Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to Fondul Proprietatea 2024 Preliminary Annual 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 questions over the web. If you would like to ask a question, please, please type your question on the bottom right-hand corner of your screen. Thank you. And it is now my pleasure to turn the conference over to Marius. Marius, the floor is yours.
Thank you. Good afternoon and welcome, everyone, to our conference call to discuss the 2024 Preliminary Annual results and the December 2024 NAV developments. Johan Meyer, CEO of Romania and portfolio manager, Catalin Cadaru , Financial Reporting Manager, and I are pleased to host today's call. The 2024 Preliminary Annual Results report can be found on the fund's website in the financial results section, and the presentation that we will be discussing shortly is available on our website at www.fondulproprietatea.ro in the Investor Relations section. You should also have received it by email. After the presentation, we will have a 30-minute Q&A session. As a reminder, the call is being recorded. The recording will be available on the fund's website after the call. That being the agenda, I'd like to start with slide two of the presentation where we highlight the key facts about the fund.
At the end of December, the fund's NAV was RON 2.25 billion , or around $470 million. The NAV per share reached RON 0.7029 per share, or $0.1472 per share. On the right-hand side, you can see the evolution of the fund's adjusted share price and the discount and premium since the fund's listing in January 2011. As of yesterday's close, the fund was trading at a discount of 51% for the shares and 54% for the GDRs. If we take into account the newly released December NAV, that discount is even higher than that. On slide three, we present the fund's shareholder structure as at the end of December 2024 compared to the information that we presented during the previous conference call.
In August, the cancellation of shares bought back in 2023 was finalized, which resulted in a decrease in the treasury shares' ownership, while the Romanian private individuals continued to increase their stake into the fund. As of the end of December, the Romanian individuals held above 50% of the outstanding shares. Moving on to the next slide, we show a summary of the NAV, share price, and GDR performance since 2011, as well as the evolution of the fund's average annual discount on the Bucharest Stock Exchange as well as on the London Stock Exchange. The total return for the net asset value in 2024 was 17%, whereas the total return for the local shares, unfortunately, was a - 32.1%. The total return for the GDRs was - 36.7%. In the next section, I would like to turn to Johan to give an update on the fund's portfolio.
Thank you, Marius, and appreciate everybody taking the time to join the call today. Moving on to slide six, we show the portfolio structure as at the end of December 2024: 82.6% in unlisted companies, 5.5% in listed equities, and 11.9% in net cash and receivables, representing $56.2 million. Moving on to slide seven, we show the main portfolio companies as at the end of December 2024, which represents 83.8% of the fund's NAV. Moving on to slide eight, we present the nine-month 2024 figures for Bucharest Airports. There, on the financial side, the operating revenues increased by 20% compared to the first nine months of 2023 to RON 1.1 billion , and the operating profit reached RON 524 million from RON 420 million in the comparable period.
Traffic, pleasingly, has recovered to pre-COVID levels in 2023 and continued to rise by 10% year-on-year, reaching 12.2 million passengers in the first nine months of the year. This trend, coupled with a more beneficial contract for commercial spaces, was the main positive drivers for the improved operational profitability, which was up 24.7% to the previously mentioned figure of RON 524 million . Regarding the litigation, on 7th March 2024, the Bucharest Court of Appeal ruled in favor of the fund to annul the shareholders' resolution related to the share capital increase related to the inclusion of land plots in the share capital of the company, and the Bucharest Court of Appeal's decision is final. Moving on to the corporate governance front, in July 2024, the board of directors was appointed for a four-year mandate.
Fondul Proprietatea, however, challenged the legality of these appointments in court, which decided in January 2025 to suspend the appointments until a final court decision on the issue. However, the suspension decision was appealed by the company. Now, moving on to slide nine, we show the nine-month 2024 figures for Constanța Ports. On the financial side, operating revenues decreased by 5% year-on-year to RON 401 million. The operating profit was RON 264 million, up from RON 180 million in the first nine months of 2023. And net income was RON 269 million, an increase of 50% compared to the previous year. Traffic was 60.1 million tons in the first nine months, which was 9.5% lower year-on-year in the context of a significant drop of volumes that are linked to Ukraine, which decreased by more than half to approximately 8.6 million tons.
The operating profitability was up by close to 47%, reaching RON 264 million in the first nine months, which was boosted by a reversal of a legal provision of just shy of RON 113 million . On the corporate governance front, all board members have interim mandates, and the selection process for full mandates has not yet started. Now, moving on to slide 10 to discuss Salrom's first half 2024 results. The operating revenues increased by 2% year-on-year to RON 242 million . Operating profit was RON 66 million , an increase from RON 57 million in the previous year, and net income was RON 61.4 million , an increase of 9% on the previous year. On the corporate governance front, in February 2024, the board of directors was appointed for a four-year mandate, with Fondul Proprietatea appointing two out of those five board members.
Also, the selection procedure was completed, and the board appointed the general manager for a period of four years, starting with July 2024. Regarding the company's IPO, the fund continues to engage with the majority shareholder and the company in relation to preparations for a potential IPO. On slide 11, we show key financials for the fund's largest holdings, including the 2023 figures as approved by the shareholders. Moving on to the corporate action section, I would like to return the floor to Marius.
Thank you, Johan. On slide 13, we outlined the fund's distribution since we started managing the fund. The 2024 amounts are based on the buybacks we executed, the tender offer, which we completed, and the dividend distribution, which was approved by the shareholders during the April annual shareholder meeting, as well as the number of paid shares, excluding treasury shares, as of 8th of October, the last trading date for the 2024 buyback program. This brings the total distributions, which we've made since 2010, including the amounts for 2024, to RON 28.9 billion , or approximately $7 billion. On slide 14, we outlined the latest updates on the fund's buyback programs. The 15th buyback was completed, as mentioned earlier, in October 2024. During the 2nd of December shareholder meeting, the fund's shareholders approved the cancellation of the shares, which were bought back last year, and the process is now ongoing.
The 16th buyback program was approved by shareholders during the same shareholder meeting, and we have the ability to repurchase 320 million shares during the current buyback program. In terms of the brokers, we will continue working with Auerbach Grayson, as well as Swiss Capital to execute the current buyback program. Moving to the next 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 last year, based on the figures which were approved by shareholders. The total amount for the top holdings is approximately RON 144 million , and this comes from the 2023 profit of the underlying portfolio companies. On the following slide, we show a summary of the total dividend income received from the portfolio companies for the last 10 years, including the special dividends as well.
On slide 17, just an update on the financial calendar for Fondul Proprietatea. Now, turning to the fund's financial results, which are presented on the next slides, I would like to invite Catalin Cadaru , Head of Financial Reporting, to comment.
Thank you, Marius. On slide 19, we see the preliminary statement of financial position, where the equity investment portfolio increased by approximately RON 197 million as a result of the annual valuation update process. The main drivers were the Bucharest Airports by RON 156 million, Constanța Port by RON 43 million, partially netted off by the decrease in Oltenia valuation by RON 22 million. The updated valuation reports were prepared with the assistance of KPMG and Darian DRS. They generally have a valuation date of 31st of October and are using financial information from the companies as of 30 of September 2024.
At the date of this preliminary report was published, financial audit procedures are ongoing, and this includes also subsequent events analysis for the period between the valuation date of 31st of October and 31st of December, such as market data movement, regulatory changes, or corporate actions, or any other events that may significantly impact the valuations. Any such changes in the valuations will be included in the annual financial audited financial statements of the fund and in subsequent NAV reports. The equity elements of the fund at the end of last year include an amount of RON 774 million, which corresponds to the loss booked upon the cancellation of the treasury shares that were acquired during 2023. This was completed during August 2024.
If we move to the next slide, we can see that Fondul registered a preliminary unaudited profit of RON 339 million, mainly driven by the change in fair value of the portfolio companies mentioned previously. As mentioned before, the audit procedures are still ongoing, and any difference in the valuation will be reflected in the financial statements. The gross dividend income booked by the fund was mainly generated by Bucharest Airports, RON 80 million, and Salrom, RON 63 million. The last point I wanted to make relates to the changes in the fiscal code that were enacted at the end of 2023. After these changes, Fondul is no longer able to fully utilize the fiscal loss to offset the results. Therefore, it started to pay income tax during 2024.
The total income tax paid or payable by Fondul during 2024 amounts to RON 30 million and includes amounts both reflected in profit and loss or directly in equity as per the accounting regulations.
Thank you, Catalin. At this point, we would like to open it up for any questions.
Thank you. 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. If you would like to ask a question over the web, please type your question in the question box on the bottom corner of your screen. And we'll pause for a moment to compile those rosters. Your first question over the phone comes from Caius Rapanu from BCR. Please go ahead.
Hi, guys. Thank you for the presentation. My question is regarding the process of choosing the next manager. Do you guys know what is the timeline with that?
Okay. So unfortunately, we cannot comment on that. So Franklin Templeton, as the manager, is not responsible for the process of selecting or conducting the selection process for a manager for a new mandate. So that is fully in the hands of the board of nominees, and any updates on the process will be communicated by the board of nominees of the fund.
Right. Thanks. And I had another question regarding Constanța Ports. If we take that one off thing out of there, we see that the decline in operating income is more or less in line with the decline in revenues. How do you see things going on this year after that major decline in Ukrainian grain? Did you see, I mean, in the last quarter, and what are your expectations for this year in terms of volume?
It's a bit of a guess at this point, but obviously, the Ukraine-linked volumes depend to a large extent on developments in the war in the country and the infrastructure there. So I still believe that some of the traffic probably will be of a more permanent nature, and some will be more transient. I think we've seen a lot of that reverting back to Ukrainian facilities already. So just thinking about that, probably, I think we could expect something similar, if not better, than this year. But of course, it's January, so it's very early in the year to be making such statements.
Great. Thanks a lot, and I really hope to hear you again.
Okay. Thank you so much.
We have no further questions over the phone at this time. Would you have any web questions?
I think we've covered the question that has been also asked on the web, and this is in relation to the selection process. And since we are not involved, we cannot really comment on this.
Yeah. Just one point that I'd like to add there. So shareholders have already approved a one-year mandate to commence on the 1st of April 2025, subject to a new fund manager not being appointed prior to that date. So there is already visibility provisionally up until the end of March 2026. And in that case, Franklin continues until such time that a new fund manager, if the case, is appointed and approved by shareholders.
It looks like we don't have any further questions, in which case we would like to thank you for your time today. For any additional questions, please feel free to reach out to us. Actually, we have a question that came up. What's the EV/EBITDA multiple on the airport in our NAV, and how does it compare with the recent airport transactions? Six, the current run rate on the dividend per share.
Let's start with the dividend question, and then we'll come back to the EV/EBITDA multiple.
So this $0.06 is the one for last year, right?
It's the one for last year, yeah.
Yeah, so the annual cash distribution policy was updated, so the previous $0.05 per share was removed, the minimum. We will be able to make more comments about any dividends for 2024 once the final audit is done, and then we will know the final profits of Fondul and what a potential dividend per share looks like, and depending on the final decision made, that would be part of the documentation for summoning the annual GSM, and our expectation is that that documentation is published around the end of February.
Yeah, so the cash distribution plan, as Catalin was saying, for the year is still being developed depending on what the audited profitability will be, and based on that figure, I think we have, well, we obviously have a couple of figures at our, a couple of mechanisms at our disposal.
One option would be to start making use of the daily buybacks again. And the shares available under that program, as Marius mentioned earlier, is 320 million shares for the year. But obviously, all of this needs to be considered in the overall context. But ideally, we would like to be in a position where we can declare a dividend for the year.
Sticking to this, we have another question. Is the policy still to pay out about 90% or more?
For portfolio companies, that is?
The question from the room here is, is this related to the portfolio companies or to Fondul? Because Fondul specifically has a cash distribution policy, so it's not a targeted payout ratio.
So on the portfolio companies, it varies depending on the shareholder approvals obtained during the year. So for the main asset, Bucharest Airports, the legislated minimum is 50%. And that's true for all companies except for the ports.
Thank you, Johan. Coming back to the question about the EV/EBITDA multiple on the airport from Anton, so based on the latest valuation, we have a multiple of 7.2, which is based on the after the discounts for lack of control, lack of marketability. And this is based on the trailing 12 months EBITDA. This is, of course, a lot lower than the transactions that we're seeing in the market. And as you've seen, private transactions tend to happen around and above 20 times EV/EBITDA.
We'll give another minute in case there are any follow-up questions, but do let us know. It looks like we don't have any follow-up questions, so we would like to thank you again for your participation on today's call. And if you have any further questions, if you need further information, to reach out to us. Have a good afternoon.
Ladies and gentlemen, this does conclude today's conference call. Thank you for your participation, and you may now disconnect.