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EEII AG reports on the annual results 2019
In line with most financial markets, EEII looks back to a very positive reporting year, having generated a net profit of CHF 2’763’927
(2018: loss CHF 593’829). The principal driver for this significantly better result was the equity position held in the oil-and gas behemoth Gazprom, with an absolute performance of 86% for the year. In contrast to Gazprom, all Ukrainian investments held by EEII stagnated yet again, despite an improved political environment. However, the local currency, Hryvna, lent some support to the Ukrainian assets. The net asset value (NAV) as of December 31, 2019, improved to CHF 4.96 per share versus CHF 3.15 at year end 2018. Total expenses 2019 were CHF 423’000 vs. 2018: CHF 387’500. Dividend income for 2019 increased 13% to CHF 312’000.-.
Led by the US equity market (S&P 500 + 30%), most stock-exchanges improved distinctively around the globe. The expectations for a further economic recovery impacted commodity prices as well i.e. the cost per barrel crude oil moved from USD 54 to USD 65. Taking advantage of such a fruitful environment, Gazprom unexpectedly announced a dividend increase, leading to a revaluation of its stock price. Prices in the shares of our two other key holdings, Ukrnafta and KAZ Minerals, did not alter.
With regards to currencies the increase in the Ukrainian Hryvna (+15 % vs. CHF) added a supportive element to the performance of our Ukrainian investments. The USD and GBP held their ground during 2019, whereas the British Pound was able to recover from its lows, following initial Brexit worries in the mid-year.
The election of the new Ukrainian president Wolodymir Zelensky, a former comedian, came like an unexpected earthquake. The newly appointed president started with incredible verve and surprised with an ambitious programs of reforms. Subsequently, culminating in obtaining the suspended IMF stimulus package in the amount of USD 5,5 Bio. This new optimism in a country burdened by never ending crises, was cause for a better performing local currency, improved growth outlooks and last but not least, a capital market bond new issue of Eur 1,25 Bio in January 2020. This positive sentiment was, however, not reflected in the performance of Ukraine’s stock market which closed lower at year-end than at the beginning of the year.
Despite all these positive signs in Ukraine, EEII’s key market, a sustainable and prosperous performance of its shares in particular in the energy sector did not occur and seems difficult to conceive going forward.
The full annual report for 2019 as well as more detailed information are available for download under www.eeii.ch; a printed copy can be sent to the shareholders upon demand.
EEII AG’s Annual General Meeting will take place June 23, 2020, at 11.00h at the City Garden Hotel in Zug. For comprehensive information about the AGM, please refer to: www.eeii.ch
For further information, please contact:
Marcus H. Bühler, CEO (Tel: +41-44-552 43 43).
EEII is quoted on the Swiss Exchange (SIX) (Bloomberg: EEII SW Equity)