Being a listed company certainly means compliance with specific capital market regulations, quarterly financial reporting requirements, transparency and permanent adaptation to market realities, an extra effort with specific benefits.
Within the ARIR community, communication among members is very important to reinforce and develop best practices in investor communication.
Adrian Marin, Manager Investor Relations, OMV Petrom and Ioana Birta, CFO TeraPlast, ARIR member companies have shared practical aspects of IR activity reporting, information that we invite you to discover in the following:
Adriana Marin, Manager Investor Relations:
We communicate to the company’s management an annual activity report that includes information about meetings with investors and the company’s participation in various events. This information also appears in a simplified form in the annual report.
After each meeting or event, the Investor Relations department compiles a summary of the questions and feedback received from investors.
Once a month we make a report structured in main messages, followed by a few slides that contain a summary of the trading information of the SNP share at BVB (trading price, monthly liquidity).
We track not only absolute share price performance, but also relative performance: against certain local or regional market indices, against a selection of similar companies in the region and against the Brent crude oil quote.
Regarding the liquidity of the share, we also look at the extent to which we meet the criteria for keeping in the FTSE Russell indices. We also present analyst recommendations, compare the median target price to the market price, how much the analyst estimates for certain indicators differ from our internal estimates. In the same report, we also analyze the shareholding, how it changed between two reports of this kind. All this is the basis of this monthly report, which is not necessarily one of activity, but rather a presentation of the evolution of these indicators.
Daniela Șerban, ARIR President:
Related to the analyst estimates, do you also collect informally before financial reporting?
Adriana Marin, Manager Investor Relations:
We publish every quarter, around the 8th of the month after the end of the quarter, the so-called Trading Update, a selection of market and operational indicators based on which we then have discussions with analysts, in which we try to help them to- and make the estimates for the quarter that just ended. We have one week from the publication of the Trading Update until the so-called Quiet Period for these discussions. We talk to them and collect their estimates, which we publish on the website (for each of the indicators we publish the median, the minimum and the maximum, we do not publish the individual estimates of the analysts). At the end of the month, we are among the first to publish the actual results.
To the top management we also send the reactions of the analysts: to this Trading Update, to the quarterly results and to important corporate events such as, for example, the dividend announcement.
Ioana Birta, CFO, TeraPlast:
In the case of the company I represent, TeraPlast, we do roughly the same thing. We follow the main movements in the market, how many shares were traded, the capitalization, how the capitalization evolved, what were the main transactions, the average trading value, the evolution of the price, the evolution of the number of shareholders, how many were repeaters, how many were sellers, the main shareholders who entered, principals who exited.
Every month we take the register of shareholders from the Central Depository and based on the register, in an excel, we make these comparisons. We have a Market Maker contract with BRK Financial Group and part of the contract is a monthly review of the criteria to continue being part of the FTSE Russell indices.
Considering the above, the importance of financial communication and its evaluation by its management is visible, to respond as best as possible to the expectations of investors. The IR activity is based on several principles, such as: the immediate availability of information and equal access to this information for all shareholders, the transparency and consistency of the information provided, compliance with the deadlines for obtaining, analysing, and publishing the results.
So, it is essential to lay the foundations of such a department (RI), to consider it as a basic financial tool and important for both company management and shareholders, with the ultimate goal being the development of the company.