lockdown and thereafter. Following the completion of the Offer for GHG shareholders in 3Q20, our private portfolio has been further strengthened with addition of three strong overarching free cash flow generative businesses across Healthcare Services, Pharmacy and Distribution, and Medical Insurance. We expect to apply our private portfolio valuation methodology to each of these three businesses starting from 3Q20 results and have engaged an external worldwide recognized valuation services provider firm to perform the valuation.

Following our prudent capital allocation decisions, including the buyout of minority stake in Renewable Energy and the share exchange offer for GHG shareholders, most of our portfolio is largely concentrated in structurally important, counter-cyclical sectors: Education, Renewable Energy, Water Utility, Insurance, Healthcare Services and Pharmacy and Distribution. Looking ahead, the range of possible outcomes still remains wide, however, we believe that all of our portfolio companies other than the hospitality business, are positioned well to remain resilient. As we continue to face a challenging environment, we remain cautiously optimistic and continue to follow our cash preservation and accumulation strategy across the Group, while also exploring opportunities for attractive investments.”

This announcement contains forward-looking statements, including, but not limited to, statements concerning expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, plans or goals relating to financial position and future operations and development. Although Georgia Capital PLC believes that the expectations and opinions reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations and opinions will prove to have been correct.

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