Publication of quarterly report for the first quarter of 2020

In the first quarter of 2020, Carpathia Capital SA, investing in entities from the small and medium-sized enterprises sector, generated nearly PLN 0.6 million investment profit. Nearly half of the profit, Carpathia Capital generated from the profit on the sale of securities. The net result was PLN 538 thousand, which means an increase of 48 percent y/y.

The first quarter was a successful period for Carpathia Capital. Given the record drop in the value of stock market indices in Poland and Romania (but also on a global scale) recorded in March, significant outflows of assets from investment funds and the forecasts’ collapse of economic indicators, the clearly positive investment result is a significant success of the Company. The Company’s good result was influenced by the well thought out strategy of building an investment portfolio based on shares of high-quality entities. In the past quarter, Plantwear, whose shareholder is Carpathia Capital, made a successful debut on NewConnect Market. GenXone and SkinWallet, which are in the fund’s portfolio, are planning their debut in the coming months. However, in the second half of this year should debut Detalion Games and Play2Chill gaming companies, whose Carpathia Capital is also an . In addition, in January Carpathia Capital closed a profitable investment on the Romanian market in Medlife with a 52% gain. As a result, PLN 5.04 million engaged in Polish and Romanian shares generated PLN 458 thousand (9.1% q/q), and bonds, deposits and loans worth PLN 4.56 million gave PLN 115 thousand interest and exchange rate differences (2.5% q/q).

– According to our philosophy, the Carpathia Capital fund aims at a diversified portfolio by investing in various sectors in Poland and Romania. Plantwear operates in a very dynamic e-commerce industry and is a leader in the production of wooden jewelry and watches. Carpathia’s upcoming investments, which are aimed at the public market are the following: Punch Punk Games, Polkon, Olymp, Drago Entertainment, Bored Games, President Studio and Hydra Games – comments Paweł Śliwiński, president of INC, mother company of Carpathia Capital.

In the next few  months, two portfolio companies of Carpathia Capital intend to debut on the Warsaw Stock Exchange. The first one is the biotechnological company genXone, in which Carpathia Capital is an important shareholder. It works in the field of molecular genetics and leads, among others, research on SARS-CoV-2 coronavirus. The Company dynamically increases its revenues, which in April exceeded PLN 1 million. In turn, the second company is SkinWallet, which runs a platform for trading digital gaming goods. It is growing very dynamically. In the first quarter of 2020, the Company increased its revenues by 218%. Carpathia Capital acquired SkinWallet shares for around PLN 200 thousands. Carpathia Capital will allocate similar amounts to each of at least 10 companies that should debut in 2020 and which are serviced by the INC group.

– We are currently witnessing an  extremely uncertain economic situation caused by the coronavirus pandemic. Its effects were already visible on the stock indexes and the valuation of individual companies. However, our investment philosophy has allowed us to maintain relative resistance of results to current turbulence. What’s more, thanks to the portfolio’s concentration on companies of so-called new economy, we do not feel a negative impact on the value of revenues. Additionally, at the end of the period, we had cash at the level of PLN 3.3 million, which enables us to carry out further attractive investments – adds Albert Trąpczyński, the fund manager.

Quarterly Report 1Q2020