Good day, welcome to the Fondul 2022 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 on the webcast, please enter your question in the question box. If you wish to ask a question on the phone, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question on the phone, please press star one again. For operator assistance on the phone throughout the call, please press star zero. Finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Marius Dan, Deputy CEO, Corporate Strategy, to begin the conference. Marius, over to you. Good afternoon, and welcome everyone to our conference call to discuss the 2022 annual results of Fondul Proprietatea, as well as the January 2023 NAV developments. Johan Meyer, CEO of Franklin Templeton Bucharest Branch, as fund manager of Fondul Proprietatea, Catalin Cadaru, Financial Reporting Manager, and I are pleased to host today's call. The 2022 annual results report can be found on the fund website in the financial results section, and the presentation that we will be discussing is also available on our website at www.fondulproprietatea.ro in the Investor Relations Call section. After the presentation, we will have a 30-minute Q&A session. As a reminder, the conference call is being recorded, and the recording will be made available on the fund's website after the call. That being the agenda, I turn to Johan to start off with the presentation. Thank you, Marius. I'd like to start with slide two of the presentation, where we show the highlights of the fund. At the end of January, the fund's NAV was 14.6 billion RON or $3.2 billion, and the NAV per share was 2.57 RON or 56 US cents. On the right-hand side, you can also see the evolution of the fund's adjusted share price and discount or premium since the fund's listing in January 2011. As of yesterday's close, the fund was trading at a 18% discount for the shares and 20.1% for the GDRs. Moving on to slide 3, we show the fund's shareholder structure as at the end of January 2023, which reflects no material changes since the last conference call in November 2022. Cancellations of shares bought back during 2022 is submitted for the shareholders approval during the 2023 annual shareholder meeting. Moving on to slide 4, we show a summary of the net asset value, 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 LSE. The NAV total return in 2022 was 19.1%. The total return for the local shares was 12.2%, while the total return for the GDRs was 3.9%. For the first month of 2023, the NAV total return was 0.1%, the total return for local shares was -0.5%, while the total return for the GDRs was 2.8%. On slides five and six, we show the contributors to the fund's NAV performance for the fourth quarter and for the whole of last year. During the fourth quarter of 2022, on slide 5, the NAV per share decreased by 4.6%, mainly as a result of valuation update of the portfolio companies. For the 3rd November 2022 NAV, starting from the methodology used in the last valuation report, that was prepared with the assistance of KPMG Advisory for Hidroelectrica, the main inputs were updated. Market multiples, EBITDA, and net cash position based on the company's financial information. Also, the inputs to the valuation included an adjustment to reflect the impact resulting from the latest changes in the energy market legislation. For the 31 December 2022 net asset value, the valuation updates were made in accordance with the International Valuation Standards and were prepared for 19 unlisted holdings with the assistance of KPMG and Darian DRS, which represents 100% of the unlisted portfolio. Valuation date was 31 October, the reports are based on the financial data of the companies as of 30 September. While the valuations also considered subsequent developments until 31 December, such as changes in legislation. As you can see, following these valuation report updates, the main contributors in the fourth quarter of last year were the power and gas utility companies, in other words, the Enel distribution companies and ENGIE Romania, followed by Salrom, the salt mining company. The bottom performance for the quarter were the power producer Hidroelectrica and the two Enel supply companies, followed by Port of Constanța and Canale Navigabile, a smaller holding in the fund's portfolio. Now, moving on to slide 6, we present the top and bottom performers for the entire last year. Even if at the beginning of 2022, the risks associated with the COVID pandemic decreased, the Russian invasion of Ukraine brought new turmoil on global and regional markets. Of course, we continue to closely monitor the evolution of the financial markets and the of the specific industry the unlisted holdings operate in for each NAV reporting date and whenever necessary, updates on the valuation of the unlisted holdings were prepared again, in accordance with the International Valuation Standards with the assistance of the advisory companies. As a result, for the year of 2022, the top performers were Hidroelectrica, Salrom, Bucharest Airports, Borsec Roman, and Zirom, two of the smaller companies in the fund's portfolio, while the bottom performers were the power and gas utility companies, ENGIE and Enel, predominantly supply companies and the distribution company, Banat. The overall performance for NAV in 2022 was positive 13.6%. As always, the funds will continue to monitor the evolution of financial performance and the industries and update the multiples if necessary, and perform an update valuation on the unlisted holdings if necessary. In the next section, we'll give an update on the funds portfolio. Moving on to slide, we show the portfolio structure as of the end of January, which shows 92.8% in unlisted companies, 5.9% in listed equities, and 1.3% in net cash and receivables. The net cash and receivable position as of 31 January was $190 million. On slide nine, we present the main portfolio companies as of 31 January 2023, representing 92.2% of the fund's NAV, with Hidroelectrica representing 76.5% of the fund's net asset value. Moving on to the next slides 10 and 11, we present some updates on the largest holding of the fund, Hidroelectrica. Firstly, slide 10, we show the preliminary financial and operational figures for 2022. According to management, on a standalone basis, the company registered compared to 2021 operating revenues of RON 9.1 billion, an increase of 40%, and operating result of RON 4.7 billion, an increase of 37%. EBITDA was RON 5.8 billion, an increase of 25%. Net profit of RON 4 billion, an increase of 33%. Total electricity sold was 14.3 terawatt-hours, a decrease of 16%, while electricity sold out of own production was down 20% to 13.3 terawatt-hours. The average realized electricity price sold was RON 560 per megawatt-hour, an increase of 65% compared to 2021. According to management, again, on standalone basis, the company registered in 2022 total costs, with the main components being the windfall tax of RON 557 million, compared to RON 113 million in 2021, and water tax, derived from the volume of water used in the generation of electricity of RON 451 million, a decrease of 16.5% year-on-year as a result of the lower electricity production volume. At the end of December 2022, the cash and equivalents stood at RON 14.1 billion, and the total interest-bearing debt amounted to RON 498 million compared to RON 579 million at the end of December 2021. Over the period, the operating cash flow amounted to RON 4.5 billion, versus RON 3.9 billion, during 2021. CapEx carried out by the company in 2022 amounted to RON 194 million, compared to RON 829 million in 2021. Of course, out of which RON 635 million was related to the acquisition of the Crucea Wind Park. On the corporate governance front, now moving on to slide 11, please note that in October 2022, shareholders approved the initiation of the selection process for the supervisory board in accordance with the provisions of Emergency Ordinance 109 of 2011, with the selection process being conducted by the Ministry of Energy, with the assistance of an independent HR recruitment specialist, and this is currently ongoing. The deadline for submission of applications was 20 February, 2023. The four-year mandate of all seven members of the supervisory board appointed in 2019 expired on 5th of February, 2023. Accordingly, a new supervisory board with the same composition was appointed for an interim mandate of four months or until the finalization of selection process mentioned above, in case it occurs before the expiration of the four-month mandate period. On 7 December, 2022, a Mr. Andrei-Tinu Cireș was appointed as an interim member of the directorate for a period of four months, replacing Mr. Radu Cop. Following a court case initiated in 2020 by an employee of the company, the Bucharest Court annulled in April 22 the recruitment procedure and the selection process that was performed by the company during April to June 2019 for the selection of five members of the directorate. According to the decision, the company is obliged to issue a new decision for a new recruitment process. Hidroelectrica has, of course, appealed the court decision and a ruling on the matter is expected shortly. Regarding the company's IPO, we, Hidroelectrica, and the consortium of investment banks are conducting intensive work to complete the IPO process in 2023. The remaining state, the company's majority shareholder, committed in the Recovery and Resilience program to the listing of Hidroelectrica by the end of the first half of 2023. moving on to slide 12, we present the main details on the OMV Petrom accelerated book build executed in December 2022, following which the fund exited entirely, its holding in the company. Moving on to slide 13, we present the 2022 preliminary figures for Bucharest Airports. On the financial side, operating revenues was 73% higher compared to 2021, reaching almost RON 1 billion, and the operating result reached RON 280 million, compared to RON 40.8 million the previous year. Net income was RON 215 million, a six-fold increase compared to the previous year. In the fourth quarter of 2022, traffic was down by 8% compared to the last quarter of 2019, which was at a historical peak and just before the start of the COVID pandemic. Overall traffic in 2022 reached 12.6 million passengers, just 14 below, 14% below pre-pandemic levels. Moving on to slide 14, we show the preliminary figures for Port of Constanța. On the financial side, operating revenues was 18% higher year-on-year, at RON 493 million. Operating profit was RON 129 million, a decrease from RON 141 million in 2021. Net income was RON 117 million, a 10% decrease compared to the previous year. Traffic volumes in 2022 reached an all-time high of 75.6 million tons, including one-off traffic triggered by the war in Ukraine of approximately 11.8 million tons. The management estimates that while revenues also increased by 24%, profitability slightly deteriorated to RON 117 million, as previously mentioned. Regarding Salrom's 2022 preliminary results, moving on to slide 15. The operating revenues increased by 39% to 521 million RON, and the operating profit was RON 145 million from RON 70 million in 2021. Net income was RON 142 million, an 135% increase compared to the previous year. Also, here on the corporate governance front, last month, the company shareholders approved the restart of the selection process for board members based on Ordinance 109 of 2011, with the selection procedure being conducted at the level of the Ministry of Economy. Regarding the company's IPO, the fund and selling shareholder, and Salrom continues to prepare for an IPO during 2023. For the corporate action section, I'd like to invite Marius to comment. Marius, over to you. Thank you, Johan. Moving to slide 17, we outlined the fund distribution since we started managing the fund. 2023 amounts are estimates we've made based on the buybacks, the daily buybacks executed so far, the ongoing tender offer, as well as the dividend distribution proposed for shareholders approval during the April annual shareholder meeting and the number of paid shares excluding the treasury shares as of 31st of January, 2023. Please note that currently, the execution of the daily buybacks in the 12-14 buyback program started on 3rd of January, is currently suspended due to the ongoing tender offer process. The amount for 2023 is expected to continue to increase as the fund will see cash inflows, which will be subsequently distributed to the fund's shareholders. Overall, the distributions that we have made since 2010 when we started managing the fund, including the current estimates for 2023, have reached RON 18 billion, approximately $4.6 billion. Moving forward to slide 18, we outlined the latest updates on the fund's buyback programs. The 14th buyback program started on 3rd ofJanuary, 2023, and the cancellation of the shares bought back last year is now on the agenda of the annual shareholder meeting that will take place in April. On slide 19, we show the main details of the ongoing tender offer that I've mentioned earlier. The size of the offer is for 225 million shares in the form of both shares and GDRs. The purchase price is RON 2.19 per share and the equivalent of RON 109.5 per GDR. As a reminder, 1 GDR equals to 50 shares. The subscription period started on 10th February and will end shortly on 13th of March. Allocation method is pro rata, as you have been used to this. The consortium handling the offer is composed of Swiss Capital as intermediary, Swiss Capital and Orba Creighton as deal managers, and The Bank of New York Mellon as the GDR tender agent. Moving to slide 20, we present the cash distribution recommendation that has been submitted for shareholders to approve for the 2022 financial year. Considering the provisions of the annual cash distribution policy for the fund, as well as the available cash balance and the ongoing discount control mechanism measures, including the current tender offer, the fund manager has proposed to shareholders for their approval a cash distribution of RON 0.05 per share. ager, intend to use any additional cash inflows which are related to portfolio events that will take place during 2023 to further implement the discount control mechanism techniques which are set out in the fund's investment policy statement, such as funding the buyback program as approved by the fund's shareholders or by proposing to shareholders the payment of additional potential dividend or dividends, and this will be subject to market conditions as well as any restrictions under the Romanian legal or tax regulations, and to any required shareholders approval. The above mentioned discount control mechanism techniques will be completely separate from any distributions resulting from the ongoing listing project and especially the IPO of Hidroelectrica Moving to slide 21, we present the main points on the agenda of the annual shareholder meeting that is scheduled to take place on the 21st of April. On the agenda of the extraordinary meeting, the main approvals that are requested are several amendments to the Constitutive Act of Fondul Proprietatea, the decrease of the subscribed share capital of the fund, following the cancellation of the treasury shares which were acquired by the fund throughout 2022, as well as the approval of the decrease of the legal reserve. Moving to the agenda of the OGM, the ordinary meeting, we have the presentation by the fund manager of the 2022 performance report, as well as the Board of Nominees of its annual report for last financial year, including its review report in relation to the fund's performance report. We have the approval of the annual activity report of the sole director for 2022, including the IFRS and the auditor report. The approval to cover from other reserves, the negative reserves arising out of the cancellation of the treasury shares acquired in 2022. The approval to allocate to other reserves, from the 2022 net audited accounting profit, an amount of over 908.8 million RON to be used to cover the negative reserves estimated to arise from the cancellation of the treasury shares. Finally, the approval of the gross annual dividend of RON 0.05 per share. On slide 22, we include the calendar, the financial calendar for Fondul Proprietatea for 2023. We really look forward to seeing many of you during our future road shows and conferences. The fund financial results for the period are included on slides 24 and 25, and I would like to invite Cătălin Cadaru, Head of Financial Reporting to comment. Cătălin. Thank you, Marius. On slide 24, we can see the statement of financial position. The increase in the liquid assets of approximately RON 500 million at the end of 2022 was driven mainly by two important events. The disposal of the OMV Petrom shares and the net dividends collected. These were partially affected by the dividends paid to shareholders and the amounts paid during the buyback program. The net increase in the equity investment of more than RON 1 billion was mainly driven by the increase of the fair value of Hidroelectrica of approximately RON 2 billion, that was partially affected by the full disposal in OMV Petrom shares and the decrease in the fair value of several other holdings in the fund portfolio, mainly Enel and NG. On the other liabilities caption, the decrease, compared to 31st of December 2021, is mainly due to the dividend distribution that started on 18th of February. Moving on to slide 25. On the statement of comprehensive income, the fund registered an positive profit of just about RON 2.8 billion for the financial year ended 31st December 2022. The operating income of the fund is influenced by the performance of the portfolio companies and their decisions on dividend distributions by the changes in the share price of listed portfolio companies, as well as by money market performance. The net unrealized gains from equity investment at fair value through profit and loss of approximately RON 2 billion was again generated mainly by the increasing fair value of Hidroelectrica. The gross dividend income for 2022 mainly includes the amount approved by Hidroelectrica, RON 764 million, and OMV Petrom RON 133 million. The net gain on other financial instruments at fair value to profit and loss booked during 2022 mainly includes the realized gains from the collection on the unpaid share from the Romanian state in February 2022, and from the OMV Petrom preferential rights that were exercised by the fund as part of the share capital increase in the company. Both realized losses captions relate to the fully formal of OMV Petrom shares during 2022, either through daily transactions or through accelerated bookbuilding. Thank you, Marius. Thank you very much, Catalin. At this point, we would like to open it up for your questions. If you wish to ask a question on the phone, please press star followed by one on your telephone and wait for your name to be announced. That is star one if you wish to ask a question on the phone. Currently, there are no further questions, no questions on the phone at this time. I'm back to Marius. Thank you. It looks like we have a question on the webcast from Caius Rîpanu from BCR. Could you please elaborate on the potential listing of Salrom and the potential development of the issue of dilution in Bucharest Airport? Okay. Marius, I'll take Salrom, and I'll give you back the airport, if you don't mind. Salrom, as we stated in the remarks, we continue to prepare for an IPO during 2023. However, any successful transaction will depend on the conclusion of selection of the board and the management to have a proper governance structure in place. Also, what we would like to see is the appointment of a Big Four auditor in order to ensure appropriate reliance on the financial support purposes of investors. These are two quite significant outstanding processes. We are early in the year, and we hope to make significant progress on this, considering that the selection process for the board of the company has already been reinitiated. Unfortunately, further than that, I don't have any particular updates. Thank you. On the issue of the Bucharest Airport, the good news is that share capital increase at the valuation, at the inflated valuation, which we have legally contested, was not completed due to the litigation that we initiated. There is a 12-month window during which the shareholder decision has to be registered, which is not the case here, so that decision is no longer valid. At the same time, there is an ongoing litigation related to this. However, this will still be an issue that needs to be resolved with the majority shareholder of the company, the Ministry of Transportation. We are actively working on that. When we have a more substantial update, we will inform our shareholders. The next question, comes from, Byron Mildenhall, from Allan Gray. What are the key hurdles remaining for the Hydro IPO? Does a permanent board have to be, appointed? Byron, thanks for the question. I think we, considering where we are in the process, I think it's very difficult to go into detailed comments related to where we are. I want to refer you to the previous remarks during the call that the process is live and ongoing at the moment, and that the Romanian government is majority shareholder committed to an IPO in the first half of the year in the Recovery and Resilience program. With regards to the question of a permanent board, that is a live process at the moment as well. For obvious reasons, I would say it would be desirable to have a permanent board and management team in place in order to give potential investors clarity on who will be responsible for the governance structures of the company going forward. Of course, we will be providing updates in due course as the selection process progresses. We don't have any further questions on the webcast, so just wanted to double-check if there are any questions on the phone. Your first question from the lines comes from Andrea Orizio from Alpha Bank. Your line is open. Hi. Thank you for the presentation. I do have a couple of questions. First, regarding the Enel subsidiaries. Can you give us any updates regarding a potential sale? Are you engaged in such a process? Well, we read the same reports as you do, in the media. You know, it is incumbent on us to look at any potential transactions should it come across our table. Unfortunately, there is not much more that we can say at this point. If we do have anything relevant, we will update all shareholders. Okay. Thank you. I do have a question regarding the potential distribution of cash proceeds from a Hidroelectrica sale. Can you please detail what are the restrictions here? Well, we have the approval of shareholders from November 2022, which approved the point introduced by the Ministry of Finance, which requires us to distribute the proceeds from the Hidroelectrica IPO within three months. Once the IPO will be completed, our goal, our objective is to call a shareholder meeting and put on the agenda the approval of the distribution of these proceeds. We will have to seek, once the IPO takes place, exactly what amount can be distributed and within the boundaries of the Romanian regulations. Our intention remains to fully distribute the proceeds from the Hydro IPO. Okay. Thank you. Basically you're telling me that all proceeds should be distributed less the expenses side, right? Yes. That's our intention. Okay. Okay. My last set of questions is regarding Hidroelectrica, and I was wondering if you could give us more details regarding its activity and maybe the impact of current regulation. Here, my main interest is regarding the power acquisition mechanism. Can you share with us what is Hidroelectrica's quota on this segment? Maybe something about the ongoing investments for Hidro. Unfortunately, at the moment, we given that we are in the IPO process, we are quite restricted in terms of the details that we can share. Yeah. Certainly related to the investment program. I think all of this will be. All of this information will be included in the prospectus that will be that will be published. I unfortunately can't go into any details on that. Could you just repeat the first part of your question? Think you had a bit of an echo there. Yes. Yes. I was wondering if you can share something about this power acquisition mechanism. What is the quota? What is the amount of power that Hidroelectrica should be selling on this segment, regulated segment at around 450 RON per megawatt? Just give us a moment to see if we can disclose this information. Just checking. Yeah. Thank you. Because the company hasn't disclosed this information at this point, we're unable to comment on that. Okay. Thank you. That's all from my side. Thank you. There are no further questions on the phone at this time. We have one additional question on the webcast from Gaius again. Are you involved with any offers for utilities holdings? Refer to the response to the previous question related to Enel. It looks like we do not have any further questions. We would like to thank again everyone for your time today. As always, for any additional questions, please do not hesitate to reach out to us. Johan? Thank you, Marius. I would just also like to extend a sincere note of thanks to the team at Franklin Templeton for producing these results and preparing the annual report under what has been a very volatile and rapidly changing environment. Thank you very much to the team for delivering, again, a good set of results. Here's looking forward to what is going to be a defining year in the history of Fondul. The Romanian capital market for that matter. Bye everyone. That does conclude our conference for today. Thank you for participating. You may now all disconnect.