Deutsche Beteiligungs AG: Brisk investment activity
First-quarter consolidated net income of 7.5 million euros
Frankfurt am Main, 18 March 2013. The 2012/2013 financial year (1 November to 31 October) started with consolidated net income of 7.5 million euros in the first quarter (ended 31 January 2013) for Deutsche Beteiligungs AG (DBAG). Net asset value rose by 0.56 euros to 20.02 euros per share; adjusted for the proposed dividend payment of 1.20 euros per share, this equates to an increase of 3.1 percent. In the preceding 2011/2012 financial year, the first quarter closed with consolidated net income of 6.9 million euros and a rise in net asset value per share of 2.9 percent. DBAG regularly calls attention to the fact that individual quarterly results are of limited significance for a conclusive assessment of the Company’s performance, due to the long-term nature of its business and the erratic swings of external influential factors, such as valuation ratios in the stock markets; this holds particularly true for comparisons of individual quarters.
DBAG started the new financial year with brisk investment activity. Added to the portfolio in the first quarter were two new investments: Heytex Bramsche, a manufacturer of technical textiles, and Plant Systems & Services PSS, an industrial services group. In February, an agreement was signed on a further investment: alongside DBAG Fund V, DBAG will invest in Formel D, a services provider to the automotive industry.
The consolidated net income is largely driven by the net result of valuation and disposal, which totalled 9.9 million euros, and net expenses of 2.6 million euros (“total other income/expenses”). A part of the positive valuation result derives from a divestment. At the end of January 2013, Coveright, an investment entered into in 2003, sold its last remaining operations in South America, which led to a value gain. Other positive value movements stem from the improved earnings that most portfolio companies have budgeted for 2013. Not least, the rise in the price of shares in Homag Group AG, the largest investment in DBAG’s portfolio, contributed positively towards the first-quarter result.
Looking at the prospects, DBAG stated in its interim report issued today: “On the back of the successful divestment of Coveright’s South American operations and the rise in the price of Homag shares, we profited from events in the first three months of the year which should not be expected in every quarter. The results achieved after these initial three months can therefore not be used to extrapolate results for the entire financial year. Although the portfolio is relatively young and value growth will only evolve successively, we are confident about our prospects for the upcoming quarters and beyond. After all, DBAG has a solid portfolio.” The report goes on to say: “Whether and to want extent we will be able to record a further increase in value for our investments and, with that, in consolidated net income for the current year, depends on the economic environment and on other factors that are difficult to foresee, such as the sentiment on the stock markets at the reporting dates.”