ABC arbitrage: 2022 half-year result: €16.2m / annualized ROE: 20.2%

2022 half-year result: €16.2 million

Annualized ROE: 20.2%

The board of directors of ABC arbitrage met on September 15, 2022, under the chairmanship of Dominique Ceolin, to review the 2022 half-year consolidated financial statements¹.

Activity

In accordance with IFRS standards, consolidated income from current activities at June 30, 2022 amounted to €31.5 million and consolidated net accounting income was €16.2 million, virtually stable (-3. 6%) compared to the first half of 2021.

The first half of 2022 was marked by the war in Ukraine, a situation unknown in Europe since the Second World War and therefore statistically rare. This conflict with its economic tensions weighed negatively on the financial markets. Initially, the differences in perception of the consequences of this war by the United States and Europe and of the asynchronous monetary policies in the face of inflationary risks created major international decorrelations on the markets, particularly in the second quarter. . The main stock market indices ultimately came out with a fairly similar negative performance over the half-year with -20% for the European Eurostoxx 50 index and -21% for the S&P 500.

Despite this difficult context on the world markets, the group produced an excellent half-year result absorbing the drop in activities on M&A operations, a drop consistent with the economic and geopolitical situation. The annualized ROE amounts to 20.2%. This result once again confirms the excellence of the group’s know-how in contexts of high volatility.

Distributor policy

On the proposal of the Board of Directors, and in accordance with its quarterly distribution policy, ABC arbitrage will make two interim dividends of €0.10 per share each. The detachment of the first installment is scheduled for Tuesday, October 11, 2022 for payment on October 13, 2022. The detachment of the second installment is scheduled for Tuesday, December 6, 2022 for payment on December 8, 2022.

Outlook

The year 2022 seems to mark the end of the paradigm of central banks installed since 2012. The size of their balance sheets is still very significant and the anti-fragmentation desire displayed by the ECB confirms for the moment the durability of their strong presence in the market ecosystem. The war in Ukraine and the inflationary pressures built on past central bank interventions and catalyzed by this war will be central topics in the months to come. The level of volatility which, since February 2022, has oscillated above its historical average is a good illustration of this situation. This volatility allows most of the strategies deployed in the group to produce historically high performances. Nevertheless, geographical decorrelations remain difficult to manage for some of our strategies, in particular for the ABCA Reversion fund. Although presenting performances significantly better than the financial indices, these remain below the group’s expectations in such contexts. This, combined with the legitimate apprehensions of investors in this type of situation, makes it unlikely that the ambitions of the “ABC 2022” strategic plan in terms of the collection of new assets under management will be achieved. The group’s strong expertise in this type of context should allow the ABCA Reversion and ABCA Opportunities funds to return to satisfactory levels of performance in the months to come and thus allow a resumption of growth in assets under management. As of September 1, 2022, the average monthly activity rate is thus comparable to that of the 2021 financial year, despite the bans on working on Russian stocks and the overall decline in M&A activities. The 2022 financial year marks the end of the ABC 2022 strategic plan in a context of turbulent markets.
Market metrics should help us finalize most of our objectives while maintaining our investments to initiate the launch of the next strategic plan to be announced in March 2023.

¹ As of the date of this press release, the work of the statutory auditors is being finalized.

• 2022 ABCA CP Results H1 2022 VF