In the first half of 2020 Capitalia reported turnover of EUR 505 thousand and profit of EUR 22 thousand. The drop of turnover (minus 18% compared to the corresponding period last year) reflects the smaller volume of deals that we have financed and hence lower commission income. The total amount of rescheduled loans due to pandemic impact has increased from 15% to 20%. On these loans we have allocated provisions in the amount of 10% from the outstanding principal. Our liquidity and balance sheet position has remained strong.

In the second quarter of the year Capitalia issued new financing in the amount of EUR 2.99 million (EUR 3.77 million in the previous quarter). Among the financed businesses during this period where, for example, such companies as SV Digital (production of planners), Manta North (production of pre-fabricated houses) and Cietkoks (production of wood materials). After initial shock of the impact from Covid-19 pandemic and its economic consequences, the companies in the portfolio have recovered well and we did not have to make any significant further provisions to reflect worsening financial performance of the portfolio companies. Capitalia has resumed sales activities with reduced sales manager count. We have obtained a new mandate for fundraising transaction advisory and are in negotiations on a number of new additional cases. Our reliance on Mintos has diminished further and almost all of the new loans are financed within our own investor network using the functionality of Capitalia’s co-financing platform. Growth of the investor network has remained one of our key priorities for the upcoming period as in some cases we have used our current depth of investors and have to participate in projects with larger own capital commitment to finalize the funding transactions. 

We believe that over the third quarter of the year our financing activity will revert back to levels as experienced in the same period last year. In addition to financing new financing deals, we are actively seeking interesting equity investments as well as other investment opportunities. We also will continue to seek new transaction advisory engagements with focus on fundraising for businesses.