Jersey-incorporated, closed-ended infrastructure investment company 3i saw European portfolio income drop in the first quarter while it continues to be affected by negative foreign exchange movements in India.
European portfolio income, which includes dividends and interest receivable from portfolio assets, totalled £12.2m in the three months to June 30th, well below the £19.8m reported in the same period the year before.
3i owns around 9% of Osprey, the owner of AWG, which operates the water and waste water company Anglian Water. AWG was forced to cut its dividend after being affected by increased spending as a result of the drought that hit parts of the UK in recent months.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Meanwhile, the company's holding in the 3i Indian Infrastructure Fund has been hit my a 28% three-month decline in the share price of Adani Power Limited (now the only quoted element of the portfolio) and foreign exchange fluctuations - the sterling has appreciated by 6% against the rupee since the start of April resulting in foreign exchange losses as the company's rupee exposure is unhedged.
The Indian fund agreed to acquire a minority stake in a portfolio of road build-operate-transfer companies of Supreme Infrastructure India in January. On July 3rd, $35.9m was invested by the fund, $7.5m of which was invested by 3i Infrastructure through its share.
Peter Sedgwick, Chairman of 3i Infrastructure, said: "The assets in the portfolio continue to perform well operationally and financially, although market headwinds continue to weigh on the performance of the 3i India Infrastructure Fund."
By July 9th, the company had cash balances of £144.2m, after deducting £26.2m for the payment of the final dividend. At the end of the group's previous financial year (March 31st 2012), cash balances stood at £173.4m.
Shares fell 0.89% to 122p in early trading on Tuesday.
BC
