Eastate AB

Cadre Invest S.A. - Consolidated Financial Analysis (2022)

Summary:

The consolidated accounts of Cadre Invest S.A. for the year ended December 31, 2022, focus on asset management, agricultural activities, and some property management, reflecting the financial outcomes of its subsidiaries and associated companies.

Key Performance Indicators:

• Turnover: EUR 47.0 million (31.3% decrease from EUR 68.5 million in 2021)
• Net Income: EUR 30.8 million (20.8% decrease from EUR 38.9 million in 2021)
• Total Assets: EUR 218.1 million (4.3% increase from EUR 209.2 million in 2021)
• Equity Ratio: 92% (increase from 88% in 2021)
• Number of Employees: 179 (decreased from 230 in 2021)
• Dividend to Shareholders: EUR 0.84 million (decreased from EUR 5.89 million in 2021)

Financial Position:

Cadre Invest S.A. maintains a strong financial position with total assets amounting to EUR 218.1 million, an increase from EUR 209.2 million in 2021. This demonstrates the company's capacity to absorb financial shocks and sustain operations despite significant challenges posed by external factors such as geopolitical events.

Financial Performance:

1. Revenue Analysis:

   • The net turnover saw a substantial decrease of 31.3%, from EUR 68.5 million in 2021 to EUR 47.0 million in 2022, primarily due to the geopolitical tensions impacting its operations in Ukraine and Russia.
   • Despite this drop in turnover, the company managed positive profitability, highlighting effective cost management and operational resilience.

2. Profit and Loss:

   • The group's net profit stood at EUR 30.8 million, down by 20.8% compared to 2021.
   • Operational expenses saw a notable decrease in both raw materials and consumables expenses (down EUR 10.3 million) and staff costs (down EUR 7.1 million).

3. Investment Income:

   • Income from other investments was EUR 3.4 million (a positive swing from a loss of EUR 19.4 million in 2021). This reflects the company's ability to generate returns even in challenging market conditions.
   • The equity method investments continued to perform robustly, generating EUR 31.6 million in 2022.

Balance Sheet:

1. Asset Composition:

   • Of the total assets, intangible assets stand at EUR 3.3 million and tangible assets at EUR 13.2 million, indicating solid investments in both intellectual properties and physical infrastructure.
   • Financial assets (majorly participations) represent a significant portion at EUR 174.5 million, demonstrating the company's commitment to strategic investments.

2. Liabilities and Equity:

   • The equity base strengthened to EUR 154.5 million from EUR 141.0 million, a reflection of retained earnings and reserves despite dividend payouts.
   • Minor increase in deferred tax liabilities from EUR 0.98 million to EUR 0.53 million cash.

Cash Flow:

• Cash at bank and in hand registered at EUR 17.5 million, reflecting a stable cash position.
• The provision of EUR 0.84 million in dividends shows a conservative approach towards rewarding shareholders amidst a challenging year.

Risk Factors:

• Geopolitical Risk: Exposure to the Russian and Ukrainian markets renders the group vulnerable to geopolitical instability, as evidenced by the impact of Russia's invasion of Ukraine.
• Market Risk: Fluctuations in prices and investor withdrawal from financial products pose significant risks.
• Operational Risk: Involves potential losses due to organizational inefficiencies, system failures, or external disruptions.

Events after Balance Sheet Date:

In August 2023, Cadre Invest S.A announced the sale of shares in Mellon Fashion Group, which positively impacted both the market value and balance sheet of its subsidiaries.

Conclusion:

Despite the adversities, Cadre Invest S.A. showcased resilience underpinning its strategic investments and effective management practices. The firm maintained strong profitability and liquidity with a robust equity ratio, although revenue contractions indicate the need for adaptive strategies to mitigate external risks. The sale of Mellon Fashion Group shares in 2023 augurs well for future financial stability and growth.