NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO ANY U.S. PERSON
Highlights of the reporting period
• The net asset value of the Company was EUR 169.5 million as per October 31, 2021, corresponding to EUR 31.4 per share, compared with NAV per share of EUR 33.8 as per April 30, 2021.
• Most of the companies in the portfolio have continued to perform well operationally over the course of the reporting period but have been impacted by a general reduction in tech / growth company valuations, which influence the peer multiples on which many are valued. This has resulted in a 7.2% reduction in NAV as per October 31, 2021, compared with April 30, 2021.
• Digikala continued to show considerable growth in GMV in the first half of Iranian year 1400 compared with the previous year, all while maintaining positive adjusted EBITDA. However, the significant deterioration in peer multiples negatively affected the valuation of Digikala in local currency.
• The valuation of Café Bazaar Group increased by 19%, mainly due to a significantly higher valuation for Divar following continued monetisation success.
• Alibaba travel has seen a significant recovery in predominantly domestic travel and the valuation has been adjusted up accordingly.
•Following the significant rise in 2020, the Iranian stock market has traded sideways in 2021 and is basically unchanged in local currency as per October 31, 2021, compared with the beginning of the year. Given the strengthening of the Iranian currency, and good relative performance, Pomegranate’s investment in the GIF fund has increased by about 13% compared with April 30, 2021.
• Griffon Capital continues to grow its business and offering and remains profitable, but the lacklustre stock market in 2021 means it will not manage to repeat the exceptional 2020 performance in 2021, which has impacted valuation. The previously announced dividend payment was received in the reporting period.
• Pomegranate paid the first tranche of EUR 296 thousand for its Takhfifan investment in the reporting period.
• Sheypoor continues to increase revenue year on year. Due to a slowdown in certain sectors of the economy, the revenue growth rate has been impacted negatively, as have peer multiples, resulting in a decreased valuation of Sheypoor in local currency.
• Pomegranate continues to first establish IRR (Iranian Rial) based valuations for all the portfolio companies, which are then translated into EUR valuations. The Iranian rial NIMA mid spot rate appreciated by 1.6% in value against the EUR over the 6-month period from May 1, 2021 – October 31, 2021, resulting in a small broad positive valuation effect compared to last report.
• Cash and cash equivalents amounted to EUR 9.2 million as per October 31, 2021 (April 30, 2021: 9.9). Additionally, the Company had a liquid portfolio of SEK and EUR denominated corporate bonds at a value of EUR 1.9 million as per October 31, 2021, which means a total sum of cash and liquid investments of EUR 11.1 million (April 30, 2021: 16.6). The Company’s investments in different Griffon equity products have been reclassified from liquid to other investments.
• The number of outstanding shares at the end of the period was 5,404,601.
Events after the end of the reporting period
• In November 2021, Pomegranate successfully completed an offering of 750,000 new shares at a price of 20 EUR/share for gross proceeds of EUR 15 million. The Offering consisted of an institutional offering and a smaller shareholder offering with preference for existing shareholders. The total number of shares in Pomegranate will be 6,239,394 shares after the Offering. The net proceeds from the Offering will be used to participate in a capital raise in Pomegranate’s largest existing portfolio company, as well as to make additional investments in other portfolio assets.
• Following approval at the Company’s AGM on September 13, 2021, a total of 84,793 new shares were issued to board and management under the LTIP 2018 and LTIP 2020 programs.
Management Comments
Florian Hellmich, CEO of Pomegranate Investment AB (publ), commented:
“Despite a slightly weaker six months performance due to peer group adjustments, the year-on-year development remains strong with a 38% NAV increase, which is set to continue environment permitting. We are delighted with the outcome of the recent share offering, not only because of a very high participation and strong vote of confidence from existing shareholders, but also because this will enable us to strengthen Pomegranate’s position in our core high-growth portfolio company and prepare us for the next stage in the Company’s journey. With our very strong balance sheet we are confidently moving forward to consolidate our efforts around e-commerce, marketplaces and online classifieds.”
For additional information, please visit the Company’s website at www.pomegranateinvestment.com or contact:
Investor Relations contact:
Gustav Wetterling, CFO
Tel: +46 8 545 015 50
Email: ir@pomegranateinvestment.com
About Pomegranate
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.