PPF Group NV said it expects a new growth phase driven by recent acquisitions and cash from asset sales after the investment firm controlled by Czech billionaire Renata Kellnerova saw its net income surge last year.
The Prague-based telecommunications, media, financial services and e-commerce conglomerate on Tuesday posted a €1.45 billion ($1.6 billion) profit for 2023, jumping from €164 million in the previous year, which was affected by a costly exit from Russia.
The best financial result since 2008 was helped by some one-off items, such as asset sales in Asia, but more than two-thirds of the profit was generated by main business operations, said CEO Jiri Smejc. The telecommunications segment and financial services each contributed more than €500 million, he said.
“We managed to improve the performance of all businesses despite the complicated macroeconomic environment,” he told reporters at the company’s headquarters. “At the same time, we did quite a lot of new deals that have created strong potential for the future.”
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Kellnerova picked Smejc to run PPF in 2022, one year after her husband and the founder of the group died in a helicopter crash. The company has about €43 billion in assets and employs 55,000 people in 25 countries.
Smejc said PPF had made significant progress in a three-year plan that he set for himself and the company when he took the job. This included further steps in exiting Asian markets and the departure from Russia, as well as making investments that helped create a “calmer” portfolio by adding assets in Western countries and industries that are subject to less regulation.
The biggest acquisition during his tenure has been a 28.75% stake in InPost SA, a pioneer in delivering parcels to automated lockers. PPF’s exposure to the Amsterdam-traded e-commerce company is now €2.2 billion, said Smejc, who praised InPost’s plans to expand in the UK, France, Spain and Italy.
“These are four huge markets where InPost’s ambition is to be number one,” he said. “And we think it’s making a very good progress in that direction.”
The company has made further headway in divesting the Asian operations of its consumer finance division Home Credit Group BV. This included a February agreement to sell Home Credit’s business in Vietnam for about €800 million.
The last remaining Home Credit assets in Asia are in China and Kazakhstan. PPF has significantly scaled down Home Credit’s China operations and is in talks with potential buyers, although complex regulations are prolonging the process.
By contrast, Home Credit’s profitability in Kazakhstan is growing rapidly, the CEO said. The long-term plan is to exit this market as well, but a quick sale is unnecessary if the price isn’t right, Smejc said.
The retreat from Asia was partly the result of a deglobalization trend that brought about increased regulation and new geopolitical risks that are more difficult to navigate from afar, Smejc said.
“Being an investor in Asia is something different today than it was 10 years ago,” he said, adding that this especially applied to the financial industry.