Hello, and welcome to the Fondul Proprietatea first half 2023 results conference call. I would like to advise all participants that this call is being recorded. Thank you, and I'd now like to welcome Mr. Marius Dan to begin the conference. Marius, over to you. Thank you. Good afternoon, and welcome everyone to our conference call to discuss the first half 2023 results and the July 2023 net asset value development. Daniel Naftali, Deputy Portfolio Manager, Cătălin Cadaru, Financial Reporting Manager, and I are pleased to host today's call. The first half 2023 results report can be found on the fund's website in the financial results section. The presentation we will be discussing is available on our website at www.fondpropietatea.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. The recording will be available on the fund's website immediately after the call. That being the agenda, I would like to start off with a presentation with slide two, where we highlight the Kii facts about the fund. At the end of July, the fund's NAV was RON 12.76 billion, which is $2.85 billion, and the NAV per share was RON 2.3784, or $0.5320. On the right-hand side, you can see the evolution of the fund's adjusted share price and the discount since the fund's listing in January 2011. As of yesterday's close, the fund was trading at a discount of 18.3% for the shares and 19.6% for the GDRs. On the next slide, on slide three, we present the fund's shareholder structure as of end of July 2023, with no major changes since our last results conference call in May 2023. On slide four, we show a summary of the NAV share price and GDR performance since 2011, since the fund's listing, and the evolution of the fund's average annual discount on the Bucharest Stock Exchange, as well as on the London Stock Exchange. The net asset value total return in the first half of 2023 was a decrease of 4.5%. The total return for the local shares was a -2.3%, while the total return for the GDRs was -0.8%. For the first seven months of this year, the NAV total return was -5.7%. Total return for the local shares was down 3.7%, while the total return for the GDRs was a negative 0.8%. On the next slide, slide five, we show the contributors to the fund's performance for the second quarter. During the second quarter of 2023, the NAV per share decreased by 6.7%, mainly as a result of the fair value decrease registered for Hidroelectrica, as the valuation was updated to the IPO subscription price, which meant a decrease of RON 1.58 billion. The decrease in the fund's net asset value was also determined by the fact that the shareholders of the fund approved gross dividends in the amount of RON 269.8 million during the same period. The fund booked in the second quarter a total gross dividend receivable from portfolio companies of RON 962.5 million. As you can see, the main contributors for the second quarter were Bucharest Airports, Salrom, ENGIE, and E-Distribuție Muntenia and Constanța Port, whereas the bottom performance were Hidroelectrica, Romgaz, and Alro. Moving on to the... To slide six, we show the contributors to the fund's performance for the first half of this year. The NAV decreased by 6.2%. The main contributors in the first half were same companies, Bucharest Airports, Salrom, ENGIE, E-Distribuție Muntenia, and Constanța Port, whereas the bottom performance were Hidroelectrica and Romgaz. The fund will continue to closely monitor the evolution of the financial markets and of the specific industry the unlisted holdings operate in, and if necessary, an update of the multiples analysis will be prepared, and the valuation of the unlisted holdings will be updated, accordingly. In the next section, I would like to invite Daniel to give an update on the fund's portfolio. Thank you, Marius. On slide eight, we show the portfolio structure as of the end of July. 20.9%, in unlisted companies, 1.2% in listed equities, and 77.9% in net cash and receivables. Net cash and receivables portion as of 31st of July was $2.2 billion. On slide nine, we present the main portfolio companies as of end July 2023, representing 20.8 of the fund's NAV. On slide 10, we show the main outcome of the Hidroelectrica IPO, transaction details, Kii highlights, and the timeline. Following the IPO and the exercise of the full overallotment auction, the fund sold its entire 19.94% stake in Hidroelectrica. Backed by strong local and international long-only demand, the book was multiple times oversubscribed throughout the price range, allowing the price to price the dealers' upper half of the range at around 104 per share. As outlined on slide 11, the RON 1.3 billion IPO is the largest IPO in Romania ever, the third largest IPO in history on a CEE exchange, as well as the largest IPO in Europe year to date. On slide 12, we present the H1 2023 figures for Bucharest Airports. On the financial side, we note operating revenues increased 22% year-on-year to RON 519.5 million. Operating results increased to RON 214.479 million from RON 160 million in H1 2022. Net income was up 52% to RON 209.4 million. Also, we know that traffic increased to 6.8 million passenger in over the first six months of the year. Almost reaching in line with pre-COVID level, and also marking a 25% increase year-on-year. This this increase and the strong financial result was the Kii driver for the significant increase in profitability, which was up 52% year-on-year. On slide 13, we show H1 figures for Constanța Ports. Also on the financial side, we note 13% year-on-year increase in operating revenues, and also increase in operating profit to RON 118 million, up from RON 107 million during this year period last year. Traffic reached 14.8 million tons during the first six months of the year, a 9% year-on-year increase, driven by cereals and oils linked to Ukraine war. Overall, traffic of goods related to Ukraine increased by almost four times year-over-year to 10.2 million tons. The higher traffic was Kii contributor to increase in operating profitability. On the corporate governance front, we must know that all board members have interim mandate. Unfortunately, the selection process for full mandate has not started yet. On Salrom, on slide 14, we note the increase of 21% in operating revenues to RON 237 million. Operating profit also increased to RON 57.5 million, from RON 42 million during the similar period of the previous year. While net income increased by 51% year-on-year to RON 56.5 million. Also on Salrom, on the corporate governance front, we know that in January 2023, shareholders approved the relaunch of the selection process of the board members based on Government Ordinance 109, with the selection process being conducted now at the level of the Ministry of Energy. The process is still ongoing, so it hasn't been finalized yet, and currently, all board members are on an interim mandate. Regarding the company IPO, the fund continues to engage with the majority shareholder and the company in relation to the preparation of the of a potential IPO. In in the context of the protracted process for the appointment of a company's director under corporate governance rules apply to state-owned entities. On slide 16, we present some updates on Enel companies. As you know, the fund and the Greek company, PPC, have concluded on April 19, 2023, an agreement for the sale of all the equity stakes of the fund in E-Distribuție Muntenia and Enel Energie Muntenia, E-Distribuție Dobrogea, E-Distribuție Banat, and Enel Energie in exchange for a total consideration of RON 650 million. The completion of the sale under the SPA is subject, among others, to the closing of the transaction between Enel and PPC. The transaction is expected to close in third quarter 2023. On slide 16, we show Kii financials of the fund's largest holdings, including the 2022 figures approved by shareholders. Moving on to the corporate action section, I would like to invite Marius to comment. Thank you, Daniel. Moving to slide 18, we outlined the fund distribution since we started managing the fund. The 2023 amounts are estimations that were made based on the buybacks that we have executed so far. The tender offer, which was completed earlier in the year. The dividend distributions, which were approved by the shareholders during the April annual shareholder meeting, as well as the August ordinary shareholder meeting, and the number of paid shares, excluding treasury shares, as of 25th of August. The daily execution of the 14th buyback started on the 3rd of January and is currently ongoing at full speed. The total distributions that we have made since 2010, including those estimated numbers for 2023, have reached RON 27.4 billion, which is approximately $6.7 billion. You can see the number for 2023 includes the dividend that will be paid from the proceeds from the Hidroelectrica IPO, marking 2023 as a blockbuster year for Fondul Proprietatea in terms of distributions to the fund's shareholders. Moving to slide 19, we outline the latest updates on the ongoing buyback programs. The 14th buyback, which started on the 3rd of January, is currently ongoing. During the annual shareholder meeting held on April 21, the fund shareholders approved the cancellation of the shares, which were bought back last year, and that process is currently ongoing. On the following slide, we show them the Kii details of the tender offer that I've mentioned previously, where we bought back 225 million shares in the form of shares and GDRs at a price of RON 2.19 per share, and the equivalent of RON 109.5 for the GDRs. Moving to slide 20, 21, we include the details on the fund annual net dividend and the dividend payout ratios for the largest portfolio companies, as of the end of July, based on the numbers that have been approved by shareholders of the underlying portfolio companies. The total amount for the top holdings reached RON 93.2 million for the dividends that were declared for the financial year 2022. And then moving to the next slide, to slide 22, we show the summary of the total dividend income that was received this year from the fund's portfolio companies. And we also show a summary for the last 10 years. The total dividends, both regular and special, that have or will be received so far this year has reached RON 955.8 million. And that, of course, includes the dividends from both the annual and the special dividend from Hidroelectrica, which is no longer in the fund's portfolio. Moving to the next slide, slide 23, we show the financial calendar and the calendar of events for Fondul Proprietatea, where we hope to see as many of you both at our upcoming shareholder meeting on the 25th of September, as well as at the future conferences where we are participating. Moving to slide 24, we show the main points of the agenda of the upcoming shareholder meeting, which will take place on the 25th of September in Bucharest. The main topics are the approval of the renewal of the mandate of Franklin Templeton and sole director of Fondul Proprietatea for a duration of four years, starting with the 1st of April 2024, until 31st of March 2028. The approval of the appointment of a sole director, of a new sole director, that will act as alternative investment fund manager. The appointment for a period of three years of two members in the board of nominees of Fondul Proprietatea, following the expiration of the mandate of Mr. Ciprian Lăduncă and Ms. Ilinca von Derenthall. On the EGM agenda, the main topic is the approval of an amendment to the Constitutive Act, which is related to the mandate of the alternative investment fund manager from two to four years. The fund's financial results for the period are presented on slides 26 and 27, and I would like to invite Cătălin Cadaru, Head of Financial Reporting, to comment. Thank you. Thank you, Marius. On slide 26, we see the statement of financial position, and the most important point to note is the decrease in the equity investment portfolio of approximately RON 11.5 billion, which was triggered by the reclassification of Hidroelectrica and Enel Holdings as non-current assets held for sale, as at 30 June, as well as the fair value decrease of Hidroelectrica. As at 30 June, the holding in Hidroelectrica was valued at the expected IPO proceeds before being reclassified as non-current assets held for sale. Moving on to slide 27. The fund ended the six-month period with an unaudited loss of RON 680 million, where the net unrealized loss from equity investments is the main driver. Again, the main contributor here is Hidroelectrica, approximately RON 1.9 billion, which was partially offset by increases in other portfolio holdings, such as, Bucharest Airports of RON 150 million, ENGIE Romania, 49 million, Constanța Port, RON 30 million, and Salrom, RON 23 million. The gross dividend income, discussed earlier, was mainly generated by Hidroelectrica, Salrom and, Bucharest Airports. Thank you, Cătălin. At this point, we would like to open it up for your questions. Like to ask any questions, please press star and number one on your telephone keypad. We have our first question from Deepinder Bhatia, from Bayard Asset. Your line is now open. Great. Thank you very much. I hope you can hear me clearly. Just a couple of questions on the portfolio companies, if I may. I want to start with Salrom, which has seen some exceptional results in the last 12 and now even the current year, 18 months. Can you please identify the reasons for this exceptional growth and profitability for what should be a fairly stable, steady growing salt manufacturer? What are we missing here? What is driving these results, and how sustainable are they? I have a few more questions after that. Thank you. Hi, thank you for the question. So, well, Salrom is a beneficiary in a way, from war in Ukraine, so they, they, they are gaining new clients, especially on the export side, because some of their competitor in Ukraine cannot deliver. So of course, this is a situation, this is an opportunity from their point of view. ... And this is also has enabled them to increase production and to gain additional revenues. If this is sustainable, I think it also depends to a certain extent on them. You have the clients, but then they have to put the efforts that on the longer term, they are able to keep this client. So fundamentally, we do hope and we encourage them to increase profitability and increase, you know, market share in the addressable market actually to be durable. So yeah, I think I hope this answers your question. Yes, it does. Thank you very much. Just moving to Bucharest Airport and the issues surrounding it, which have been telegraphed by management from time to time. Can you please give us any update as to the continuing litigation on this asset and where you think, how you think it's evolving? Deepinder, I would like to invite our Head of Legal, Radu Ropotă, to give an update on this. You are referring to the ongoing litigation surrounding the share capital increase. Radu? Yeah. Thank you very much, sir. Correct. Yes, that's what I'm referring, the capital increase. Yes, exactly. As per the half year report, the decision that was issued in this file, which was unfavorable to Fondul Proprietatea, was challenged by Fondul. We filed an appeal to the decision, and we are now expecting to go through the motions to have the appeal ruled upon by the court. And obviously, we will update investors on the outcome of that. We remain positive that our arguments are valid with respect to the challenge that we've made initially to this share capital increase. Can you give some more color as to why you believe that your arguments are, in your view, likely to prevail? Can you give us a little bit more depth on this call, please? Deepinder- I probe a little bit more here, given that it's going to be nearly 30% of the remaining NAV post the Fondul dividend, so we may need to dig a little bit more deeper into it, if you don't mind, to the extent that you're able to comfortably talk about what you consider to be your legal standard. Yes. As previously reported in our regular reports, the main argument there is the flawed valuation of the land that forms the basis of the share capital increase in kind. Where we've also managed to obtain a suspension of the valuator from the various institutions where they were a party. So basically, this is the main argument that we have, that the valuation was made on the wrong basis, and it should be reviewed, and therefore, another share capital increase decision should be made in the future based on a new valuation. So by when would we know for sure... Well, not for sure, but what, what is the timeline around the judicial process, and what would be the timeline around the NAV adjustment, if there were to be one, for our NAV statement, for Fondul's NAV statement for Bucharest? So what do you expect to be the judicial timeline, and where along the process do you expect that you will have an opportunity to make an adjustment to your carrying valuation, if need be? I will take things in reverse order. The valuation will be able to be updated when we have a final decision on this point. With respect to the timing, I'm not sure how familiar people on the call are with the Romanian judicial system. It's pretty unpredictable. And just to give you some flavor, until tomorrow, there has been public courts holiday. There are also some protests by magistrates, which obviously affected the timing of various proceedings. But what we can expect in terms of appeal sometime next year, I expect that this to be finalized, subject to court's workloads and other unforeseeable issues. Yeah. By next year, you said 2024? Sometime by the end of next year. Thank you very much. I have more questions. I'll come back into queue. Thank you very much. Thank you as well. Thank you, Deepinder. We have our next question from Iuliana Ciopraga from Wood & Company. Your line is now open. I have a number of questions, actually. So first, how much cash will there be left in the portfolio after the payout of the dividend from the proceeds of Hidroelectrica, from the sale of Hidroelectrica, if we include also the distribution and any other fees? If you can clarify that. And I'll just ask all the questions, and you can take them. What will be the strategy with the cash to be received from Enel, from the sale of the stakes in Enel companies? And third, what's the strategy going forward for the fund? You were talking before about the changing strategy, a sort of fee structure. Is that still valid? When would we know more details about this? And also just a clarification about the results. What are the 288 other financial assets and the 236 financial liabilities that amortized cost, what we see in the August NAV? And following what Deepinder asked, what happens if the result of the appeal is not favorable? Is there still a risk that they can go ahead with the share capital increase? That's all. Thank you. Thanks for the question, Iuliana. I will comment on the strategy, and then I will invite Cătălin to discuss, to address your questions on the financials, and I'll go on the last question regarding the litigation. First, the strategy with the cash from Enel. We expect, as we mentioned, we expect this transaction to close in the third quarter, and we would be looking to use those proceeds to execute the discount control mechanism that we currently have in place. With regards to the future strategy of the fund, right now, we have asked for an approval of the extension of our mandate to manage Fondul for about four years, and this is an approval in principle. We are in a process of consultation with the fund shareholders regarding, you know, how we view the future of the fund and becoming an investor in Romanian unlisted companies. We expect to be in a position to call a shareholder meeting to approve the investment management agreement in the next few months. The updated strategy will be reflected in the investment policy statement as well as in the investment management agreement that would be put forward for shareholder approval. I will now turn to Cătălin to address your other question. Yeah. On the, on the question on the 288, this, represent, various government bonds. That fund, the fund invested the cash, from the Hidroelectrica proceeds on a short term for cash management purposes. And on the other liability side, the biggest amount there represents the liabilities, to shareholders, which are the distributions which are currently being, on payment, by Fondul Proprietatea. Current year and prior distributions, which have not been collected by shareholders at the date of the report. Thank you. With respect to your point regarding the Bucharest Airport litigation, if the appeal is unsuccessful, and if the decision is not revoked another way or suspended another way, then unless we contribute cash, Fondul will be just diluted following this share capital increase. Regarding the cash that would be left in the portfolio after the distribution of the dividends? So you can The one second, yeah. The NAV of the August NAV, which will come out shortly, will accurately reflect the available cash. This is not yet available, you can see it in the latest NAV from July. However, that does not fully capture all the costs of the IP, of the Hidroelectrica IPO. Some of those costs were paid during August, so you will see a more accurate reflection of the cash remaining when we publish the August NAV. Thank you. If you'd like to ask any questions, please press star number one on your telephone keypad. We have another question from Deepinder Bhatia from Bayard Asset. Your line is now open. I have two questions. The first is just a follow-up to Iuliana, which is, she referred to the cash from the Enel sale as being an item, which I think, if I heard correctly, would be used in the standard form as we have previously for discount reduction, which discount management, which is tender offers, share buybacks, dividend payouts, and so on. What about the remaining dividends that you have collected along the way this year, which have also contributed to cash? And, Cătălin, I understand that that number has to be calculated, and we'll see it in the August report when it's out. But whatever that number is, it is a substantial number, to do with dividends from Bucharest Airports, Salrom, the special dividend from Hidroelectrica, the Hidroelectrica dividend itself, are all substantial numbers. Should we understand, from the comment made, a moment ago that that cash, similar to the NL cash, would be used in the discount mechanism? That's my first question. Thank you. Thank you, Deepinder. Well, the use of proceeds, of course, has been very much towards dividend payments... and share buybacks, tender offers, where we have the cash available. As mentioned earlier, we expect to use the proceeds from the Enel sale in that direction as well. We will be in a position to see what additional cash we have available. Of course, we have our internal calculations as to what we need to retain in order to execute the daily buybacks for the remainder of the year. Because we do want to continue being in the market, acquiring up to 25% of the average daily trading volume in line with the regulations. We will be in a position to present more details to shareholders in the next weeks. Thank you very much. That's a good start. As to my second question, just slightly technical here: Are you able to consolidate your shares so as to be able to improve the price per unit, so that the active share buybacks have an impact in value that is similar or maybe even better than it is currently? Just given that post-ex-dividend date, the share - the theoretical share price adjustment will be of such high magnitude, that while you may be purchasing a similar number of shares, the value of those purchases is gonna be substantially lower. And therefore, the share buyback correspondingly, of course, your market capitalization is gonna be lower, too. But it would be... The time available to utilize the cash on a much smaller value base will take much longer, unless there is some mechanism by which you can consolidate shares and improve the price per unit. Is there any possibility of you being able to successfully do that, so as to make the tender offer or share buyback more impactful as we go along? That's it for me. Thank you. Deepinder, this is something that we are taking under consideration at this point. Of course, we have to put it in balance with our short-term strategy in order to distribute the cash from Enel. But, you know, one thing we can assure you of, we've always acted in the best interest of the fund's shareholders, and we'll continue to do so, and we're looking at all available avenues to do that. Thanks, Marius and team. Good luck for the rest of the year. Thank you. We have our next question from Iuliana Ciopraga for Wood & Company. Your line is now open. Hi, just a final question. But regarding the changing strategy and what you mentioned before regarding investing in listed Romanian companies, what cash would you be using for that? I think that's actually the question here. So if you intend to distribute most of the cash from NL and the existing cash, what cash would be left, basically? Iuliana, we'll be in a position to disclose more details when we have the shareholder meeting to discuss... to approve the investment management agreement, the changes to the IPS. So everything should be reflected at that point. But so first, you will first have the GMS to renew the mandate, and then we have the mandate, right? I mean, how would that work, or the timeline be? Or is that already- On the 20- -when the On the 25th of September, we have similar to what we've done in the past, extensions of our mandate as managers of Fondul. We have the approval in principle to continue with Franklin Templeton as the manager. And then, as a second stage, the investment management agreement gets approved. So we are taking a similar approach this time around. The one change is, of course, that the extension of the mandate will be for four years, from April 20, 2024 until end of March 2028. But the details of the investment management agreement would be approved in a subsequent shareholder meeting to take place in the coming months. It has to take place before the existing mandate expires. Thank you. Thanks a lot. Seems like we don't have any questions coming in from the audience. I'd now like to hand back over to Marius, for the closing remarks. We also have a couple of questions on the webcast. I'll start with the second one. The next IPO in line would probably be Salrom. This is from Florin, Florin Mocioi i at IPP PEMA]. To answer your question, Florin, yes, the regards regarding Salrom, we already have a process in place. The pace of this process is not, you know, as fast as we would like. There have been changes in the government. There is a new minister of economy who is in charge of Salrom. And we are engaging with the new minister and his team in order to continue the IPO process of Salrom. When there will be updates, we will make them public for all shareholders. The second question is from Tarang at City of London: Could you break down the RON 243 million IPO cost for Hidroelectrica? I will invite Cătălin to comment. So as I said, during August, we still, we wrapped up this process of gathering all the costs. At this point, we can only say that the most significant amount from the RON 243 represent the syndicate bank fees, followed by lawyers, equity advisor, and of course, all other consultants in the project. What we will do in the next period, once this is finalized, we will assess, together with the auditors and the contractual provisions, the level of disclosures which are appropriate and which can be provided in the next reports that we publish for Q3 and the other report. Unless there are any further questions, we would like to thank everyone for your time today, my colleagues for participating on the call and addressing your questions. If you have any other questions you would like to discuss, please do not hesitate to reach out to us. Thank you very much. Thank you, everyone, for attending today's session. We hope you found it useful. Have a wonderful day and stay safe. You may now all disconnect.