Capital market development negatively influences valuations – Value contributions from planned disposals
The war in the Ukraine has a significant impact on the macroeconomic development and capital market valuations – this became apparent quickly after the outbreak of the war at the end of February. Therefore, DBAG withdrew its forecast for the current financial year on 7 March 2022. A new forecast was announced on 20 April 2022; it will be explained in detail in the half-year financial report, which will be published on 12 May.
The valuation of DBAG’s portfolio is a key driver for net income. “Changes in capital market multiples for peer-group companies have had a clearly negative impact on gross gains and losses on measurement and disposal for the first half of the financial year 2021/2022 (ending on 31 March 2022). It has become clear that rising energy and raw material prices as well as supply chain disruptions will have a stronger influence on some DBAG portfolio companies, making it unlikely that these companies will reach their targets”, says the ad hoc announcement published on 20 April. And: “Based on preliminary figures, the net asset value of Private Equity Investments at the end of the first half of the financial year stood at approximately 640 million euros; preliminary net income for the period amounted to approximately -35 million euros.”
Based on these insights, and taking planned disposals into account, DBAG has issued a new forecast. According to this, the net asset value of Private Equity Investments as at 30 September 2022 is expected in a range between 620.0 and 695.0 million euros. Full-year earnings from Fund Investment Services are forecast in a range of 14.0 to 16.0 million euros. The factors influencing net asset value, as described above, tend to have the same impact on net income, which is expected in a range between -15.0 and -25.0 million euros for the full year.