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Ratos profits up in Q2

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Ratos's profits were up by SEK 17m in Q2 compared to the same period last year, according to the Swedish listed private equity firm's latest results.

Earnings before tax in Q2 stood at SEK 38m this year, compared to SEK 21m in 2013.

Pre-tax profits from January to June amounted to SEK 13m this year against SEK -75m in H1 2013, once adjusted for exit gains.

Overall, profits at both the portfolio and management company levels improved compared to the first half of 2013, although the SEK 895m exit gain from broadband provider Stofa boosted last year's results.

Though profits from its portfolio companies dropped by 27% between April and June compared to the same period last year, when excluding items affecting comparability, Ratos's share of profits from its holdings was up 10% for the quarter and 15% for H1 2014.

The rise in pre-tax earnings was somewhat stymied, mainly given the drop in contracts in the Norwegian oil and gas industry for portfolio company Aibel.

The expected drop in contract activity had been announced by Ratos earlier this year, and adjusted to exclude Aibel and Stofa, earnings from Ratos's share of its holdings rose by 36% compared with H1 2013.

Ratos CEO Susanna Campbell reiterated in a conference call that the company's outlook remains positive and unchanged for 2014 and noted that market activity had been higher compared to the same period last year.

She said the GP had seen a "steady but slow" recovery in most of its companies, with steep profit dips in holdings Aibel and Bisnode dragging down the average of the portfolio.

Despite the improved performance, Campbell said talks of an extraordinary dividend were premature.

Ratos pointed out the expected completion of SB Seating's sale to Triton will generate SEK 240m for the GP, representing an 11x return and an IRR in the region of 14%.

Earnings per share for Ratos were down SEK 2.80 to SEK -0.39 compared to last year, and Ratos B shares were up almost 1% at SEK 57.30 on the Swedish stock exchange just before noon local time.

Ratos's Q2 interim report can be found here.