Tuesday, September 21

The investment arm of Amancio Ortega earns 666 million in 2020, 62% less, due to the cut of the Inditex dividend

The Pontegadea Group, the investment arm of Amancio Ortega, cut its net profit by 62% in 2020, to 666 million, as a result of the cut in dividends that Inditex approved last year due to the pandemic.

For its 59.29% in the textile giant that it founded and controls, the largest Spanish fortune received last year 646 million in dividends, 60% less compared to the 1,626 million in 2019, after the measures taken by Inditex to alleviate the impact of the coronavirus. The temporary closure of its stores led the group to record the first quarterly losses in its history between February and April 2020.

The cut in the dividend of the textile giant caused the turnover of the Pontegadea group to fall by 60.2% in 2020, to 1,282 million. Dividend income from investee companies stood at 669 million, compared to 1,640 million a year earlier. The textile group has already partially recovered the path of remuneration to its shareholders, after the good results obtained once the shock of the great seclusion had been overcome. This year Ortega is expected to receive about 1.3 billion in dividends from Inditex.

According to data provided by the Pontegadea group on the occasion of the deposit in the Mercantile Registry of its annual accounts for the past year, the net result for 2020 accounts for 60 million in donations to the Amancio Ortega Foundation, dedicated to educational projects or charitable donations. The figure represents a cut of 42% with respect to the 104 million of the previous year.

Lower valuation

At the end of 2020, Grupo Pontegadea had a real estate portfolio with a market valuation of 14,075 million, 7.17% less than the record of 15,163 million registered just before the arrival of the coronavirus. Ortega owns the largest Spanish real estate agency, focused on the sale and rental of large buildings. Its portfolio of real estate assets is essentially made up of non-residential office buildings located in the center of large cities in nine countries, mainly Spain, the United Kingdom, the United States and in Asia.

According to Pontegadea, eliminating the currency effect, “the decrease in the value of the portfolio is less than 5%, given that the high quality of the assets that comprise it has reduced the impact of the pandemic.” This currency effect also affected the consolidated income from the real estate business. This reached 613 million, slightly below the 621 million in 2019.

The group’s balance sheet at the end of 2020 shows a financial debt of 1,022 million, 6.3% less than in 2019, and cash and equivalents for a value of 802 million, which leaves the net debt position at 220 million. The balance also includes donation commitments to the Amancio Ortega Foundation for an amount of 163 million, compared to 268 million a year earlier.

The Pontegadea Group brings together all the portfolio companies of the richest man in Spain, its subsidiaries dedicated to the real estate business and its participation in Inditex, Enagás (5%) and Telxius (9.99%), the former subsidiary of Torres de Telefónica, recently sold to American Tower, which will provide Ortega with capital gains estimated at 331 million when the operation closes.

One of the billionaire’s latest known acquisitions has been a new building in London, home to firms such as venture capital group Cinven, for about 190 million pounds (220 million euros), acquired in December 2020.