Not that attractive post Hidroelectrica

Fondul released its Q3 results.

 Summary: Fondul reported its Q3 figures, but most importantly the fund’s NAV for October which arrived at 0.6457 RON/share (flat mom) implying a 16% P/NAVPS discount which is relatively low compared to the historical avg. of 26%. This relatively low discount is attributable to the upcoming tender offer where Fondul is expected to buy back ca 30% of the outstanding shares at a price of 0.6319 RON/share. Cash jumped to 35% from 16.6% in September because of the incoming cash from the divestment of ENEL assets.

 This was the first time that FP publish report without Hidroelectrica and after the fund divested its crown jewel, we are less enthusiastic about FP at current share price. One of the reasons is the relatively low level of dividend generation capacity of the remaining companies in the portfolio (0.027 RON / share) which may justify higher than avg. P/NAVPS discount to create attractive dividend yield after the tender offer (please see our chart below). Also please note that the share of cash in our TP represents relatively high level (53%).