• Net asset value per share on 30 June 2008 amounted to EUR 10.15
(corresponding to SEK 96.02) which is a change of -0.5% compared to the net
asset value per share on 31 March 2007 which was EUR 10.20 (corresponding to
SEK 95.68) and a change of -6.6% compared to the net asset value per share on
31 December 2007 which was EUR 10.87 (corresponding to SEK 102.61)
• For the reporting period 1 January - 30 June, the net loss amounted to EUR
-23.3m (corresponding to SEK -220.6m), and earnings per share amounted to EUR
-0.572 (corresponding to SEK -5.41). Net loss for the reporting period includes
EUR -26.6m (corresponding to SEK -251.6m) in unrealised change in value of
investments
• Net loss for the second quarter amounted to EUR -2.5m (corresponding to SEK
-23.7m) and earnings per share amounted to EUR -0.046 (corresponding to SEK
-0.44). Net loss for the second quarter includes EUR -3m (corresponding to SEK
-28m) in unrealized change in value of investments
• On 2 May 2008 East Capital Explorer received the fund units in East Capital
Bering New Europe Fund
• A EUR 40m (corresponding to SEK 378.4m) investment in the new East Capital
Russian Property Fund was announced on 27 May 2008
CEO COMMENTS ON THE SECOND QUARTER
After a quite tough start of the year, many of the markets in Eastern Europe
rebounded in May. The positive trend was short-lived, however, and our markets
faced increased financial uncertainty on the back of the market turbulence that
accelerated in the rest of the world during the quarter. Relative to the weak
performance of most public markets, East Capital Explorer's net asset value has
remained fairly stable, partly due to our quite substantial cash position. The
net asset value per share decreased 0.5% during the second quarter and
decreased 6.6% during the first half of the year. Looking at our fund
investments, many are USD-denominated meaning that a significant part of the
decline in our net asset value is attributable the depreciation of the USD to
the EUR of 6.8% during the first half of the year.
Although we do not expect the global slowdown to leave our investment region
unaffected, our long-term view on the region remains intact. Increasing
inflation is a real concern in many of these countries, but inflation is not
expected to become a longterm issue and the domestic growth prospects in the
region remain robust. Eastern Europe has seen fantastic growth and
unprecedented development in the last ten years. The growth has to a large
extent been attributable the process to catch-up on Western Europe. Going
forward, we firmly believe that this process will continue, creating abundant
investment opportunities in these markets, especially on the private equity
side.
Our most recently announced investment in the new East Capital Russian Property
Fund is one example of how we can gain exposure to the strong underlying
domestic growth in our region. The fund will invest in retail properties in
regional Russian cities where we still meet limited competition from other
investors. The lack of attractive retail space in these cities is apparent and
demand naturally increases in line with the rapid expansion of both local and
international retail concepts across Russia. The fund management will work
actively with customer flows and tenant mix to optimize the use of the
properties.
On 30 June 2008, approximately 7% of East Capital Explorer's portfolio was
exposed to unlisted companies while 35% was exposed to listed companies, a
majority of which are very inaccessible to the mainstream investor. Per the
same date, cash amounted to 58% of the portfolio also including any cash in the
underlying funds. We are starting to see acquisition multiples come down - a
trend that we expect will continue, should markets remain challenging and
external financing possibilities scarce. Our financial flexibility combined
with our Manager's skills and network is a true competitive advantage that will
allow us to maintain a selective approach in our continued investment
activities.
Our first and foremost focus is to make investments that will create attractive
returns for our shareholders. While we intend to be fully invested by May 2009,
market conditions might have an impact on this. Our strategy remains focused on
investments in East Capital's future private equity funds that we expect to be
launched within our favorite sectors banking and finance as well as other
retail and consumer related areas.
Gert Tiivas, CEO
The full interim report is available in the attached PDF-file and on the
website www.eastcapitalexplorer.com.
TELEPHONE CONFERENCE
The report will be presented and commented at a telephone conference with Gert
Tiivas, CEO and Pia Tell Svensson, CFO.
Date: Thursday 21 August 2008
Time: 10.00 am CET
Telephone details: +46 (0)8 505 598 53 (Sweden) or +44 (0)203 043 24 36 (UK).
Please dial-in a few minutes before the conference starts.
The telephone conference will be webcasted simultaneously on
www.eastcapitalexplorer.com. The webcast will also be available on the website
after the telephone conference.
Contact information:
Gert Tiivas, CEO East Capital Explorer +46 8 505 977 30
Louise Hedberg, Head of Communications/IR East Capital Explorer +46 8 505 977 20
Financial reporting calendar - East Capital Explorer:
• Monthly Net Asset Value report on the fifth working day after the end of each
month
• Interim report 1 January - 30 September 2008 on 13 November 2008
• Year-end report 2008 on 18 February 2009
About East Capital Explorer │ East Capital Explorer AB is a Swedish company,
created with the specific aim of bringing unique investment opportunities in
Eastern Europe to a broader investor base. The company invests mainly in East
Capital's private equity and semi-public equity funds that provide exposure to
companies not otherwise accessible via the local stock exchanges in Eastern
Europe. East Capital Explorer targets fast growing sectors such as the power
utilities, financial, retail and consumer goods and real estate sectors. East
Capital Explorer has appointed East Capital to manage its investment
activities. Since 9 November 2007, East Capital Explorer is listed on the OMX
Nordic Exchange Stockholm, Mid Cap.
The information in this interim report is that which East Capital Explorer AB
is required to disclose under Sweden's Securities Market Act.
It was released for publication at 08:20 a.m. CET on 21 August 2008.
