Athena pays huge fees to HB, SFS

Athena Investment Fund Pcl (ATH) reported a spectacular increase in the first nine month profits, which allowed the company to declare a 1.25c or 2.16 euro interim dividend for a fantastic 4.5% yield, but the bumper profits also meant that the company was obliged to pay CYP1 mln in fees to its fund managers, Hellenic Bank and SFS.

According to a management agreement reached in December 2000 and valid until 31 December 2007, the fund managers, HB Investments and SFS are entitled to 20% of either the realized profits or the net profits, whichever is the lesser.

During the 9M period, the realized profits amounted to CYP 4.7 mln or EUR 8.09 mln compared to CYP 1 mln (EUR 1.74 mln) in 9M05, while the net profit in the 9M06 amounted to CYP 5.66 mln or EUR 9.82 mln compared to CYP 2.5 mln or EUR 4.4 mln in 9M05.

Based on the lesser amount of the realized profit of CYP 4.7 mln, the company was obliged to pay CYP 933.955, plus CYP 140k VAT for a total of CYP 1.07 mln or EUR 1.8 mln in performance bonus to HB and SFS.

ATH reported that total income from dividends and interest amounted to EUR 1.2 mln from EUR 878k a year ago. The company also booked a valuation gain of EUR 3.14 mln in the 9M06 compared to EUR 2.8 mln in 9M05. There was also a provision for bad debt charge of EUR 260.000 in this year’s P&L. Total expenses were stable at EUR 785k while EPS amounted to 9.97 euros per share from 4.53 euros a year ago.

Shareholders funds’ improved to EUR 62 mln with net asset value improving to 0.6308 euros, which compared to the CSE price of 0.47 euros indicates a 25% discount.

Athena has a portfolio of CYP 30 mln or EUR 52 mln, mostly of banking shares.