Dearth of info on PIC’s investments

LOSING GROUND: PROFIT, CASH GENERATED DOWN

No breakdown of its investments in listed shares and bonds.

Is the state-owned Public Investment Corporation (PIC) growing its asset base? There’s little information provided in its recent integrated report on investments and none on earnings per investment.

This is quite concerning, as the Government Employees Pension Fund (GEPF) is growing its base of future pension fund beneficiaries. The pensioners could be forgiven for being nervous about whether their defined benefit fund will stay true to its intent.

The GEPF comprises 87.12% of the funds that PIC manages.

During 2018, R3.25 billion was approved for investing in private equity and structured investment products, R9.5 billion for impact investments and over R5.8 billion for unlisted properties.

Notable transactions include investments of R400 million in RH Bophelo, R2 billion in African Rainbow Capital Investments, $350 million (R5.2 billion) in Dangote Cement, and R1.1 billion in Vodacom Tanzania.

Income statement

Revenue for the year is up 10.03% to R1.2 billion and investment income up 13.7% to R182.7 million.

However, profit of R411.3 million is 22.8% down from 2017 and cash generated from operations of R416 million is down 30.2%. Total cash at the end of the year is at R299.8 million, down 25.6%.

Impairment losses, regarding equity and preference share investment in Bophelo Insurance Group, amounted to R82.3 million.

The PIC spent R47 million on new furniture, R11.4 million on IT equipment, and R22 million on leasehold improvements, resulting in a 88.3% overall increase in property, plant and equipment.

Balance sheet

The PIC provides no breakdown of its investments in listed shares and bonds. It’s not possible to ascertain which good investments have been sold, nor whether investments are sound.