Pomegranate Investment Releases Financial Report for the period of 12 months ended April 30, 2019
Highlight of the reporting period
The net asset value of the Company was EUR 108.8 mln on April 30, 2019 corresponding to EUR 20.1 per share, compared with NAV per share of EUR 18.9 as per January 31, 2019.
Pomegranate continues to first establish IRR (Iranian Rial) based valuations for all the portfolio companies, regardless of past EUR denominated transactions, and then to use data from the new foreign exchange trading platform known as “NIMA” for translations from IRR into EUR valuations.
As per April 30, 2019 the mid NIMA spot rate had decreased by 14.3% compared with January 31, 2019 and consequently there is a -14.3% FX effect on all portfolio company valuations.
The IRR based NAV of Sarava, our largest holding, following its annual NAV review increased more than the negative FX effect, resulting in a positive adjustment of the Sarava EUR value compared with previous quarter.
Mainly driven by DK and substantially by CB and Alibaba Travel, key beneficiaries of (foreign) competition vacuum. The FX effect in the model valuations of Sheypoor – our second largest portfolio is partly offset by continued growth since the previous quarter.
The underlying IRR valuation of Sheypoor increased by 7% in the quarter while Navaar was largely unchanged and the resulting EUR valuations decreased by 10% and 14% respectively due to the weakening of Rial in the quarter.
The EUR valuation of Sarava increased by 14% in the quarter. Due to continued rally of the Tehran stock market the GIF fund EUR NAV increased by 15% in the quarter.
The Board together with the management team has decided that in order to further reduce costs, as well as account for a somewhat smaller team, Pomegranate plans to change its quarterly reporting to bi-annual reporting starting from the financial year May 1, 2019 – April 30, 2020.
At the same time, the return to quarterly reports for a later listing once the environment improves will be unproblematic and swift.
Cash and cash equivalents amounted to EUR 16.8 million as per April 30, 2019 (April 30, 2018: 23.4).
Additionally, the Company had liquid investments with Griffon Capital at a value of ca EUR 2.8 million as per April 30, 2019, which means a total sum of cash and liquid investments of EUR 19.6 million.
The number of outstanding shares at the end of the period was 5,404,601. Following expiration of 85,000 warrants on December 31, 2018, the number of outstanding warrants amounts to 107,500 as per April 30, 2019.
Florian Hellmich, CEO of Pomegranate Investment AB (publ), commented:
More than ever it is a story of stark contrast between the macro and micro environments in and around Iran.
Currently nothing suggests the former is about to change for the better, it remains a fact that our portfolio companies continue to perform strongly.
For the first time we have now incorporated two independent external valuations – one international and one domestic – in the valuation procedure for Digikala and Alibaba Travel (part of Tousha Group).
The bottom line is our NAV has increased by 6.4% over the quarter, from EUR 18.90 to EUR 20.10 per share mainly driven by the annual revaluation of Digikala, Café Bazar and Tousha Group.
Whilst it can feel somewhat counterintuitive with a quarterly increase in the NAV given the current news flow around Iran, the numbers reflect that the vast majority of our portfolio companies are rapidly growing, consolidating their market shares with some of them emerging as national household names.
Pomegranate Investment AB (publ) is based in Sweden and was founded in 2014 by a pioneering team with a long and successful track record of investing in high growth companies in emerging markets, particularly in the technology sector.
Pomegranate is an investment company that has a strong position primarily in Iran’s consumer technology sector, which, with the easing of international sanctions, represents an extraordinary growth opportunity for European investors.
We are entrepreneurs, we have invested in entrepreneurs and a significant proportion of our investors are entrepreneurs themselves.
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