In addition to the previously listed companies, in which we have significant positions, which are accounted for by the IFRS consolidation rules, our group also has some investments in listed companies, starting from the philosophy “buy stock in businesses that you would like to own yourself”. We think it is more useful to own a smaller part of a company we like than to own nothing.
The IFRS consolidation standards require nevertheless that these holdings be accounted for in the income statement, as if we were actually buying the shares at the beginning of each quarter and selling them on the last day of the quarter, repeatedly, on a quarterly basis. In other words, these fluctuations are recorded in our accounting “benefiting” from capital market-specific multipliers. Such fluctuations will sometimes increase the gross result and sometimes decrease it.
What is important to bear in mind is that our ability to stay close to the companies we have invested in in the long run will give us more opportunities in the long run to make an effective profit from these investments than losses. An appropriate example is our investment in Safetech in October 2020. SAFE shares have increased 15 times between the time of our investment and the current time. From the point of view of cash, we invested RON 290,000 at the time of the private equity and we have received RON 2,500,000 in cash so far, and our current holdings in SAFE shares are still valued at over RON 600,000. In other words, although IFRS accounting shows different values at different times, this investment is already one that has brought a 760% “marked” profit, which can only increase
The investment in CODE shares is in a very similar situation, in Q3 2021, our group recovering cash over two thirds of the amount of cash actually invested, while the current holding is worth over RON 15 million.