Amounts to Rs390m in first nine months of 2015.
KARACHI: Cyan Limited posted a profit of Rs390 million in the first nine months of 2015, down 38% from the earnings of Rs629.3 million recorded in the comparable period of the preceding year, according to a stock filing on Tuesday.
One of the only three registered private equity firms, Cyan has so far been making money off public equity i.e. investing in publicly listed companies to make profit for its shareholders.
The year-on-year decline in its earnings appears to be on the back of a substantial drop in the gains on the sale of investment. They reduced 49% year on year to Rs189 million in Jan-Sep, the company’s profit-and-loss statement shows. Cyan’s return on investment also decreased 16% to Rs153.8 million over the same period.
Cyan is part of the conglomerate of business tycoon Hussain Dawood. Its shares are traded publicly, with its free float constituting about 30% of the company’s outstanding shares.
In an interview with The Express Tribune in March, Cyan CEO Sulaiman S Mehdi had said the company was about to close two private equity deals after reviewing and visiting more than 300 companies in the three years.
A private equity firm typically buys a major stake in a privately held company, uses borrowed money to scale up its operations, improve cash flows, enhance profits, and finally sell it to other companies or cash out through a public listing.
Cyan’s half yearly accounts released earlier on its website show the company conducted due diligence of a transaction in the pharmaceutical sector. It said the company was at an advanced stage of transaction evaluation in the transportation/logistics sector.
Meanwhile, the company kept making money by investing a major chunk of its funds in publicly traded shares. Its average exposure to listed equities during the first two quarters of 2015 remained 87% while the rest of the portfolio consisted of mutual funds and government securities.
Published in The Express Tribune, October 28th, 2015.
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