Ernst Russ (DE:HXCKk) (ERAG) is making steady progress in repositioning as an asset and investment manager and asset investor, with the legacy business representing around 40% of the group’s operations at end-June 2018 compared with 80% in 2016. However, ERAG’s assets under management (AUM) increased only slightly to €6.1bn in H118, as new investments (especially in fleet expansion) were offset by disposals. Management reaffirmed the earlier FY18 guidance of at least 10% y-o-y revenue growth and operating profit close to the FY17 figure of €3.9m.
H118 results reflect several one-off effects
ERAG reported an operating profit (adjusted by the company for some non-operating items) at €3.3m in H118 (up from €2.1m in H117), while at the same time recording a 14% y-o-y decline in pre-tax profit to €2.9m. This is because the company’s earnings continue to be influenced by a number of one-off factors (which we discuss in more detail below). We estimate that adjusted for these, ERAG’s pre-tax loss stood at €0.6m compared with a loss of €0.8m in H117.
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