(Alliance News) - Argo Group Ltd on Friday widened its interim loss as it reported adverse effects from the war in Ukraine and economic issues in Argentina.
Pretax loss for the six months to June 30 widened to USD3.5 million from USD201,000 a year ago. Revenue contracted by 24% to USD1.3 million from USD1.7 million.
Meanwhile, employee costs increased to USD1.8 million from USD1.1 million.
"The fund was adversely affected by the conflict in Ukraine and the failure of Argentina to capitalise on its renegotiated International Monetary Fund programme but, more generally, the "risk-off" environment hit several long sovereign and corporate positions," the London-based alternative investment manager said.
Argentina's central bank on Friday hiked its main interest rate by 9.5% to 69.5% as inflation hit 71%, a 20-year high.
In Ukraine, Argo holds investment properties. One of them, Riviera Shopping Centre, in May "was partially damaged by a Russian combat missile," the firm said. It expects Riviera to open again in February 2023 after repair works complete.
Argo made a USD500,000 valuation adjustment for expected losses as its loan from Argo Real Estate Ltd Partnerships is exposed to the performance of the property in Ukraine.
The investment manager posted a positive outlook: "The board remains optimistic about the group's prospects based on the transactions in the pipeline and the group's initiatives to increase assets under management".
It added: "Over the longer term, the board believes there is significant opportunity for growth in assets and profits and remains committed to ensuring the group's investment management capabilities and resources are appropriate to meet its key objective of achieving a consistent positive investment performance in the emerging markets sector."
Argo shares were untraded at 14 pence each in London on Friday morning.
By Tom Budszus; tombudszus@alliancenews.com
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Argo Group (ARGO)