Pomegranate InvestmentAB (publ) releases Financial Report for the period of 9 months ended January 31, 2019 and third quarter ended January 31, 2019
NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO ANY U.S. PERSON
Highlight of the reporting period
- The net asset value of the Company was EUR 102.2 mln on January 31, 2019 corresponding to EUR 18.9 per share, compared with NAV per share of EUR 19.0 as per October 31, 2018.
- Pomegranate continues to first establish IRR (Iranian Rial) based valuations for all the portfolio companies, regardless of past EUR denominated transactions, and then to use data from the new foreign exchange trading platform locally known as “NIMA” for translations from IRR into EUR valuations. As per January 31, 2019 the mid NIMA spot rate had decreased by 4% compared with October 31, 2018 and consequently there is a -4% FX effect on all portfolio company valuations. The FX effect in the model valuations of Sheypoor - our second largest portfolio company and our fast growing spoken word company – Navaar, are offset by continued strong growth since the previous quarter.
- The underlying IRR valuations of Sheypoor and Navaar increased by 11% and 9% respectively. The EUR valuation of Pomegranate’s investment in Sarava decreased by 3% in the quarter. Furthermore, GIF fund has resumed its NAV reporting in the quarter due to increased transparency on FX regime, and as per January 31, 2019 there is a significant positive adjustment of 63% when last month’s stock market rally has been fed into the updated fund NAV value.
- All documents related to the exercise of the first tranche of Sheypoor stock options held by Pomegranate were finalized with an updated investment agreement for a total consideration of EUR 550 thousand in exchange for 3.03% in the company.
- Cost reduction measures have started to take effect and adjusted for non-cash LTIP 2018 related costs, operating expenses were 32% lower in the reporting period November 1, 2018– January 31, 2019 compared with the same period last year.
- The Board together with the management team has decided that in order to further reduce costs, as well as account for a somewhat smaller team, Pomegranate plans to change its quarterly reporting to bi-annual reporting starting from the next financial year May 1, 2019 – April 30, 2020. At the same time, the return to quarterly reports for a later listing once the environment improves will be unproblematic and swift.
- Cash and cash equivalents amounted to EUR 17.3 million as per January 31, 2019 (April 30, 2018: 23.4). Additionally, the Company had short term investments with Griffon Capital at a value of ca EUR 2.6 million as per January 31, 2019, which means a total sum of cash and short term investments of EUR 19.9 million.
- The number of outstanding shares at the end of the period was 5,404,601. Following expiration of 85,000 warrants on December 31, 2018, the number of outstanding warrants amounts to 107,500 as per January 31, 2019.
Florian Hellmich, CEO of Pomegranate Investment AB (publ), commented:
Our investment universe remains a tale of two stories: on one hand a macro environment with severe headwinds, on the other, a digital economy where our portfolio companies continue to grow between 50-130% in local currency terms, offsetting the weaker exchange rate over the past quarter. Let’s see what the new year brings. Happy Norouz!
For additional information, please visit the Company’s website at www.pomegranateinvestment.comor contact:
Investor Relations contact:
Gustav Wetterling, CFO
Tel: +46 8 545 015 50
Pomegranate Investment AB (publ) is based in Sweden and was founded in 2014 by a pioneering team with a long and successful track record of investing in high growth companies in emerging markets, particularly in the technology sector. Pomegranate is an investment company that has a strong position primarily in Iran’s consumer technology sector, which, with the easing of international sanctions, represents an extraordinary growth opportunity for European investors. We are entrepreneurs, we have invested in entrepreneurs and a significant proportion of our investors are entrepreneurs themselves.
This press release does not constitute an offer of any securities of Pomegranate Investment. This press release may not be distributed in the United States or to any “U.S. person”, including any U.S. citizen or permanent resident (‘green card holder’) or any entity organised in the United States, whether located inside or outside the United States. Pomegranate shares represent an investment in Iran that is not suitable for U.S. persons.