Aspis may dispose of UL, USB stakes in Cyprus

Commercial Value gets license — on track for EUR 20 mln profit

 

Aspis Holdings Pcl (MFS) may dispose of its significant stakes in Universal Life (UL) and Universal Bank (USB) with a final decision expected soon if it decides that the offers under consideration are in the best interests of shareholders.

Speaking during a press conference presenting the first half results, Aspis Holdings Chairman Pavlos Psomiades said important developments regarding the UL and USB stakes would occur soon and relevant announcements would follow. He was responding to a question by the Financial Mirror on how the Group would exit both investments considering that it does not have management control.

The comment by Aspis Holdings CEO, Lambros Christophi, promising a “hot summer” of takeovers and deals and that, “we shall be buying and or selling companies when the opportunity arises and at the right price,” is seen as another indirect confirmation that Aspis Holdings is close to a decision to get itself out of investments where it does not have absolute control, such as the 40% stake in UL and the 23% in USB.

With a cost price of EUR 3.20 per share on its USB stake, Aspis is ideally positioned to consider higher bids from would-be buyers and book a substantial profit on its investment. The same is also true in the case of its significant stake in UL, which if disposed above the CYP 3 entry price will give Aspis a substantial profit.

 

— Sharp increase in profits

 

Net premiums advanced by 102% to CYP 9.75 mln (EUR 16.7 mln) following the acquisition of two insurance companies in the beginning of the year (Interalbanian and Aspis Liv.). Total revenue were boosted by 210% YoY to CYP 21.16 mln (EUR 36.26 mln), sharply higher due to realised gains from the sale of investments of CYP 7.1 mln (EUR 12.23 mln) as well as other income of CYP 1.8 mln (EUR 2.8 mln).

Operating profit improved sharply to CYP 9.4 mln (EUR 16.11 mln). After adjusting for an impairment in the value of investments to the tune of CYP 1.4 mln (EUR 2.4 mln), Aspis Holdings reported net profit of CYP 7.124.202 (EUR 12.205.245) in the first half of 2007 compared to a loss of CYP 857.143 (EUR 1.4 mln) in the same period a year ago. EPS jumped to 10.53 cents (18.05 euro cents).

Christophi said the fact that Aspis beat its first half estimate by 20% is significant and the focus should be on the fact that the bulk of profits have been realised and booked.

The company stands by its forecast for net profit of EUR 20 mln made for 2007.

Shareholders’ funds as at June reached EUR 68.17 mln (CYP 39.9 mln), but Christophi added that, “at the moment, shareholders funds are at EUR 97 mln and by the end of the year after the rights issue is completed, we project own capital or shareholders funds of EUR 130 mln.”

 

— Commercial Value

 

Aspis Holdings Chairman Psomiades revealed that Commercial Value Insurance Co. has secured the relevant license from the authorities to commence activities in the general insurance sector, adding that soon, Commercial Value will come under the umbrella of Aspis Holdings.

“Commercial Value will be managed and will operate directly from Greece,” CEO Christophi added.

With the inclusion of Commercial Value and combined with the activities of Liberty Life, Interalbanian and Aspis Liv., the group is set to become a leading insurance player.

Aspis Holdings is also active in investments and is now expanding into new areas of leisure and entertainment, as well as real estate and manufacturing. Recently it acquired stakes in CSE listed stocks Leda, Laser and Lemeco as part of the strategy to diversify into new areas.

For Lemeco, Christophi outlined that there are four alternative scenarios now being considered after it successfully acquired 49.7% at the price of EUR 0.17.

“By early September and after the end of the public offer we shall be in a firm position to reveal more details regarding our future plans,” he said.