MCI Capital ASI – (Last valuation: 33.1 PLN/share as of 02.05.2022)
2Q22 results – upward revaluation of eSky helped reduce Q1 loss
In 2Q2022, the company generated investment earnings of PLN 78.1 million, EBIT of +69.4 million and net income of PLN 80.3 million. Book value per share at the end of 2Q22 was PLN 34.4 compared to PLN 33.6 at the end of 1Q22, down 0.7% y/y and up 2.6% q/q. NAV/share was down about 2% from the end of 2021, mainly due to the dividend declared. On a fullyear basis, investment losses narrowed to PLN -13.5 million, EBIT declined to PLN -20.8 million, and net income was PLN 1.1 million. Net debt, according to our estimates, at the end of 2Q22 was around PLN 162 million (PLN 218 million after adjusting for the dividend liability and MCI.TV's yield guarantee liability), compared to PLN 196 million at the end of 1Q22, thanks in part to a decline in receivables. We view the results as neutral.
- P&L
- In 2Q22, investment gains amounted to PLN 78.1 million, EBIT PLN +69.4 million, net income PLN +80.3 million. The result for H1 consisted of MCI.EuroVentures FIZ positive contribution (PLN +131.2 million), including an upward revaluation of the investment in eSky (PLN +163 million), and a negative contribution from MCI. TechVentures FIZ (PLN -128.5 million), including devaluation of Morele Group (MCI share approx. -47m), Gett (MCI share approx. -34m), Answear (MCI share approx. -24m) and Travelata (MCI share approx. -21m). Revenues from management fee in 2Q22 amounted to PLN 3.3 million (vs. PLN 3.5 million in 1Q22).
- The results of the funds
MCI Capital ASI's earnings presentation shows that the net assets of MCI.EuroVentures FIZ at the end of 2Q22 increased by 7.9% y/y. The decrease in IAI's valuation by PLN 22 million was offset by increases in Hobby Hall Group (+PLN 16 million) and eSky (+PLN 163 million). In contrast, MCI.TechVentures FIZ's net assets at the end of 2Q22 fell 40.4% YTD. The unrealized loss on the valuation of investments in this Subfund in H1, amounting to PLN 281.7 million, includes the revaluation of Morele Group (PLN - 108.6 million), Gett (PLN -79.5 million), Answear (PLN -55.4 million) and Travelata (PLN -48.7 million).
- Good liquidity position
In our opinion, the company's liquidity situation is improving. This is supported by, for example, the full repayment of promissory notes to investment funds, the successful completion of the second tranche of the public bond issue for PLN 81 million, and the acquisition of a credit line at ING Bank for PLN 173 million, which can be used if investment opportunities arise. According to our estimates, net debt at the end of 2Q22 was around PLN 162 million, compared to PLN 196 million at the end of 1Q22. It is worth noting, however, that the decrease is temporary, as on the liabilities side the company shows a dividend liability (PLN 36.7 million) and a liability for the rate of return guarantee in MCI.TV (PLN 19 million). Adjusted for these two liabilities, net debt is about 218 million zlotys. The company said in the presentation that it has about PLN 777 million secured for potential investments. In September, additional cash is expected to come in from another redemption of investment certificates in MCI.TV FIZ, of which MCI will receive about PLN 12 million.
- Exits and new investments
During the earnings conference call, the management indicated that valuations of companies are currently very attractive, and that the company will focus on investments in the coming quarters and years. At the same time, exits from Focus and Hojo will be made in 2022 in connection with the liquidation of the MCI.IV FIZ fund. Exits from investments in MCI.TechVentures (Gett, answear.com, Travelata) are planned for 2023 and 2024 in connection with the start of the liquidation period of this subfund, scheduled for the second half of 2024.
Last valuation: 33.1 PLN/share as of 02.05.2022. Price on the day of issue 19 PLN.
Krzysztof Radojewski Deputy Head of Research and Advisory Department krzysztof.radojewski@noblesecurities.pl
