PPF's losses from exiting Russia reach hundreds of mil. of euros - Smejc

Prague, June 23 (CTK) - Czech investment group PPF's costs related to its withdrawal from Russia after the invasion of Ukraine have reached hundreds of millions of euros, and had it not been for that, the group would have made a higher profit last year than before the COVID-19 pandemic, PPF CEO Jiri Smejc told reporters.

PPF posted a net profit of EUR140m (about Kc3.36bn) last year, 49 percent less than a year earlier. The group's assets fell by 5.5 percent to EUR39.9bn (Kc960bn) last year.

"The result reflects the strength and resilience of the group. Fortunately, we were well diversified, which protected us from a geopolitically difficult situation," said Smejc, who has been at the helm of the group for a year. Exiting Russia was the right thing to do, he said.

"There are basic principles that are more important than whether you make a few crowns more or less. The good thing was that we did it quickly," he added.

The group's investment strategy will be geared towards sectors that PPF understands, namely telecommunications, media, financial services and e-commerce, according to Smejc. PPF's strategy is also to get seats on the boards of the companies it invests in.

Over the past 18 months, PPF has focused on business partnerships and acquisitions, mainly in Europe. This has resulted in its entry into ProSiebenSat.1 Media, a German media company, and Poland's InPost, an operator of a European network of automatic parcel machines and logistics centres for e-commerce.

The investment in InPost is a confirmation of the company's entry into Western European markets, as it operates in the UK and France in addition to Poland, according to Smejc.

The PPF group is considering a possible acquisition of Packeta, the owner of Czech logistics company Zasilkovna, Smejc also said. "We will certainly look into it, but if we are interested in Zasilkovna, we would only be interested in the whole thing," he told reporters.

Zasilkovna spokesman Kamil Chalupa refused to comment on Smejc's statement.

Packeta's founders Simona Kijonkova and Jaromir Kijonka, who hold a 48.6 percent stake, announced early this May that Packeta was for sale. Another 21 percent stake in the company is held by online perfume and cosmetics retailer Notino, while Zasilkovna's former programmer Lukas Bilek and entrepreneur Martin Kukacka own a 10 percent stake each. At the end of last year, Packeta had more than 15,000 collection points in four countries.

A year after the termination of negotiations on the merger of Moneta Money Bank with the financial arm of the PPF group, Smejc considers the decision to be unequivocally correct, as Air Bank's growth will outstrip the benefits of synergies with Moneta, he said.

Reports about the resumption of negotiations are unfounded and the reasons for the termination of the original transaction have not disappeared, he added.

PPF's stake in Moneta brings a good dividend yield, so PPF is in no hurry to sell but would be able to talk about a good offer, Smejc said, adding PPF's stake in the bank is such that no one can control the bank without its consent.

The merger of PPF's arm including Air Bank, Czech and Slovak Home Credit and Benxy (Zonky) with Moneta Money Bank was approved by Moneta's shareholders in December 2021. Moneta and PPF then announced the discontinuation of the merger process in late May 2022, citing negative economic developments, which had changed the parameters of the originally planned merger, and the Czech National Bank's capital requirements as the reasons.

The PPF group operates in 25 countries in Europe, Asia and North America. It invests in telecommunications, media, financial services, e-commerce, biotechnology, real estate and engineering.

PPF's corporate ownership and management structure is located in the Netherlands. The majority owner of PPF Group was Petr Kellner, the richest Czech until his death in 2021. Last September, following the approval of an agreement on the distribution of Kellner's estate, his heirs, his wife Renata and his four children, acquired a majority stake of 98.93 percent in PPF Group.

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