My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fondul Proprietatea's first quarter 2024 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad, and if you would like to withdraw that question again, press star one. We will also be taking web questions. If you would like to ask a web question, please submit your questions in the question box on the right-hand corner of your screen. Thank you. It is now my pleasure to turn the conference over to Marius Dan, Chief Executive Officer and Corporate Secretary. You may begin.
Good afternoon, and welcome everyone to our conference call to discuss the first half 2024 results and the July 2024 net asset value developments of Fondul Proprietatea. Johan Meyer, CEO Romania for Franklin Templeton, Portfolio Manager, Cătălin Cadaru, Financial Reporting Manager, and I are pleased to host today's call. The first half 2024 results report can be found on the fund website in the financial results section, and the presentation we will be discussing is available on our website at www.fondulproprietatea.ro in the investor relations call section. After the presentation, we will have a thirty-minute Q&A session. The call is being recorded, and the recording will be available on the fund's website after the call. That being the agenda, I would like to turn to Johan to give an update on the fund's key facts and portfolio. Johan?
Thank you, Marius. Appreciate it, and welcome to everyone joining us on the call today. Moving directly into it, on slide two of the presentation, we show the key facts about the fund. At the end of July, the fund's NAV was 2.3 billion RON or $0.5 billion, and the NAV per share was 0.666 RON, or the equivalent, $0.1451. On the right-hand side, you see the evolution of the fund's adjusted share price from discount to premium since the fund's listing in January 2011. Yesterday's close, the fund was trading at a discount of 40.3% for the shares and 33% for the GDRs.
Moving on to slide three, we show the fund's shareholder structure as at the end of July 2024, so compared to the previous conference call that we had in May, the Romanian institutional shareholders have reduced their holdings in the fund, whereas Romanian private individuals have been net buyers of fund shares. Now, moving on to slide four, we show a summary of the NAV, the share price, and the GDR performance since 2011, and the evolution of the fund's average annual discount on the Bucharest Stock Exchange and the London Stock Exchange. The NAV total return in the first half for 2024 was 10.3%, while the total return for local shares was -14.9%, while the total return for the GDRs was -11.6%.
For the first seven months of 2024, the NAV total return was 11%, total return for local shares negative 9.5%, and the total return for the GDRs was -7.6%. Moving on to the next section on slide 6, we show the portfolio structure at the end of July, which shows 74.6% in unlisted companies, 5.5% in listed equity, and just shy of 20% in net cash and receivables. The net cash and receivable position being $100 million as of the end of July. On slide 7, we present the main portfolio companies as at the end of July, as mentioned, representing 76.2% of the fund's NAV. On slide 8, we present the first half figures for Bucharest Airports.
And there on the financial side, operating revenues increased 18% compared to the first half of 2023 to RON 613 million, and the operating result reached RON 302.5 million, an increase over the 248 million achieved in the first half of 2023. This was driven by continued traffic growth in the first half of the year, which reached 7.4 million passengers, which is an increase of 9% compared to the first half of 2023. The higher passenger traffic, coupled with a more beneficial contract for commercial spaces at the airport, were the main positive drivers for the 22% increase in operational profitability, as mentioned, which reached RON 302.5 million.
Regarding the litigation, on the seventh of March 2024, the Bucharest Court of Appeal ruled in favor of the fund to annul the shareholder resolution related to the share capital increase related to certain land plots, and it's worth mentioning there that the Bucharest Court of Appeal decision is final. On the corporate governance front, in July 2024, the board of directors was appointed for a four-year mandate. However, Fondul Proprietatea challenged the legality of these appointments in court due to irregularities in the selection process and the outcome thereof, which in our view go against the provisions of OUG 109 of 2011, which is the corporate governance law. On slide 9, we show the first half figure for Constanta Port.
On the financial side, operating revenues decreased by 3% year-on-year to 268 million RON. Operating profit was 227.5 million RON, which is an increase over the 117.7% achieved in the first half of last year. Net income was at 231.6 million RON, an increase of 112% year on year. Traffic declined marginally in the first half compared to the first half of 2023 to 40.5 million tons, due to a significant drop in volumes linked to Ukraine, which almost halved to approximately 6.5 million tons.
However, the operating profitability almost doubled, reaching 227.5 million RON in the first half, primarily due to a reversal of a legal provision of 112.9 million RON. On the corporate governance front, all board members there continue to have interim mandates, and the selection process for full mandates has not yet started. Moving on to Salrom on slide 10. Operating revenues increased by 2% year-on-year to 241.7 million RON. Operating profit was 66 million RON, an increase of or increased from 37.5 million RON in the first half of 2023. The net income was 61.4 million RON, an increase of 9% compared to the previous year.
On the corporate governance front, in February 2024, the board of directors was appointed for a four-year mandate, of which Fondul Proprietatea appointed two out of five members. Also, the selection procedure based on the Law 109 of 2011 was completed, and the board appointed the general manager for a period of four years, starting with July 2024. We continue to believe that Salrom is a good candidate for a potential IPO, and we'll continue to collaborate with the company and the majority shareholder to pursue this option. On slide 11, we show key financials for the fund's largest holdings, including the 2023 figures as approved by shareholders.
Now, moving on to the corporate action section, I would like to invite Marius to comment. Thank you.
Thank you, Johan. On slide 13, we outlined the fund distribution since we started managing the fund. The 2024 amounts are estimations we've made based on the buybacks that we've executed so far in the market. The dividend distribution, which was approved by the fund shareholders during the April annual shareholder meeting, and the number of paid shares, excluding the treasury shares as of the twelfth of July. Please note that the daily execution of the fifteenth buyback program started on the eighth of April and is currently suspended due to the ongoing tender offer process. The 2024 numbers do not include the amount to be paid in the tender offer because we are waiting ASF approval.
After the approval, we will be able to announce the price at which we will be buying back the shares in the current tender offer. So far, the distributions that we have made since 2010, including the amounts for 2024, have exceeded 28.7 billion RON, or $7 billion. Moving on to slide 14, a brief update on the fund buyback program. The shares we purchased in the fourteenth buyback program, 2.11 billion shares. We are awaiting the decision to cancel the shares, and we expect that to be imminent. On the fifteenth buyback program, we have approval from shareholders to repurchase 1 billion shares, which is approximately 17 point...
That's 17.6% of the fund's outstanding shares. We are working with Auerbach Grayson and Swiss Capital on the current buyback program. On slide 15, we include the details on the fund's annual net dividends and dividend payout ratios for the largest portfolio companies as of the end of July. Based on the figures approved by shareholders, the total amount for top holdings is approximately 144 million RON for the dividends approved in 2024 from the 2023 profit. Moving on to slide 16, we show a brief summary of the total dividend income received from the portfolio companies in the last 10 years.
So far, total dividends approved, both regular and special, that have been or are expected to be received this year is 145.8 million RON. On slide seventeen, we show the 2024 financial calendar. We will be participating at the WOOD Romania conference next week, which is taking place in Bucharest, and we have the shareholder meeting planned for 27th of September. On the following slide, we show the main points of the 27th September shareholder meeting agenda. As you can see on slide eighteen, the main topics of the EGM are the approval of some amendments of the constitutive act of the fund.
On slides 19 and 20, we have the approval of the 2024 budget of Fondul Proprietatea, the appointment for a period of three years for two board members. You can follow the list of candidates who have applied for the current board election process on the fund's website. The deadline to submit nominations is expiring today at 5:00 P.M. Moving on the agenda, we have the reappointment of Ernst & Young as the financial auditor of Fondul Proprietatea. We have...
the approval of the selection criteria, which has been prepared and proposed by the Board of Nominees on the basis of advice received from Numis Securities, which is a member of Deutsche Bank Group, and based on which the Board of Nominees will be selecting the alternative investment, the fund manager of Fondul Proprietatea. We have also the appointment following a selection process done by the Board of Nominees of Numis Securities, member of Deutsche Bank Group, as selection advisor assisting the fund through the BoN members of the Board of Nominees in relation to the selection of a potential alternative investment fund manager. We have the approval of the advisory budget for the selection process in the amount of RON 3.8 million.
and also the approval of either the extension of the mandate of Franklin Templeton Investment Services as the sole director and alternative investment fund manager of Fondul Proprietatea for one year, starting with 1 April 2025 until end of March 2026. And the corresponding extension of the terms of the management agreement executed between the fund and FTIS, 29 March 2024 until the 31st of March 2026, including or the approval of the appointment of a new sole director of Fondul Proprietatea will act as an alternative investment fund manager for a mandate of two years, starting with the first of April 2025 until end of March 2027.
Furthermore, as you may have seen, last evening, we did receive a request to supplement the convening notice of the 27 September 2024 shareholder meeting agenda. And the Ministry of Finance requested some key points. One, the suspension of the current buyback program after the shareholder meeting resolution is published in the Official Gazette, of course, if this will be approved by the fund shareholders, and an interdiction to perform any other buybacks until 31 March 2025.
The second point was related to the preservation of the current portfolio of the fund and interdiction to perform any buyback programs and the retention or use of cash held by the fund exclusively for the management of the current portfolio and, or for investment, if shareholders approve to extend Franklin Templeton International Services mandate from first of April 2025 until end of March 2026. We will be, of course, as always, issuing a voting recommendation, and we encourage as many shareholders to participate and vote in the upcoming shareholder meeting. The fund financial results for the period are presented on the next slide, and I would like to invite Cătălin Cadaru, Head of Financial Reporting, to comment.
Thank you, Marius. On slide 22, you can see the balance of the fund and the most important cash inflows during the period related to the disposal of Engie, while the most important outflows relate to the net dividends paid during the period for all the ongoing distributions. The dividend receivable shown on the balance sheet mainly includes amounts from Bucharest Airports and Salrom, and as of today, all amounts have been collected. Moving on to slide 23, on the profit and loss, the fund is in a net profit position of RON 212 million. The main factor behind that being the dividend income mentioned earlier, while the gains on equity instruments profit and loss relate to the update of the valuation for the most significant unlisted holding that form part of the half-year report.
Thank you, Cătălin. At this point, we would like to open it up for any questions on the phone.
Thank you. And as a reminder, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. And if you'd like to withdraw that question, again, press star one. And as a reminder, if you would like to ask a web question, you can text your question in the question box in the right-hand corner of your screen. Your first question on the phone comes from Cristiano Petri from NN Pensions. Please go ahead.
Hello. Can you hear me?
Yeah, I hear you, Cristi. Go ahead.
Sorry. Hello, can you hear me?
Yes, please go ahead.
Yeah. Just a question regarding the additional item on the extraordinary meeting from the state. If the prospectus is not approved by the FSA until the moment of the GSM and this passes through, this means that the repurchase program will not take place? Thank you.
Correct. So if this point is approved at the shareholder meeting, following the publication of the decision in the Gazette, the buyback program would effectively be stopped.
Okay, thank you.
And if you'd like to ask a question, please press star one. We have no questions on the phone at this time.
Okay, we have some questions that were submitted in the chat box from Andrei Blondo at the DOT. First question is to provide more details around the current situation of Salrom, and steps that we've taken in recent years for listing on the Bucharest Stock Exchange, and importantly, the challenges that we've encountered. So a quick recap here. The listing approval in principle was in July 2021, and in July 2022, the government approved a memorandum supporting listing of Salrom through a public offering of the shares held by the fund.
But the challenges and the obstacles that we've had to deal with in the meantime, as in any listing process, well, particularly related to Salrom corporate governance, in that the board of directors and management were in interim roles for a long period of time, and there was some changes in the composition. So obviously, that's very difficult to make or to support any progress in the listing initiative. And then, the second obstacle that we tried to address was the appointment of a big four auditor. There were two tender processes run at the end of last year, with the incumbent auditor being reappointed.
So yeah, progress there is very slow. But as I mentioned in my earlier remarks, we continue to believe that this is a viable candidate for a listing, and we will continue the conversation with the company and the majority shareholder on next steps in order to make progress here. The second, and I guess a related question due to this in some way, according to the PNRR, the listing of three state-owned companies is planned by 2026, one of which is in the transportation sector, and in our opinion, what are the chances that this company will be Bucharest Airports, and can we provide some comments on the topic?
From my point of view, I think there's no clarity in terms of communication on which company this should be. Again, similar to the comments on Salrom, we believe that Bucharest Airports would very much benefit from a listing on the Bucharest Stock Exchange, as a mechanism to raise capital at the company, in order to fund or partially fund an expansion of the activities at the airport. I'm sure anybody that's traveled through there in the last couple of years would've noticed that it is quite congested. If we're thinking longer term, clearly a decision here is needed sooner rather than later.
So, if the government, the Ministry of Transport is serious about this, they have a very willing partner in us to collaborate on finding a way forward, for a listing of Bucharest Airports. And third question, can we inform you which sole directors have been proposed so far? So, no, other than Franklin Templeton, no sole directors have been proposed to date. With the selection process for a fund manager being in the hands of the Board of Nominees of the fund.
On the agenda, specifically, is the approval of the selection criteria for a fund manager, as well as the approval of the advisor that will support the board in the selection process, but other than Franklin Templeton for an extension for twelve months while this process is ongoing, no other mandate or no other candidates have been proposed thus far. There's another question: What impact do we anticipate the proposed buyback ban will have on the NAV objective of the fund? On NAV as such, no impact, because that is related to the value of the underlying holdings.
I think where there is potentially a greater concern is that the buyback program is a key part of the discount control mechanism, as stated in the fund's documents, the investment management agreement, and the investment policy statement. So that is one of the key mechanisms that we as the sole director can utilize to manage the discount of the fund. So from our point of view, limiting a buyback or banning a buyback would be potentially detrimental to shareholders.
There's one more question on the phone. Please go ahead.
As a reminder, if you'd like to ask a question, please press star one. We have no phone questions at this time.
Okay, in this case, we would like to thank everyone for your participation on the call today. And for any additional questions, please feel free to reach out to us, anytime, and we hope to see you at some of the upcoming events, including the shareholder meeting, in the coming weeks.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.