FINANCIAL PERFORMANCE HIGHLIGHTS (IFRS)[1]

GEL '000, unless otherwise noted (unaudited)	Jun-25	Mar-25	Change	Dec-24	Change
Georgia Capital NAV overview
NAV per share, GEL	125.63	106.73	17.7%	95.95	30.9%
NAV per share, GBP	33.61	29.80	12.8%	27.14	23.8%
Net Asset Value (NAV)	4,463,211	3,857,578	15.7%	3,609,013	23.7%
Shares outstanding[2]	35,525,800	36,142,305	-1.7%	37,612,488	-5.5%
Cash and liquid funds	342,492[3]	161,853	NMF	278,237	23.1%
NCC ratio2	7.0%	13.5%	-6.5 ppts	12.8%	-5.8 ppts
Georgia Capital Performance	2Q25	2Q24	Change	1H25	1H24	Change
Total portfolio value creation	670,866	(447,522)	NMF	1,014,360	(140,578)	NMF
of which, listed and observable businesses	590,501	(258,645)	NMF	838,450	65,899	NMF
of which, private businesses	80,365	(188,877)	NMF	175,910	(206,477)	NMF
Investments	990	3,068	-67.7%	12,692	6,068	NMF
Divestments	(191,744)	-	NMF	(191,744)	-	NMF
Buybacks[4]	55,969	27,341	NMF	143,845	50,010	NMF
Dividend income[5]	49,697	36,507	36.1%	57,705	50,307	14.7%
Net income/(loss)	654,546	(483,060)	NMF	988,747	(195,458)	NMF
Private portfolio companies' performance1,[6]	2Q25	2Q24	Change	1H25	1H24	Change
Large portfolio companies
Revenue	439,273	384,089	14.4%	869,842	739,464	17.6%
EBITDA	62,256	48,292	28.9%	119,438	87,508	36.5%
Net operating cash flow	53,896	37,163	45.0%	96,992	71,573	35.5%
Total portfolio[7]
Revenue	552,857	498,728	10.9%	1,076,457	977,862	10.1%
EBITDA	87,339	72,090	21.2%	164,975	135,272	22.0%
Net operating cash flow	76,377	57,747	32.3%	144,377	103,206	39.9%

KEY POINTS

Ø NAV per share (GEL) increased 17.7% in 2Q25, driven by both the robust operating growth of our private large portfolio companies and the continued growth in Lion Finance Group PLC's ("LFG") share price

Ø Outstanding quarterly results across our private large portfolio companies with 14.4% and 28.9% y-o-y increases in aggregated revenues and EBITDA in 2Q25, respectively, leading to a 45.0% y-o-y increase in net operating cash flow

Ø Completion of the water utility put option exercise and receipt of US$ 70.4 million cash proceeds in Jul-25, further enhancing GCAP's liquidity position and contributing to a 6.5 ppt q-o-q improvement in the NCC ratio to 7.0% in 2Q25

Ø NCC ratio over the cycle target reduced to 10% from previous 15%, in line with our deleveraging strategy

Ø US$ 18 million increase to the existing share buyback and cancellation programme was announced in Jul-2025, which will complete the GEL 300 million capital return package, significantly earlier than the originally announced end-2026 timeline

Ø Launch of new GEL 700 million capital return programme[8] to be executed through end-2027, commencing with:

o  An initial US$ 50 million share buyback programme following the completion of the current programme in Aug-2025, and

o  At least US$ 50 million partial redemption of the US$ 150 million local Holding Company bonds in Sep-2025

Ø 1.3 million shares repurchased during 2Q25 and so far in 3Q25 (total bought back since demerger now 14.1 million shares (US$ 187 million cost), representing 29.4^[9]% of GCAP's peak issued share capital)

 

Conference call: An investor/analyst conference call will be held on 6-AUG-2025, at 14:00 UK / 15:00 CET / 9:00 US Eastern Time. Please register at the Registration Link to attend the event. Further details are available on the Group's webpage.

CHAIRMAN AND CEO'S STATEMENT

I am pleased to present another strong performance in the second quarter of 2025, which demonstrates the recent significant strategic, financial, and operational progress of Georgia Capital.

NAV per share (GEL) increased by 17.7% to GEL 125.63 in 2Q25. The increase in NAV per share (GEL) in 2Q25 reflects excellent underlying operating performances across the portfolio, reinforcing GCAP's long-term value growth proposition for our shareholders. Value creation in our listed and observable portfolio amounted to GEL 590.5 million (15.3 ppts positive impact on the NAV per share), driven by a 29.7% increase in Lion Finance Group PLC's share price during the quarter. The private portfolio companies delivered GEL 80.4 million value creation (+2.1 ppts impact), underpinned by the strong performance of our high-quality, resilient large businesses, as detailed below. The NAV per share growth was further supported by our ongoing share buyback and cancellation programme (+1.1 ppts impact), partially offset by management platform-related costs and net interest expense (-0.4 ppts impact in total). In GBP terms, the NAV per share in 2Q25 increased by 12.8%, reflecting GBP's 4.4% appreciation against GEL during the quarter. Since 2018, the NAV per share (GEL) has grown at a 17.4% CAGR.

Our private large portfolio companies continue to deliver superior operating performance. In 2Q25, the aggregated revenue of our private large portfolio companies increased by 14.4% y-o-y to GEL 439.3 million, while EBITDA increased by 28.9% y-o-y to GEL 62.3 million. This resulted in quarterly aggregated net operating cash flows from these businesses of GEL 53.9 million, up 45.0% y-o-y.

·    Our retail (pharmacy) business had a very strong quarter. Successful sales initiatives that drove 6.6% same-store revenue growth and a 10.3% increase in average bill size, along with the addition of 14 new pharmacy stores in 2Q25, led to a 24.6% y-o-y increase in EBITDA in 2Q25. This performance also reflects the positive outcome of negotiations to improve trading terms with key suppliers which, together with strong top-line growth, translated into a 2.2 ppts y-o-y improvement in the 2Q25 gross profit margin (1.5 ppts improvement in EBITDA margin in 2Q25).

·    Our insurance business posted 17.5% y-o-y growth in pre-tax profit in 2Q25, reflecting positive developments in both the P&C and medical insurance segments, the latter also boosted by the acquisition of the Ardi insurance portfolio in April 2024.

·    Within our healthcare services business, increased demand for high revenue-generating outpatient services at our large and specialty hospitals, ongoing facility optimisation, and a shift in the sales mix toward higher-margin services at regional and community hospitals, combined with solid performance from our clinics and diagnostics, led to a 36.4% y-o-y EBITDA growth in 2Q25.

Completion of the water utility put option exercise and receipt of cash proceeds. In June 2025, we exercised the option to put our 20% minority stake in the water utility business. Full proceeds of US$ 70.4 million were received on 29 July 2025. Over the last few years, the value of GCAP's 20% stake appreciated significantly, from US$ 45.0 million at the time of the disposal of an 80% stake in 2021, to US$ 70.4 million, translating into 2.9x MOIC in US$ (3.8x MOIC in GEL) and 19.1% IRR in US$ (25.3% IRR in GEL) for 100% stake.

We are completing the GEL 300 million capital return programme well ahead of the initially announced timeline. In May 2024, we announced our Board's intention to make available at least GEL 300 million for share buybacks and dividends through the end of 2026, aiming to capitalise on the attractive opportunity presented by the NAV per share discount levels. As part of this package, in July 2025, we increased the ongoing buyback programme with a final tranche of US$ 18 million, which is expected to be fully utilised in August 2025. Upon completion, under the GEL 300 million capital return package, we will have repurchased c.6.5 million shares, representing c.13.5% of GCAP's peak issued share capital. Notwithstanding the scale of these capital returns, GCAP's liquidity remains solid, in excess of GEL 340 million.

Launch of new GEL 700 million capital return programme until end-2027. Today, we are announcing the launch of a new GEL 700 million capital return programme, which we plan to implement through the end of 2027. The programme covers capital returns through share buybacks, dividends and potential early paydowns of up to US$ 150 million of GCAP's existing sustainability-linked local bonds (which otherwise mature in 2028). The programme, supported by significant improvement in the NCC ratio to a record-low level of 7.0% in 2Q25, is expected to be funded by a combination of the existing strong liquid funds and robust free cash flow generation at GCAP (together expected to exceed GEL 700 million over the programme period). The new programme will commence following the completion of the current share buyback programme in August 2025, starting with an initial US$ 50 million share buyback programme. Additionally, in September 2025, GCAP expects to exercise a call option to redeem at least US$ 50 million of its existing US$ 150 million local Holding Company bonds.

Update on Passive Foreign Investment Company ("PFIC"). The Company believes that it was not a PFIC for its taxable year ending on December 31, 2024, and does not expect to be a PFIC for the current taxable year or the foreseeable future[10]. If the Company was a PFIC for any taxable year during which a U.S. person held our shares, the U.S. person holder would be subject to adverse U.S. federal income tax consequences. To mitigate the potential negative tax implications for U.S. shareholders, the Board is committed to taking action where appropriate to prevent the Company from becoming a PFIC. The Board continues to monitor the Company's income and consolidated assets for PFIC purposes. Changes to the composition and value of the Company's assets in recent years, including the significant rise in the value of the Company's equity stake in Lion Finance Group PLC ("LFG") (which represents nearly 90% of GCAP's current "passive" assets) over recent years, combined with completed exits and other business changes, have increased the Company's proportion of "passive" assets (less than 25% equity holdings) within Georgia Capital's consolidated total assets. The increase has been substantial, from 26% as at 31 December 2021 to approximately 45% as of 30 June 2025, however, the Company's passive assets remain meaningfully below the 50% threshold set by the PFIC regulations (determined annually based on average quarterly balances).

Georgia Capital is a long-term investor in LFG. We see significant opportunity for further value accretion - and expect to hold a material stake - for years to come. Since the end of 2Q25, with our PFIC status in mind, we have reduced our stake in LFG to 18.1% through on-market sales. The sales have represented approximately 10% of LFG's average daily trading volume for the same period. While we are comfortable with our current position and there is no immediate requirement to take further action, we will continue to monitor the Company's PFIC status. In order to reduce the risk of becoming a PFIC, particularly in circumstances such as a significant increase in the value of LFG or further business changes at GCAP, we would consider further diluting our shareholding in LFG, to be undertaken in an orderly manner, while continuing to hold a material stake in LFG.

From a macroeconomic perspective, Georgia's economy remained strong in 1H25, with preliminary data showing 8.3% y-o-y real GDP growth in 1H25. Despite regional geopolitical volatility, activity was supported by robust FX inflows, banking sector credit growth, rising wages, and declining unemployment. Inflation re-emerged, reaching 4.3% in July, above the NBG's 3% target, driven by both domestic and imported pressures. GEL has appreciated 4.1% YTD against the US$ but weakened 6.3% against the EUR amid shifting geopolitical and trade dynamics. FX inflows remained robust, supported by a 21.0% increase in goods exports and 10.0% growth in remittances during the quarter. International reserves began recovering, rising to US$ 4.7 billion in June (+2.3% y-o-y), supported by central bank FX purchases totalling US$ 879 million since March. Monetary policy remains tight, with the policy rate at 8% since May 2024. Fiscal conditions improved, with government debt declining to 36% of GDP, the lowest since 2014, on the back of recent economic growth and continued deleveraging.

Outlook. The strong performance of our portfolio companies, combined with our ongoing commitment to capital returns, was instrumental in delivering our excellent 2Q25 results, also reflected in the narrowing of the NAV per share discount to its lowest level since COVID-19. This performance was supported by the resilience of the Georgian economy, which has continued to demonstrate solid and sustained growth despite ongoing geopolitical challenges. In this context, I am confident that Georgia Capital is well-positioned to continue delivering on its value growth story through consistent NAV per share growth and sustainable EBITDA growth across our large portfolio companies over the medium to long term. At the same time, we remain committed to returning capital through the launch of our new GEL 700 million capital return programme, while advancing towards our aspiration to carry no leverage at the GCAP Holdco level in the medium to long term. As a result, the over the cycle NCC ratio target has been reduced to 10% from the previous 15% target.

 

Irakli Gilauri, Chairman and CEO

 

 

 

 

Statement from Neil Janin, Chairman of the Remuneration Committee

Over time, Irakli Gilauri has accumulated a significant shareholding in Georgia Capital, while not receiving any cash compensation for the last seven years. The Remuneration Committee has therefore encouraged Irakli to sell some of his holdings in Georgia Capital. Irakli has confirmed today that he intends to sell up to 625,000 Georgia Capital shares over time, for financial diversification purposes. This will be his first sale of Georgia Capital shares since the establishment of the Company in May 2018.

 

Irakli currently holds a total of 3,126,503 shares, of which 2,131,709 shares are held directly and 994,794 shares remain unvested (and held in the form of Nil cost options) and will vest over the next few years according to the Remuneration Policy vesting schedules. He has accumulated his shareholding over his 20-year tenure with Georgia Capital and, previously Bank of Georgia, from a combination of cash purchases (213,523 shares), deferred salary shares (nil cost options), and share-based bonus payments from, initially, Bank of Georgia and then Georgia Capital. After the sale, and following the award of 2025 salary shares, Irakli will continue to hold approximately 2.7 million shares.

 

Irakli remains extremely confident in the strong prospects of both Georgia Capital and the Georgian economy, and he will remain a significant shareholder in the Company. For family estate planning purposes, Irakli has informed the Company that he also intends to move his remaining holding into a separate entity.

 

 

DISCUSSION OF GROUP RESULTS

The discussion below analyses the Group's unaudited net asset value at 30-Jun-25 and its income for the second quarter and first half period then ended on an IFRS basis (see "Basis of Presentation" on page 18 below).

Net Asset Value (NAV) Statement

NAV statement summarises the Group's IFRS equity value (which we refer to as Net Asset Value or NAV in the NAV Statement below) at the opening and closing dates for the second quarter (31-Mar-25 and 30-Jun-25). The NAV Statement below breaks down NAV into its components and provides a roll forward of the related changes between the reporting periods. For the NAV Statement for the first half of 2025 see page 17.

NAV STATEMENT 2Q25

GEL '000, unless otherwise noted (Unaudited)	Mar-25	1. Value creation[11]	2a. Investment and Divestments	2b. Buyback	2c. Dividends	3. Operating expenses	4. Liquidity/ FX/Other	Jun-25	Change %
Listed and observable portfolio companies
Lion Finance Group	1,668,984	586,757	-	-	(32,916)	-	-	2,222,825	33.2%
Water utility	188,000	3,744	(191,744)	-	-	-	-	-	NMF
Total listed and observable portfolio value	1,856,984	590,501	(191,744)	-	(32,916)	-	-	2,222,825	19.7%
Listed and observable portfolio value change %		31.8%	-10.3%	0.0%	-1.8%	0.0%	0.0%	19.7%
Private portfolio companies
Large portfolio companies	1,687,399	91,573	-	-	(16,781)	-	943	1,763,134	4.5%
Retail (pharmacy)	783,008	41,966	-	-	(9,960)	-	567	815,581	4.2%
Insurance (P&C and medical)	441,055	29,330	-	-	(6,821)	-	105	463,669	5.1%
Healthcare services	463,336	20,277	-	-	-	-	271	483,884	4.4%
Emerging and other companies	566,210	(11,208)	990	-	-	-	301	556,293	-1.8%
Total private portfolio value	2,253,609	80,365	990	-	(16,781)	-	1,244	2,319,427	2.9%
Private portfolio value change %		3.6%	0.0%	0.0%	-0.7%	0.0%	0.1%	2.9%
Total portfolio value (1)	4,110,593	670,866	(190,754)	-	(49,697)	-	1,244	4,542,252	10.5%
Total portfolio value change %		16.3%	-4.6%	0.0%	-1.2%	0.0%	0.0%	10.5%
Net debt (2)	(255,828)	-	190,754	(56,029)	49,697	(5,821)	350	(76,877)	-69.9%
of which, cash and liquid funds	161,853	-	(990)	(56,029)	49,697	(5,821)	2,038	150,748	-6.9%
of which, loans issued	-	-	-	-	-	-	513	513	NMF
of which, receivable on put option exercise	-	-	191,744	-	-	-	-	191,744	NMF
of which, gross debt	(417,681)	-	-	-	-	-	(2,201)	(419,882)	0.5%
Net other assets/(liabilities) (3)	2,813	-	-	60	-	(3,374)	(1,663)	(2,164)	NMF
of which, share-based comp.	-	-	-	-	-	(3,374)	3,374	-	NMF
Net asset value (1)+(2)+(3)	3,857,578	670,866	-	(55,969)	-	(9,195)	(69)	4,463,211	15.7%
NAV change %		17.4%	0.0%	-1.5%	0.0%	-0.2%	0.0%	15.7%
Shares outstanding11	36,142,305	-	-	(908,062)	-	-	291,557	35,525,800	-1.7%
Net asset value per share, GEL	106.73	18.56	0.00	1.17	0.00	(0.25)	(0.59)	125.63	17.7%
NAV per share, GEL change %		17.4%	0.0%	1.1%	0.0%	-0.2%	-0.6%	17.7%

NAV per share (GEL) was up 17.7% q-o-q in 2Q25, reflecting a GEL 670.9 million value creation across our portfolio companies with a positive 17.4 ppts impact and share buybacks (+1.1 ppts impact). The NAV per share (GEL) growth was slightly offset by management platform-related costs and net interest expense (-0.4 ppts impact in total).

 

Portfolio overview

Total portfolio value amounted to GEL 4.5 billion in 2Q25, up by GEL 431.7 million (up 10.5%) q-o-q:

·      The value of the listed and observable portfolio increased by GEL 365.8 million (up 19.7%) in 2Q25. This reflects the net impact of a) the continued growth in Lion Finance Group's share price and b) a GEL 188.0 million decrease related to the exercise of the put option on GCAP's 20% minority stake, with transaction proceeds of US$ 70.4 million (GEL 191.7 million) recorded as a receivable as of 30-Jun-25, as presented in the NAV statement above.

·      The value of the private portfolio increased by GEL 65.8 million (up 2.9%), mainly resulting from a) GEL 80.4 million value creation, b) investments of GEL 1.0 million and c) a decrease of GEL 16.8 million due to dividends paid to GCAP.

 

Consequently, as of 30-Jun-25, the private portfolio value amounted to GEL 2.3 billion (51.1% of the total), and the listed portfolio value totalled GEL 2.2 billion (48.9% of the total portfolio value).

 

1) Value creation

·      Value creation from the listed and observable portfolio amounted to GEL 590.5 million in 2Q25, primarily driven by:

o  GEL 586.8 million value creation in Lion Finance Group, reflecting a combination of a 29.7% increase in its share price and a 4.4% appreciation of GBP against GEL in 2Q25.

o  GEL 3.7 million value creation in the water utility business.

·      Value creation across our private portfolio companies amounted to GEL 80.4 million in 2Q25, reflecting:

o  GEL 91.6 million value creation from our private large portfolio companies, which delivered substantial growth in aggregated revenues (up 14.4% y-o-y) and EBITDA (up 28.9% y-o-y) in 2Q25, translating into a GEL 113.5 million operating performance-related value creation. This was partially offset by a GEL 21.9 million negative net impact from changes in implied valuation multiples and FX rates.

o  GEL 11.2 million negative value creation from our emerging and other businesses.

 

As a result, the total portfolio value creation amounted to GEL 670.9 million in 2Q25.

 

The table below summarises value creation drivers in our businesses in 2Q25:

Portfolio Businesses	Operating Performance[12]	Multiple Change and FX[13]	Value Creation
GEL '000, unless otherwise noted (unaudited)	(1)	(2)	(1)+(2)
Listed and observable portfolio			590,501
Lion Finance Group			586,757
Water utility			3,744
Private portfolio	221,978	(141,613)	80,365
Large portfolio companies	113,471	(21,898)	91,573
Retail (pharmacy)	35,201	6,765	41,966
Insurance (P&C and medical)	28,057	1,273	29,330
Healthcare services	50,213	(29,936)	20,277
Emerging and other businesses	108,507	(119,715)	(11,208)
Total portfolio	221,978	(141,613)	670,866

 

Valuation overview[14]

In 2Q25, valuation assessments of our retail (pharmacy), insurance, healthcare services, renewable energy, and education businesses were performed by a third-party independent valuation firm Kroll, in line with International Private Equity Valuation ("IPEV") guidelines, as part of the semi-annual independent valuation cycle for these businesses. The independent valuation assessments, which serve as an input for Georgia Capital's estimate of fair value, were performed by applying an income approach (DCF), cross-checked with market approach (listed peer multiples and, in some cases, precedent transactions). In line with our strategy, from time to time we may receive offers from interested buyers for our private portfolio companies, which would be considered in the overall valuation assessment, where appropriate.

We perform quarterly sensitivity analyses on our valuations. In light of prevailing market conditions, the 2Q25 assessment indicated that a 100-basis-point change in discount rates used in the income approach for valuing unquoted investments would result in a GEL c.235 million, or 5%, change in the fair value of equity investments.

 

The enterprise value ("EV") and equity value development of our businesses in 2Q25 is summarised in the following table:

	Enterprise Value (EV)			Equity Value
GEL '000, unless otherwise noted (Unaudited)	30-Jun-25	31-Mar-25	Change %	30-Jun-25	31-Mar-25	Change %	% share in total portfolio
Listed and observable portfolio				2,222,825	1,856,984	19.7%	48.9%
Lion Finance Group				2,222,825	1,668,984	33.2%	48.9%
Water utility				-	188,000	NMF	0.0%
Private portfolio	3,448,533	3,371,214	2.3%	2,319,427	2,253,609	2.9%	51.1%
Large portfolio companies	2,500,000	2,393,949	4.4%	1,763,134	1,687,399	4.5%	38.8%
Retail (pharmacy)	1,109,500	1,067,124	4.0%	815,581	783,008	4.2%	18.0%
Insurance (P&C and medical)	506,000	482,111	5.0%	463,669	441,055	5.1%	10.2%
Healthcare services	884,500	844,714	4.7%	483,884	463,336	4.4%	10.7%
Emerging and other businesses	948,533	977,265	-2.9%	556,293	566,210	-1.8%	12.2%
Total portfolio				4,542,252	4,110,593	10.5%	100.0%

 

Private large portfolio companies (38.8% of total portfolio value)

Retail (Pharmacy) (18.0% of total portfolio value) - The EV of Retail (Pharmacy) was up by 4.0% to GEL 1,109.5 million in 2Q25, reflecting the strong operating performance of the business. Retail revenues increased by 6.4% y-o-y in 2Q25, reflecting successful sales initiatives that drove 6.6% same-store revenue growth and a 10.3% increase in average bill size. The performance was further boosted by the addition of 14 new pharmacy stores in 2Q25. Wholesale revenues were up by 13.9% y-o-y in 2Q25 on the back of higher revenues from state healthcare programmes, contributing to an 8.0% y-o-y increase in the total revenue of the business. Gross profit margin improved by 2.2 ppts y-o-y to 32.7% in 2Q25, further supported by the positive outcome of improved trading terms with key suppliers across all major categories and overall shift in the sales mix towards higher-margin non-prescription medicines. Operating expenses (excl. IFRS 16) were up 11.9% y-o-y in 2Q25, primarily driven by higher salary expenses associated with business growth. Consequently, the 2Q25 EBITDA (excl. IFRS 16) increased by 24.6% y-o-y to GEL 24.4 million. See page 11 for details. LTM EBITDA (incl. IFRS 16) was up 3.4% to GEL 134.6 million in 2Q25. Net debt (incl. IFRS 16) increased by 3.3% to GEL 286.4 million as at 30-Jun-25, mainly resulting from a GEL 10.0 million dividend payment to GCAP in 2Q25. As a result, the fair value of GCAP's 98.0% holding increased by 4.2% to GEL 815.6 million in 2Q25. The implied LTM EV/EBITDA valuation multiple (incl. IFRS 16) remained unchanged q-o-q at 8.2x as of 30-Jun-25 (down from 8.8x y-o-y as of 30-Jun-24).

Insurance (P&C and Medical) (10.2% of total portfolio value) - The insurance business combines: a) P&C Insurance and b) Medical Insurance. P&C Insurance revenues were up 21.6% y-o-y to GEL 44.2 million in 2Q25, driven by growth in the motor and credit life insurance lines. The revenue of the medical insurance business increased by 31.6% y-o-y and amounted to GEL 52.8 million in 2Q25, reflecting organic portfolio growth, a mid-teen percentage increase in insurance policy prices and the positive impact of the acquisition of the Ardi insurance portfolio in April 2024. The combined ratio for P&C insurance improved by 4.0 ppts y-o-y in 2Q25, mainly reflecting the positive outcome of revised price segmentation initiatives. The combined ratio for medical insurance increased by 2.2 ppts y-o-y in 2Q25, reflecting the low base related to the acquisition of Ardi, as the comparative 2024 figures only partially account for Ardi's claims activity. Adjusted for the acquisition impact, the combined ratio of medical insurance was broadly stable, up 1.0 ppts y-o-y in 2Q25. As a result, the pre-tax profit of the combined insurance business increased by 17.5% y-o-y to GEL 13.4 million in 2Q25. See page 12 for details. The equity value of the business was up 5.1% q-o-q to GEL 463.7 million in 2Q25. The implied LTM P/E valuation multiple[15] stood at 9.8x as of 30-Jun-25 (9.8x as of 31-Mar-25 and 9.7x as of 31-Dec-24). This valuation assessment also incorporates the first-time revaluation of Ardi using the market approach, which had previously been carried at the price of recent investment. The insurance business is also subject to ongoing litigation, as further detailed on page 23.

Healthcare services (10.7% of total portfolio value) - Healthcare services EV increased by 4.7% to GEL 884.5 million in 2Q25, resulting from the strong operating performance of the business. Total revenue increased by 18.0% y-o-y in 2Q25, reflecting a) increased demand for high revenue-generating outpatient services at our large and specialty hospitals, b) optimisation of the facilities and significant improvement in sales mix at our regional and community hospitals, and c) robust performance of the clinics and diagnostics business, driven by a growing customer base in alignment with enhanced service offerings. Operating expenses (excl. IFRS 16) were up by 17.4% y-o-y in 2Q25, primarily due to higher salary and rent expenses associated with the business expansion. This translated into 36.4% y-o-y EBITDA (excl. IFRS 16) growth in 2Q25. See page 14 for details. Consequently, LTM EBITDA (incl. IFRS 16) was up by 8.9% to GEL 89.4 million in 2Q25. Net debt (incl. IFRS 16) increased by 3.7% q-o-q to GEL 361.5 million as at 30-Jun-25, reflecting capex investments for expansion of service offerings and upgrading the medical equipment primarily in the outpatient direction. As a result, the equity value of the healthcare services business was assessed at GEL 483.9 million in 2Q25 (up 4.4% q-o-q), translating into an implied LTM EV/EBITDA multiple (incl. IFRS 16) of 9.9x at 30-Jun-25, down from 10.3x at 31-Mar-25 (down from 11.6x at 30-Jun-24).

Emerging and other businesses (12.2% of total portfolio value) - Of the emerging and other private portfolio businesses, renewable energy, education and auto service are valued based on LTM EV/EBITDA. Wine, housing development and hospitality businesses are valued based on DCF. Following the disposal of an 80% stake in the beer and distribution business, its remaining value is assessed using the put option valuation, reflecting GCAP's clear exit path through a put and call structure at pre-agreed EBITDA multiples. The portfolio value of emerging and other businesses decreased by 1.8% to GEL 556.3 million in 2Q25, mainly reflecting GEL 11.2 million negative value creation. See performance highlights of these businesses on page 16.

Listed portfolio (48.9% of total portfolio value)

Lion Finance Group (48.9% of total portfolio value) - In 1Q25, Lion Finance Group delivered an annualised ROAE of 28.7% and a q-o-q loan book growth of 2.3% in Georgia and 1.3% in Armenia on a constant currency basis. In 2Q25, the market value of GCAP's equity stake in Lion Finance Group increased by 33.2% to GEL 2.2 billion, reflecting a combination of a 29.7% increase in LFG's share price, a 4.4% appreciation of GBP against GEL, and the collection of GEL 32.9 million in buyback dividends during the quarter. The LTM P/E valuation multiple was at 5.9x as of 30-Jun-25 (4.4x as of 31-Mar-25). Subsequent to 2Q25, GCAP collected GEL 47.2 million final cash from the LFG. Lion Finance Group's public announcement of their 2Q25 results, when published, will be available on Lion Finance Group's website.

 

2) Investments[16]

In 2Q25, GCAP invested GEL 1.0 million in the education business.

 

3) Share buybacks

During 2Q25, 908,062 shares with a total value of US$ 20.3 million (GEL 56.0 million) were bought back under GCAP's share buyback and cancellation programme. Subsequent to 2Q25, additional 385,000 shares with a value of US$ 10.8 million (GEL 29.4 million) have been repurchased under the ongoing share buyback programme as at 5 August 2025.

 

4) Dividends

In 2Q25, GCAP recorded GEL 49.7 million dividend income from its portfolio companies:

·      GEL 32.9 million was received from participation in Lion Finance Group's buyback programme.

·      GEL 10.0 million dividend was collected from the retail (pharmacy) business.

·      GEL 6.8 million dividend was received from the insurance business, of which GEL 5.3 million was collected from P&C insurance and GEL 1.5 million from medical insurance.

 

1H25 NAV STATEMENT HIGHLIGHTS

GEL '000, unless otherwise noted (Unaudited)	Dec-24	1. Value creation[17]	2a. Investment and Divestments	2b. Buyback	2c. Dividends	3. Operating expenses	4. Liquidity/ FX/Other	Jun-25	Change %
Total listed and observable portfolio value	1,609,035	838,450	(191,744)	-	(32,916)	-	-	2,222,825	38.1%
Listed and observable portfolio value change %		52.1%	-11.9%	0.0%	-2.0%	0.0%	0.0%	38.1%
Total private portfolio companies	2,152,455	175,910	12,692	-	(24,789)	-	3,159	2,319,427	7.8%
of which, large portfolio companies	1,557,951	227,126	-	-	(23,816)	-	1,873	1,763,134	13.2%
of which, emerging and other companies	594,504	(51,216)	12,692	-	(973)	-	1,286	556,293	-6.4%
Private portfolio value change %		8.2%	0.6%	0.0%	-1.2%	0.0%	0.1%	7.8%
Total portfolio value	3,761,490	1,014,360	(179,052)	-	(57,705)	-	3,159	4,542,252	20.8%
Total portfolio value change %		27.0%	-4.8%	0.0%	-1.5%	0.0%	0.1%	20.8%
Net debt	(154,425)	-	179,052	(143,229)	57,705	(11,340)	(4,640)	(76,877)	-50.2%
Net asset value	3,609,013	1,014,360	-	(143,845)	-	(18,980)	2,663	4,463,211	23.7%
NAV change %		28.1%	0.0%	-4.0%	0.0%	-0.5%	0.1%	23.7%
Shares outstanding17	37,612,488	-	-	(2,776,848)	-	-	690,160	35,525,800	-5.5%
Net asset value per share, GEL	95.95	26.97	0.00	3.52	0.00	(0.50)	(0.32)	125.63	30.9%
NAV per share, GEL change %		28.1%	0.0%	3.7%	0.0%	-0.5%	-0.3%	30.9%

NAV per share (GEL) was up 30.9% in 1H25, mainly reflecting a GEL 1.0 billion value creation across our portfolio companies with a positive 28.1 ppts impact and share buybacks (+3.7 ppts impact). The NAV per share (GEL) growth was slightly offset by management platform-related costs and net interest expense (-0.9 ppts impact in total).

 

Portfolio overview

The portfolio value increased by GEL 780.8 million (up 20.8%) in 1H25:

·      The value of the listed and observable portfolio increased by GEL 613.8 million (up 38.1%), reflecting the net impact of the strong performance of Lion Finance Group's share price and the exercise of the put option on GCAP's 20% minority stake in the water utility business, as detailed above.

·      The value of the private portfolio increased by GEL 167.0 million (up 7.8%), mainly resulting from a) GEL 175.9 million value creation, b) investments of GEL 12.7 million and c) a decrease of GEL 24.8 million due to dividends paid to GCAP.

 

Value creation

Total portfolio value creation amounted to GEL 1.0 billion in 1H25.

·      A 50.3% increase in Lion Finance Group's share price, supported by a 5.7% appreciation of GBP against GEL in 1H25, led to a GEL 834.7 million value creation

·      Value creation across our private portfolio companies amounted to GEL 175.9 million in 1H25, reflecting:

o  GEL 346.4 million operating performance-related increase in the value of our private assets.

o  GEL 170.5 million negative net impact from changes in implied valuation multiples and FX rates.

 

As a result, the total portfolio value creation amounted to GEL 1.0 billion in 1H25.

 

 

 

 

 

 

 

 

The table below summarises value creation drivers in our businesses in 1H25:

Portfolio Businesses	Operating Performance[18]	Multiple Change and FX[19]	Value Creation
GEL '000, unless otherwise noted (unaudited)	(1)	(2)	(1)+(2)
Listed and observable portfolio			838,450
Lion Finance Group			834,706
Water utility			3,744
Private portfolio	346,387	(170,477)	175,910
Large portfolio companies	284,864	(57,738)	227,126
Retail (pharmacy)	133,009	(24,724)	108,285
Insurance (P&C and medical)	44,947	4,426	49,373
Healthcare services	106,908	(37,440)	69,468
Emerging and other businesses	61,523	(112,739)	(51,216)
Total portfolio	346,387	(170,477)	1,014,360

 

The enterprise value ("EV") and equity value development of our businesses in 1H25 is summarised in the following table:

	Enterprise Value (EV)			Equity Value
GEL '000, unless otherwise noted (Unaudited)	30-Jun-25	31-Dec-24	Change %	30-Jun-25	31-Dec-24	Change %	% share in total portfolio
Listed and observable portfolio				2,222,825	1,609,035	38.1%	48.9%
Lion Finance Group				2,222,825	1,421,035	56.4%	48.9%
Water utility				-	188,000	NMF	0.0%
Private portfolio	3,448,533	3,287,665	4.9%	2,319,427	2,152,455	7.8%	51.1%
Large portfolio companies	2,500,000	2,262,744	10.5%	1,763,134	1,557,951	13.2%	38.8%
Retail (pharmacy)	1,109,500	1,021,000	8.7%	815,581	716,130	13.9%	18.0%
Insurance (P&C and medical)	506,000	463,144	9.3%	463,669	427,945	8.3%	10.2%
Healthcare services	884,500	778,600	13.6%	483,884	413,876	16.9%	10.7%
Emerging and other businesses	948,533	1,024,921	-7.5%	556,293	594,504	-6.4%	12.2%
Total portfolio				4,542,252	3,761,490	20.8%	100.0%

 

2) Investments[20]

In 1H25, GCAP invested GEL 12.7 million in its private portfolio companies, including GEL 7.9 million in the education business and GEL 4.4 million in the renewable energy business.

 

3) Share buybacks

During 1H25, 2,776,848 shares were bought back for a total consideration of GEL 143.8 million.

·      2,645,394 shares with a total value of US$ 49.0 million (GEL 137.1 million) were bought back under GCAP's share buyback and cancellation programme.

·      131,454 shares (GEL 6.7 million in value) represent the tax-related statutory buyback for the management trust, where the average cost of unawarded shares is GBP 8.6 as of 30 June 2025.

 

4) Dividends

In 1H25, GCAP recorded GEL 57.7 million dividend income from its portfolio companies:

·      GEL 32.9 million was received from participation in Lion Finance Group's buyback programme

·      GEL 13.9 million dividend was received from the insurance business, of which GEL 11.1 million was collected from P&C insurance and GEL 2.8 million from medical insurance.

·      GEL 10.0 million dividend was collected from the retail (pharmacy) business.

·      GEL 1.0 million dividend was collected from the auto service business.

 

 

 

 

 

 

 

 

 

 

 

 

Net Capital Commitment (NCC) overview

Below we describe the components of Net Capital Commitment (NCC) as of 30 June 2025, 31 March 2025 and 31 December 2024. NCC represents an aggregated view of all confirmed, agreed and expected capital outflows (including a buffer for contingencies) at both Georgia Capital PLC and JSC Georgia Capital levels

Components of NCC GEL '000, unless otherwise noted (unaudited)	30-Jun-25	31-Mar-25	Change	31-Dec-24	Change
Total cash and liquid funds	150,748	161,853	-6.9%	278,237	-45.8%
Loans issued	513	-	NMF	-	NMF
Receivable on put option exercise	191,744	-	NMF	-	NMF
Gross debt	(419,882)	(417,681)	0.5%	(432,662)	-3.0%
Net debt (1)	(76,877)	(255,828)	-69.9%	(154,425)	-50.2%
Guarantees issued (2)	-	-	NMF	-	NMF
Net debt and guarantees issued (3)=(1)+(2)	(76,877)	(255,828)	-69.9%	(154,425)	-50.2%
Planned investments (4)	(102,864)	(105,516)	-2.5%	(118,480)	-13.2%
of which, planned investments in renewable energy	(63,098)	(64,110)	-1.6%	(69,518)	-9.2%
of which, planned investments in education	(39,766)	(41,406)	-4.0%	(48,962)	-18.8%
Announced buybacks (5)	(187)	(56,363)	-99.7%	(67,421)	-99.7%
Contingency/liquidity buffer (6)	(136,180)	(138,365)	-1.6%	(140,340)	-3.0%
Total planned investments, announced buybacks and contingency/liquidity buffer (7)=(4)+(5)+(6)	(239,231)	(300,244)	-20.3%	(326,241)	-26.7%
Net capital commitment (3)+(7)	(316,108)	(556,072)	-43.2%	(480,666)	-34.2%
Portfolio value	4,542,252	4,110,593	10.5%	3,761,490	20.8%
NCC ratio	7.0%	13.5%	-6.5 ppts	12.8%	-5.8 ppts

Cash and liquid funds. Total cash and liquid funds' balance decreased by 6.9% q-o-q to GEL 150.7 million in 2Q25 (down 45.8% in 1H25), mainly reflecting cash outflows for share buybacks during the quarter, partially offset by the collection of dividends as described above.

Loans issued. Issued loans' balance primarily refers to loans issued to our private portfolio companies and are lent at market terms. The balance was up by GEL 0.5 million in 2Q25, reflecting a new loan issued to our auto service business during the quarter.

Receivable on put option exercise. The balance as at 30-Jun-25 reflects US$ 70.4 million (GEL 191.7 million) proceeds related to the exercise of the put option on GCAP's 20% stake in the water utility business. These proceeds were collected on 29 July 2025.

Gross debt. In US$ terms, the balance was up 2.1% q-o-q in 2Q25, reflecting the interest accrual on the US$ 150 million sustainability-linked bonds. In GEL terms, the balance remained largely flat, up 0.5% in 2Q25, further reflecting the foreign exchange rate movements during the quarter. The gross debt balance in US$ terms remained flat in 1H25 and was down by 3.0% in GEL terms, primarily driven by GEL's appreciation against US$ in 1H25.

Planned investments. Planned investments' balance represents expected investments in renewable energy and education businesses over the next 2-3 years. The balance in US$ terms was down by 0.9% and 10.5% in 2Q25 and 1H25, respectively, reflecting cash outflows for the investment projects as described above.

Announced buybacks. The balance of the announced buybacks at 30-Jun-25 reflects the unutilised share buybacks under GCAP's then ongoing US$ 50 million share buyback and cancellation programme, which was increased to US$ 68 million in July 2025. The new US$ 50 million share buyback and cancellation programme planned to be announced later in August 2025 will be reflected in the 3Q25 NCC table.

Contingency/liquidity buffer. The balance reflects the provision for cash and liquid assets in the amount of US$ 50 million, for contingency/liquidity purposes. The balance remained unchanged in US$ terms as at 30-Jun-25.

 

As a result of the movements outlined above, the NCC ratio improved by 6.5 ppts q-o-q to 7.0% as of 30 June 2025 (5.8 ppts improvement in 1H25).

 

 

 

 

 

 

 

 

 

INCOME STATEMENT (ADJUSTED IFRS/APM)

Net income under IFRS was GEL 661.5 million in 2Q25 (GEL 477.6 million net loss in 2Q24) and GEL 991.7 million in 1H25 (GEL 192.3 million net loss in 1H24). The IFRS income statement is prepared on the Georgia Capital PLC level and the results of all operations of the Georgian holding company JSC Georgia Capital are presented as one line item. As we conduct almost all of our operations through JSC Georgia Capital, through which we hold all of our portfolio companies, the IFRS results provide little transparency on the underlying trends. Accordingly, to enable a more granular analysis of those trends, the following adjusted income statement presents the Group's results of operations for the period ending June 30 as an aggregation of (i) the results of GCAP (the two holding companies Georgia Capital PLC and JSC Georgia Capital, taken together) and (ii) the fair value change in the value of portfolio companies during the reporting period. For details on the methodology underlying the preparation of the adjusted income statement, please refer to page 94 in Georgia Capital PLC's 2024 Annual report.

INCOME STATEMENT (Adjusted IFRS/APM)

GEL '000, unless otherwise noted (unaudited)	2Q25	2Q24	Change	1H25	1H24	Change
Dividend income	49,697	36,507	36.1%	57,705	50,307	14.7%
Interest income	1,847	1,681	9.9%	4,637	3,320	39.7%
Realised/unrealised gain/(loss) on liquid funds	23	(409)	NMF	73	(961)	NMF
Interest expense	(8,922)	(8,970)	-0.5%	(18,026)	(17,579)	2.5%
Gross operating income	42,645	28,809	48.0%	44,389	35,087	26.5%
Operating expenses	(9,195)	(9,332)	-1.5%	(18,979)	(18,672)	1.6%
GCAP net operating income	33,450	19,477	71.7%	25,410	16,415	54.8%
Fair value changes of portfolio companies
Listed and observable portfolio companies	557,585	(280,238)	NMF	805,534	39,967	NMF
of which, Lion Finance Group PLC	553,841	(273,238)	NMF	801,790	43,967	NMF
of which, Water utility	3,744	(7,000)	NMF	3,744	(4,000)	NMF
Private portfolio companies	63,584	(203,791)	NMF	151,121	(230,852)	NMF
Large portfolio companies	74,792	(148,344)	NMF	203,310	(189,573)	NMF
of which, retail (pharmacy)	32,006	(75,400)	NMF	98,325	(95,399)	NMF
of which, insurance (P&C and medical)	22,509	13,491	66.8%	35,517	12,968	NMF
of which, healthcare services	20,277	(86,435)	NMF	69,468	(107,142)	NMF
Emerging and other businesses	(11,208)	(55,447)	-79.8%	(52,189)	(41,279)	26.4%
Total investment return	621,169	(484,029)	NMF	956,655	(190,885)	NMF
Income/(loss) before foreign exchange rate movements and non-recurring expenses	654,619	(464,552)	NMF	982,065	(174,470)	NMF
Net foreign currency gain/(loss)/impairment	4,418	(18,162)	NMF	11,431	(19,320)	NMF
Non-recurring expenses	(4,491)	(346)	NMF	(4,749)	(1,668)	NMF
Net income/(loss)	654,546	(483,060)	NMF	988,747	(195,458)	NMF

The gross operating income stood at GEL 42.6 million in 2Q25, up 48.0% y-o-y (up 26.5% y-o-y in 1H25), reflecting robust dividend income during the period.

GCAP Operating Expenses Components

GEL '000, unless otherwise noted (unaudited)	2Q25	2Q24	Change	1H25	1H24	Change
Administrative expenses[21]	(3,225)	(2,897)	11.3%	(6,004)	(5,757)	4.3%
Management expenses - cash-based[22]	(2,596)	(3,028)	-14.3%	(5,335)	(5,828)	-8.5%
Management expenses - share-based[23]	(3,374)	(3,407)	-1.0%	(7,640)	(7,087)	7.8%
Total operating expenses	(9,195)	(9,332)	-1.5%	(18,979)	(18,672)	1.6%
of which, fund type expense[24]	(2,280)	(2,287)	-0.3%	(4,509)	(4,788)	-5.8%
of which, management fee type expenses[25]	(6,915)	(7,045)	-1.8%	(14,470)	(13,884)	4.2%

GCAP management fee expenses starting from 2024 have a self-targeted cap of 0.75% of Georgia Capital's NAV. The LTM management fee expense ratio was 0.64% at 30-Jun-25 (0.85% as of 30-Jun-24).

Total investment return represents the increase (decrease) in the fair value of our portfolio. Total investment return was GEL 621.2 million in 2Q25 and GEL 956.7 million in 1H25, reflecting the changes in the value of our portfolio companies. We discuss valuation drivers for our businesses on pages 5-6. The performance of each of our private large portfolio companies is discussed on pages 11-15.

As a result of the movements described above, GCAP's adjusted IFRS net income was GEL 654.5 million in 2Q25 and GEL 988.7 million in 1H25.

 

 

DISCUSSION OF PORTFOLIO COMPANIES' RESULTS (STAND-ALONE IFRS)

The following sections present the IFRS results and business development extracted from the individual portfolio company's IFRS accounts, where the 2Q25, 1H25, 2Q24 and 1H24 portfolio company's accounts and respective IFRS numbers are unaudited. We present key IFRS financial highlights, operating metrics and ratios along with commentary explaining the developments behind the numbers. For the majority of our portfolio companies, the fair value of our equity investments is determined using an income approach (DCF), cross-checked with a market approach (listed peer multiples and precedent transactions). Under the discounted cash flow (DCF) valuation method, fair value is estimated by deriving the present value of the business using reasonable assumptions of expected future cash flows and the terminal value, and the appropriate risk-adjusted discount rate that quantifies the risk inherent to the business. Under the market approach, listed peer group earnings multiples are applied to the trailing twelve months (LTM) stand-alone IFRS earnings of the relevant business. As such, the stand-alone IFRS results and developments driving the IFRS earnings of our portfolio companies are key drivers of their valuations within GCAP's financial statements. See "Basis of Presentation" on page 18 for more background.

 

Discussion of Retail (Pharmacy) Business Results

The retail (pharmacy) business, where GCAP owns a 98.0% equity interest, is the largest pharmaceuticals retailer and wholesaler in Georgia, with a 35.8% market share in the organised retail market based on 2023 revenues. The business consists of a retail pharmacy chain operating under two brands (GPC and Pharmadepot) and a wholesale business that sells pharmaceuticals and medical supplies to hospitals and other pharmacies. The business operates a total of 430 pharmacies (of which 415 are in Georgia and 15 in Armenia) and 19 franchise stores (of which, 12 are in Georgia, 2 in Armenia and 5 in Azerbaijan).

2Q25 and 1H25 performance (GEL '000), Retail (pharmacy)^[26]

INCOME STATEMENT HIGHLIGHTS	2Q25	2Q24	Change	1H25	1H24	Change
Revenue, net	224,007	207,419	8.0%	449,631	411,130	9.4%
of which, retail	173,765	163,307	6.4%	349,116	331,252	5.4%
of which, wholesale	50,242	44,112	13.9%	100,515	79,878	25.8%
Gross Profit	73,313	63,286	15.8%	146,202	123,101	18.8%
Gross profit margin	32.7%	30.5%	2.2 ppts	32.5%	29.9%	2.6 ppts
Operating expenses (ex. IFRS 16)	(48,962)	(43,746)	11.9%	(97,676)	(88,019)	11.0%
EBITDA (excl. IFRS 16)	24,351	19,540	24.6%	48,526	35,082	38.3%
EBITDA margin (ex. IFRS 16)	10.9%	9.4%	1.5 ppts	10.8%	8.5%	2.3 ppts
Net profit (excl. IFRS 16)	14,163	4,444	NMF	30,973	11,194	NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16)	15,527	14,563	6.6%	43,333	34,127	27.0%
EBITDA to cash conversion	63.8%	74.5%	-10.7 ppts	89.3%	97.3%	-8.0 ppts
Cash flow used in investing activities[27]	(6,390)	(19,512)	-67.3%	(10,042)	(24,739)	-59.4%
Free cash flow (ex. IFRS 16)[28]	8,988	8,751	2.7%	32,980	22,074	49.4%
Cash flow used in financing activities (ex. IFRS 16)	(23,068)	(20,486)	12.6%	(20,546)	(45,995)	-55.3%
BALANCE SHEET HIGHLIGHTS	30-Jun-25	31-Mar-25	Change	31-Dec-24	Change
Total assets	641,499	625,578	2.5%	608,576	5.4%
of which, cash and bank deposits	32,341	45,890	-29.5%	19,154	68.8%
of which, securities and loans issued	16,781	18,080	-7.2%	19,087	-12.1%
Total liabilities	531,717	520,400	2.2%	521,341	2.0%
of which, borrowings	178,645	187,768	-4.9%	181,833	-1.8%
of which, lease liabilities	151,896	148,388	2.4%	149,348	1.7%
Total equity	109,782	105,178	4.4%	87,235	25.8%

INCOME STATEMENT HIGHLIGHTS

Ø Y-o-y growth in retail revenues in 2Q25 and 1H25 reflects the business's proactive approach to sales enhancement, resulting in a 6.6% same-store revenue growth in 2Q25 (4.7% in 1H25) and a 10.3% y-o-y increase in average bill size in 2Q25 (up 10.0% y-o-y in 1H25). Retail revenue growth was further supported by the recent expansion of the retail chain (14 new pharmacy stores added in 2Q25).

Ø Y-o-y growth in wholesale revenues in 2Q25 and 1H25 was primarily driven by higher revenue from state healthcare programmes.

Ø Gross profit margin improvement in 2Q25 and 1H25 was underpinned by improved trading terms with key suppliers across all major categories, as well as a shift in the sales mix toward higher-margin non-prescription medicines.

Ø The y-o-y increase in operating expenses (excl. IFRS 16) in 2Q25 and 1H25 was mainly driven by higher salary costs, up 18.4% and 15.5% y-o-y in 2Q25 and 1H25, respectively. This reflects increased staff compensation aligned with market trends, the introduction of new sales incentive schemes aimed at enhancing overall gross profit margin, and the continued growth of the business.

Ø As a result, the business achieved y-o-y EBITDA growth (excl. IFRS 16) of 24.6% in 2Q25 (up 38.3% in 1H25), with an EBITDA margin of 10.9% in 2Q25 (10.8% in 1H25).

Ø Net interest expense (excl. IFRS 16) was down by 37.5% y-o-y in 2Q25 (down 30.8% y-o-y in 1H25), reflecting lower average net debt balance.

Ø The developments described above translated into a GEL 9.7 million y-o-y increase in net profit (excl. IFRS 16) in 2Q25 (up by GEL 19.8 million y-o-y in 1H25).

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø The net debt balance was GEL 129.5 million as of 30-Jun-25, up 4.6% from 31-Mar-25 and down 9.8% from 31-Dec-24, reflecting the net impact of a GEL 10.0 million dividend payment to GCAP in 2Q25 and robust cash flow generation throughout 1H25. As a result, the net debt to EBITDA[29] leverage ratio improved to 1.4x as at 30-Jun-25 (down from 1.5x as at 31-Mar-25 and down from 1.9x as at 31-Dec-24).

Ø The EBITDA to cash conversion stood at 63.8% and 89.3% in 2Q25 and 1H25, respectively, reflecting the strong business performance outlined above, as well as timing differences in the collection of receivables.

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø In 2Q25, the retail pharmacy chain expanded by 14 stores, with openings focused on strategically selected locations. The new stores were developed using cost-efficient formats, requiring limited capital investments. The detailed breakdown of pharmacies and franchise stores is provided below:

	Jun-25	Mar-25	Change (q-o-q)	Jun-24	Change (y-o-y)
Number of pharmacies	430	416	14	418	12
of which, Georgia	415	401	14	402	13
of which, Armenia	15	15	-	16	(1)
Number of franchise stores	19	19	-	22	(3)
of which, Georgia	12	12	-	14	(2)
of which, Armenia	2	2	-	2	-
of which, Azerbaijan	5	5	-	6	(1)

Ø Retail (Pharmacy)'s key operating performance highlights for 2Q25 and 1H25 are noted below:

Key metrics	2Q25	2Q24	Change	1H25	1H24	Change
Same store revenue growth	6.6%	-5.9%	12.4ppts	4.7%	-2.6%	7.3ppts
Number of bills issued (million)	7.5	7.8	-3.7%	15.2	15.9	-4.5%
Average bill size (GEL)	21.8	19.7	10.3%	21.7	19.7	10.0%

 

 

Discussion of insurance (P&C and medical) business results

As at 30-Jun-25, the insurance business comprises a) property and casualty (P&C) insurance business, operating under the brand name "Aldagi" and b) medical insurance business, operating under "Imedi L" and "Ardi" brands, the latter acquired in April 2024. The P&C insurance business is a leading player with a 25% market share in property and casualty insurance based on gross premiums as of 31-Mar-25. P&C also offers a variety of non-property and casualty products, such as life insurance. The medical insurance business is the country's largest private health insurer, with a 33% market share based on gross insurance premiums as of 31-Mar-25, offering a variety of health insurance products primarily to corporate and (selectively) to state entities and to retail clients in Georgia. GCAP owns a 100% equity stake in both insurance businesses.

2Q25 and 1H25 performance (GEL'000), insurance (P&C and medical)^[30]

INCOME STATEMENT HIGHLIGHTS	2Q25	2Q24	Change	1H25	1H24	Change
Insurance revenue	96,960	76,434	26.9%	186,622	131,426	42.0%
of which, P&C insurance	44,161	36,304	21.6%	82,272	67,801	21.3%
of which, medical insurance	52,799	40,130	31.6%	104,350	63,625	64.0%
Net underwriting profit	24,684	19,261	28.2%	44,772	33,480	33.7%
Net investment profit	4,072	4,216	-3.4%	8,269	7,538	9.7%
Pre-tax profit	13,395	11,400	17.5%	22,218	19,170	15.9%
of which, P&C insurance	8,944	7,034	27.2%	16,027	13,337	20.2%
of which, medical insurance	4,451	4,366	1.9%	6,191	5,833	6.1%
CASH FLOW HIGHLIGHTS
Net cash flows from operating activities	18,571	16,154	15.0%	22,163	23,771	-6.8%
Free cash flow	15,125	17,721	-14.6%	15,850	24,020	-34.0 %
BALANCE SHEET HIGHLIGHTS	30-Jun-25	31-Mar-25	Change	31-Dec-24	Change
Total assets	379,438	359,063	5.7%	300,510	26.3%
Total equity	136,747	129,986	5.2%	128,614	6.3%

INCOME STATEMENT HIGHLIGHTS

Ø The y-o-y increase in 2Q25 and 1H25 insurance revenue reflects a combination of factors:

§  The revenue of the P&C insurance business was up by 21.6% y-o-y in 2Q25 (up 21.3% y-o-y in 1H25), resulting from:

o  A GEL 4.3 million y-o-y increase in Motor Insurance revenues in 2Q25 (GEL 8.6 million y-o-y increase in 1H25), mainly attributable to the expansion of the retail client portfolio.

o  A GEL 1.6 million y-o-y increase in Credit Life Insurance revenues in 2Q25 (GEL 3.1 million y-o-y increase in 1H25), driven by the growth of partner banks' portfolios in the mortgage, consumer loan, and other sectors.

o  A GEL 2.0 million y-o-y increase in 2Q25 (GEL 2.8 million y-o-y increase in 1H25) in the revenues from other insurance lines.

§  The revenue of the medical insurance business was up by 31.6% y-o-y in 2Q25 (up 64.0% y-o-y in 1H25), reflecting organic growth of the portfolio, a mid-teen percentage increase in insurance policy prices, and the positive impact of the acquisition of Ardi insurance portfolio in April 2024, the latter contributing GEL 8.7 million y-o-y revenue growth in 2Q25 and GEL 31.1 million in 1H25.

Ø The insurance business' key performance ratios for 2Q25 and 1H25 are noted below:

Key ratios	P&C insurance						Medical insurance
	2Q25	2Q24	Change	1H25	1H24	Change	2Q25	2Q24	Change	1H25	1H24	Change
Combined ratio	84.5%	88.5%	-4.0 ppts	86.0%	87.9%	-1.9 ppts	93.3%	91.1%	2.2 ppts	95.8%	93.3%	2.5 ppts
Expense ratio	32.9%	33.6%	-0.7 ppts	33.1%	33.6%	-0.5 ppts	17.1%	15.8%	1.3 ppts	17.4%	15.9%	1.5 ppts
Loss ratio	50.8%	53.2%	-2.4 ppts	52.9%	53.6%	-0.7 ppts	76.2%	75.3%	0.9 ppts	78.4%	77.4%	1.0 ppts
FX ratio	0.7%	1.7%	-1.0 ppts	0.1%	0.7%	-0.6 ppts	-	-	-	-	-	-
ROAE[31]	36.0%	33.1%	2.9 ppts	32.4%	32.2%	0.2 ppts	50.1%	33.8%	16.3 ppts	35.7%	22.7%	13.0 ppts

Ø The combined ratio of the P&C insurance business improved by 4.0 ppts y-o-y in 2Q25 (1.9 ppts y-o-y improvement in 1H25), primarily driven by an improved loss ratio in the corporate motor insurance segment, reflecting the impact of revised price segmentation initiatives. The performance was partially subdued by an adverse movement in the property insurance loss ratio due to two large claims, totalling GEL 2.0 million in 1H25, of which GEL 1.4 million was recorded in 2Q25.

Ø The 2.2 ppt y-o-y increase in the combined ratio of the medical insurance business in 2Q25 (up 2.5 ppts in 1H25) reflects the low base related to the acquisition of Ardi in April 2024, as the comparative 2024 figures only partially account for Ardi's claims activity. Adjusted for the acquisition impact, the combined ratio of medical insurance was broadly stable, up 1.0 ppt y-o-y in both 2Q25 and 1H25.

Ø Net investment profit was down by 3.4% y-o-y in 2Q25 (up 9.7% y-o-y in 1H25), primarily attributable to the FX movements.

Ø As a result, the pre-tax profit of the insurance business was up 17.5% and 15.9% y-o-y in 2Q25 and 1H25, respectively.

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø The solvency ratio of P&C and medical insurance businesses stood at 170% and 161%, respectively, as of 30-Jun-25, significantly above the required minimum of 100%.

Ø The net debt to EBITDA leverage ratio stood at 0.4x as at 30-Jun-25 (down from 0.5x as at 31-Mar-25).

Ø The business distributed GEL 6.8 million dividends to GCAP in 2Q25 (GEL 13.9 million in 1H25).

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø In July 2025, a leading international credit rating agency upgraded the credit rating of Aldagi to the investment grade level of "bbb- (Stable)" from "bb+ (Positive)", marking the first time a Georgian insurance company has been assigned an international investment-grade credit rating. The rating upgrade reflects AM Best's view that Aldagi is well positioned to maintain resilient balance sheet strength and sustain its strongest level of risk-adjusted capitalisation, underpinned by prudent capital and underwriting management. The detailed rating announcement is available on AM Best's website.

 

 

 

 

 

 

 

 

 

 

Discussion of healthcare services business results^[32]

The healthcare services business, where GCAP owns 100% equity, is the largest healthcare market participant in Georgia comprising two segments: 1) hospitals (7 large and specialty hospitals - providing secondary and tertiary level healthcare services across Georgia and 27 regional and community hospitals - providing outpatient and basic inpatient services), and 2) clinics and diagnostics (16 polyclinics - providing outpatient diagnostic and treatment services and diagnostics - operating the largest laboratory in the entire Caucasus region "Mega Lab").

2Q25 and 1H25 performance (GEL '000), healthcare services[33]

INCOME STATEMENT HIGHLIGHTS	2Q25	2Q24	Change	1H25	1H24	Change
Revenue, net[34]	118,307	100,235	18.0%	233,588	196,908	18.6%
Gross Profit	46,569	36,858	26.3%	92,398	73,390	25.9%
Gross profit margin	38.8%	36.2%	2.6 ppts	39.1%	36.8%	2.3 ppts
Operating expenses (ex. IFRS 16)	(22,901)	(19,508)	17.4%	(45,386)	(40,132)	13.1%
EBITDA (ex. IFRS 16)	23,668	17,350	36.4%	47,012	33,258	41.4%
EBITDA margin (ex. IFRS 16)	19.7%	17.0%	2.7 ppts	19.9%	16.7%	3.2 ppts
Net income/(loss) (ex. IFRS 16)	261	(2,228)	NMF	1,581	(4,469)	NMF
CASH FLOW HIGHLIGHTS
Cash flow from operating activities (ex. IFRS 16)	19,799	6,516	NMF	31,497	13,747	NMF
EBITDA to cash conversion (ex. IFRS 16)	83.7%	37.6%	46.1 ppts	67.0%	41.3%	25.7 ppts
Cash flow (used in)/from investing activities[35]	(16,701)	(14,936)	11.8%	(27,970)	2,554	NMF
Free cash flow (ex. IFRS 16)[36]	2,839	(8,320)	NMF	2,067	16,245	-87.3%
Cash flow (used in)/from financing activities (ex. IFRS 16)	(15,650)	18,011	NMF	(398)	(12,871)	-96.9%
BALANCE SHEET HIGHLIGHTS	30-Jun-25	31-Mar-25	Change	31-Dec-24	Change
Total assets	867,749	864,016	0.4%	828,101	4.8%
of which, cash balance and bank deposits	41,647	54,306	-23.3%	39,102	6.5%
of which, securities and loans issued	498	582	-14.4%	736	-32.3%
Total liabilities	478,406	473,213	1.1%	441,552	8.3%
of which, borrowings	366,637	367,344	-0.2%	341,367	7.4%
Total equity	389,343	390,803	-0.4%	386,549	0.7%

 

INCOME STATEMENT HIGHLIGHTS

Ø The hospitals and clinics and diagnostics businesses represent approximately 80% and 20%, respectively, of the consolidated revenue of the healthcare services business.

Total revenue breakdown[37]	2Q25	2Q24	Change	1H25	1H24	Change
Total revenue, net	118,307	100,235	18.0%	233,588	196,908	18.6%
of which, large and specialty hospitals	65,770	57,637	14.1%	128,054	111,509	14.8%
of which, regional and community hospitals	31,207	25,399	22.9%	63,679	52,643	21.0%
of which, clinics	18,580	15,187	22.3%	36,707	29,273	25.4%
of which, diagnostics	7,071	5,452	29.7%	13,743	10,830	26.9%

Ø The 18.0% y-o-y increase in total revenue in 2Q25 (up 18.6% y-o-y in 1H25) reflects:

§  Increased demand for high revenue-generating outpatient services at our large and specialty hospitals, accounting for 36.9% of the revenue from this group of hospitals, a 3.7 ppts y-o-y increase in 2Q25 (up 3.1 ppts y-o-y to 36.3% in 1H25). This performance also benefited from the onboarding of reputable doctors with loyal patient bases in 1H25.

§  Strong revenue growth at our regional and community hospitals, underpinned by a favourable shift in the sales mix and enhanced operational efficiencies, resulting in a 6.6 ppt and 8.7 ppt y-o-y increase in occupancy rates in 2Q25 and 1H25, respectively.

§  Robust performance of clinics and diagnostics business on the back of the favourable shift in sales mix and increased customer footprint resulting from the overall service enhancements.

Ø In addition to the revenue developments outlined above, a 2.6 and 2.3 ppts y-o-y increase in the gross profit margin in 2Q25 and 1H25, respectively, reflects the following trends in direct salary and materials rates[38] and utility costs:

§  Approximately 50% of direct salaries are fixed. This, on the back of increased revenues, led to a 1.2 ppts y-o-y improvement in the direct salary rate of the healthcare services business to 38.8% in 2Q25 (1.1 ppts y-o-y improvement in 1H25 to 38.3%).

§  The materials rate improved by 0.6 ppts y-o-y in 2Q25 and stood at 15.7% (improved by 0.5 ppts y-o-y to 15.9% in 1H25).

§  The utilities and other expenses increased by 8.6% y-o-y in 2Q25 (up by 9.3% y-o-y in 1H25), mainly attributable to higher facility maintenance costs related to post-renovation works in certain departments and the overall expansion of the business.

Ø Operating expenses (excl. IFRS 16) were up by 17.4% and 13.1% y-o-y in 2Q25 and 1H25, respectively, reflecting increased salary and rent expenses in line with the business expansion.

Ø The developments described above translated into a 36.4% and 41.4% y-o-y increase in EBITDA (excl. IFRS 16) in 2Q25 and 1H25, respectively

Total EBITDA (excl. IFRS 16) breakdown[39]	2Q25	2Q24	Change	1H25	1H24	Change
Total EBITDA	23,668	17,350	36.4%	47,012	33,258	41.4%
of which, large and specialty hospitals	13,533	11,202	20.8%	25,620	20,293	26.3%
of which, regional and community hospitals	5,031	2,521	99.6%	11,062	5,769	91.7%
of which, clinics	3,897	2,910	33.9%	7,851	5,817	35.0%
of which, diagnostics	1,450	717	NMF	2,722	1,379	97.4%

Ø Net interest expense (excluding IFRS 16) was up 27.7% and 27.8% y-o-y in 2Q25 and 1H25, respectively, reflecting increased interest rates on the market as well as increased net debt balance as outlined below.

 

CASH FLOW AND BALANCE SHEET HIGHLIGHTS

Ø The net debt balance was up by 9.0% y-o-y in 2Q25, reflecting capex investments in the amount of GEL 31.5 million in 1H25 (GEL 26.5 million in 1H24). This includes a) development capex of GEL 18.2 million in 1H25 related to an expansion of service offerings and upgrade of medical equipment primarily for outpatient services, and b) maintenance capex of GEL 13.3 million.

Ø The EBITDA to cash conversion ratio improved to 83.7% in 2Q25, while the 1H25 ratio remained at 67.0%, reflecting delays in the collection of receivables from the State, where the typical collection period ranges from three to six months.

Ø The net debt to EBITDA leverage ratio improved to 3.9x as at 30-Jun-25, down from 4.1x as at 31-Mar-25 and down from 4.3x as at 31-Dec-24.

 

OTHER VALUATION DRIVERS AND OPERATING HIGHLIGHTS

Ø The business key operating performance highlights for 2Q25 are noted below:

Key metrics	2Q25	2Q24	Change	1H25	1H24	Change
Hospitals
Number of admissions (thousands):	394.8	381.4	3.5%	794.8	791.2	0.5%
of which, large and specialty hospitals	190.2	176.8	7.6%	378.2	349.1	8.3%
of which, regional and community hospitals	204.6	204.6	NMF	416.6	442.1	-5.8%
Occupancy rates:
of which, large and specialty hospitals	70.5%	69.6%	0.9 ppts	72.1%	67.5%	4.6 ppts
of which, regional and community hospitals	67.7%	61.1%	6.6 ppts	72.2%	63.5%	8.7 ppts
Clinics
Number of admissions (thousands):	484.8	437.4	10.8%	988.2	898.8	9.9%
Diagnostics
Number of patients served (thousands)	214	197	8.7%	444	418	6.2%
Average number of tests per patient	3.3	3.1	6.2%	3.2	3.0	4.8%

 

 

 

Discussion of emerging and other portfolio results

The five businesses in our "emerging and other" private portfolio are renewable energy, education, auto service, wine and real estate (housing development and hospitality). They had a combined value of GEL 556.3 million at 30-Jun-25, which represents 12.2% of our total portfolio.

 

2Q25 and 1H25 aggregated performance highlights (GEL '000), emerging and other portfolio[40]

	2Q25	2Q24	Change	1H25	1H24	Change
Revenue	113,584	114,639	-0.9%	206,615	238,398	-13.3%
EBITDA	25,082	23,798	5.4%	45,537	47,764	-4.7%
Net cash flows from operating activities	22,480	20,584	9.2%	47,385	31,632	49.8%

 

Ø Renewable energy | The renewable energy business operates three wholly-owned commissioned renewable assets with 71MW installed capacity in aggregate. In addition, the business has a pipeline of renewable energy projects in varying stages of development. Revenue of the business increased by 4.8% y-o-y to US$ 5.1 million in 2Q25, primarily driven by a 4.4% y-o-y increase in the average electricity selling price, which reached 55.6 US$/kwh in 2Q25. The 1H25 revenue decreased by 1.0% y-o-y to US$ 7.5 million, mainly reflecting a 2.8% y-o-y decline in the electricity generation due to unfavourable weather conditions. Operating expenses were up by 23.0% and 13.1% y-o-y in 2Q25 and 1H25, respectively, driven by higher electricity export costs. As a result, the business posted US$ 3.7 million and US$ 5.1 million EBITDA in 2Q25 and 1H25, respectively (down 0.9% and 6.3% y-o-y, respectively).

Ø Education | Georgia Capital's education business is the largest player in the private K-12 market in Georgia with 9.4% market share. It currently combines majority stakes in four private school brands operating across seven campuses, which are well-positioned in the international, premium, midscale and affordable market segments. Revenue of the business increased by 19.5% y-o-y to GEL 21.7 million in 2Q25 (up 18.4% y-o-y to GEL 43.4 million in 1H25), primarily driven by a) organic growth through strong intakes and b) expansion of the business through the addition of two new campuses (greenfield and acquisitions) during 2023. Operating expenses were up by 15.4% y-o-y in 2Q25 (up by 15.3% y-o-y in 1H25), mainly reflecting increased salary costs, in line with the business expansion. Consequently, EBITDA amounted to GEL 7.1 million in 2Q25 and GEL 14.3 million in 1H25, up by 28.7% and 25.2% y-o-y, respectively.

Ø Auto service | The auto service business includes a periodic technical inspection (PTI) business, and a car services and parts business.

o  Periodic technical inspection (PTI) business | PTI business' revenue increased by 14.7% y-o-y to GEL 6.1 million in 2Q25 and was up by 5.0% y-o-y to GEL 11.4 million in 1H25. This reflects a 14.8% and 4.2% y-o-y increase in the number of cars serviced during 2Q25 and 1H25, respectively. Consequently, the 2Q25 EBITDA increased by 26.9% y-o-y to GEL 3.2 million (up 4.8% y-o-y to GEL 5.7 million in 1H25).

o  Car services and parts business | Revenue of the business increased by 9.5% y-o-y to GEL 16.7 million in 2Q25 (up 8.0% y-o-y to GEL 29.8 million in 1H25), reflecting an increase in both the retail and wholesale segments. Similarly, the gross profit increased by 21.8% y-o-y to GEL 5.0 million in 2Q25 (up 17.9% y-o-y to GEL 8.7 million in 1H25). Operating expenses remained largely flat, down 0.6% y-o-y in 2Q25 (up 0.6% y-o-y in 1H25). As a result, the business posted a GEL 1.6 million EBITDA in 2Q25 (GEL 2.1 million in 1H25), up 2.4x y-o-y (up 2.5x y-o-y in 1H25).

Ø Wine | In 2Q25, net revenue of the business increased by 60.2% y-o-y to GEL 19.0 million, mainly reflecting a 91.6% y-o-y increase in export sales. 1H25 net revenue was down 2.6% y-o-y to GEL 28.8 million, mainly reflecting a timing difference in exports that had led to an unusually high base in the prior year. This effect is expected to even out over the course of the year, with minimal to no impact on full-year revenues, as reflected in the trajectory of the 2Q25 results. Operating expenses remained largely flat, down 1.3% y-o-y in 2Q25 and up 0.2% y-o-y in 1H25. Consequently, the wine business posted EBITDA of GEL 3.2 million in 2Q25 (up 2.8x y-o-y) and GEL 3.2 million in 1H25 (down 15.3% y-o-y).

Ø Real estate businesses | The combined revenue of the real estate business declined by 28.6% and 35.8% y-o-y to GEL 36.0 million and GEL 72.6 million in 2Q25 and 1H25, respectively, primarily reflecting a lower volume of residential and commercial units sold during the period. The decline was partially offset by the strong operating performance of the hospitality business, which posted a 22.1% y-o-y increase in revenue in 2Q25 (a 23.0% y-o-y increase in 1H25). Operating expenses were down by 14.3% y-o-y in 2Q25 and down by 5.9% y-o-y in 1H25. As a result, the real estate business posted a breakeven EBITDA in 2Q25 (GEL 5.7 million EBITDA in 1H25).

 

 

 

 

 

 

ADDITIONAL FINANCIAL INFORMATION

The 1H25 NAV Statement shows the development of NAV since 31-Dec-24:

GEL '000, unless otherwise noted (Unaudited)	Dec-24	1. Value creation[41]	2a. Investment and Divestments	2b. Buyback	2c. Dividends	3. Operating expenses	4. Liquidity/ FX/Other	Jun-25	Change %
Listed and observable portfolio companies
Lion Finance Group	1,421,035	834,706	-	-	(32,916)	-	-	2,222,825	56.4%
Water utility	188,000	3,744	(191,744)	-	-	-	-	-	NMF
Total listed and observable portfolio value	1,609,035	838,450	(191,744)	-	(32,916)	-	-	2,222,825	38.1%
Listed and observable portfolio value change %		52.1%	-11.9%	0.0%	-2.0%	0.0%	0.0%	38.1%
Private portfolio companies
Large portfolio companies	1,557,951	227,126	-	-	(23,816)	-	1,873	1,763,134	13.2%
Retail (pharmacy)	716,130	108,285	-	-	(9,960)	-	1,126	815,581	13.9%
Insurance (P&C and medical)	427,945	49,373	-	-	(13,856)	-	207	463,669	8.3%
Healthcare services	413,876	69,468	-	-	-	-	540	483,884	16.9%
Emerging and other companies	594,504	(51,216)	12,692	-	(973)	-	1,286	556,293	-6.4%
Total private portfolio value	2,152,455	175,910	12,692	-	(24,789)	-	3,159	2,319,427	7.8%
Private portfolio value change %		8.2%	0.6%	0.0%	-1.2%	0.0%	0.1%	7.8%
Total portfolio value (1)	3,761,490	1,014,360	(179,052)	-	(57,705)	-	3,159	4,542,252	20.8%
Total portfolio value change %		27.0%	-4.8%	0.0%	-1.5%	0.0%	0.1%	20.8%
Net debt (2)	(154,425)	-	179,052	(143,229)	57,705	(11,340)	(4,640)	(76,877)	-50.2%
of which, cash and liquid funds	278,237	-	(12,692)	(143,229)	57,705	(11,340)	(17,933)	150,748	-45.8%
of which, loans issued	-	-	-	-	-	-	513	513	NMF
of which, receivable on put option exercise	-	-	191,744	-	-	-	-	191,744	NMF
of which, gross debt	(432,662)	-	-	-	-	-	12,780	(419,882)	-3.0%
Net other assets/(liabilities) (3)	1,948	-	-	(616)	-	(7,640)	4,144	(2,164)	NMF
of which, share-based comp.	-	-	-	-	-	(7,640)	7,640	-	NMF
Net asset value (1)+(2)+(3)	3,609,013	1,014,360	-	(143,845)	-	(18,980)	2,663	4,463,211	23.7%
NAV change %		28.1%	0.0%	-4.0%	0.0%	-0.5%	0.1%	23.7%
Shares outstanding41	37,612,488	-	-	(2,776,848)	-	-	690,160	35,525,800	-5.5%
Net asset value per share, GEL	95.95	26.97	0.00	3.52	0.00	(0.50)	(0.32)	125.63	30.9%
NAV per share, GEL change %		28.1%	0.0%	3.7%	0.0%	-0.5%	-0.3%	30.9%

 

 

RECONCILIATION OF ADJUSTED INCOME STATEMENT TO IFRS INCOME STATEMENT

 

The table below reconciles the adjusted income statement to the IFRS income statement. Adjustments to reconcile adjusted income statement with IFRS income statement mainly relate to eliminations of income, expense and certain equity movement items recognised at JSC Georgia Capital, which are subsumed within gross investment income/(loss) in IFRS income statement of Georgia Capital PLC.

	2Q25, unaudited			1H25, unaudited
GEL '000, unless otherwise noted (Unaudited)	Adjusted IFRS income statement	Adjustment	IFRS income statement	Adjusted IFRS income statement	Adjustment	IFRS income statement
Dividend income	49,697	(49,697)	-	57,705	(20,146)	37,559
Interest income	1,847	(1,833)	14	4,637	(4,597)	40
Realised/unrealised gain on liquid funds	23	(23)	-	73	(73)	-
Interest expense	(8,922)	8,922	-	(18,026)	18,026	-
Gross operating income	42,645	(42,631)	14	44,389	(6,790)	37,599
Operating expenses (administrative, salaries and other employee benefits)	(9,195)	9,195	-	(18,979)	18,979	-
GCAP net operating income	33,450	(33,436)	14	25,410	12,189	37,599
Total investment return/gain on investments at fair value	621,169	43,014	664,183	956,655	(790)	955,865
Administrative expenses, salaries and other employee benefits	-	(1,570)	(1,570)	-	(3,438)	(3,438)
Income before foreign exchange movements and non-recurring expenses	654,619	8,008	662,627	982,065	7,961	990,026
Net foreign currency gain/(loss)	4,418	(5,531)	(1,113)	11,431	(9,805)	1,626
Non-recurring expenses	(4,491)	4,491	-	(4,749)	4,749	-
Net income	654,546	6,968	661,514	988,747	2,905	991,652

 

Basis of presentation

This announcement contains unaudited financial results presented in accordance with UK-adopted international accounting standards ("IFRS"). The financial results are unaudited and derived from management accounts.

Under IFRS 10, Georgia Capital PLC meets the "investment entity" definition. For more details about the basis of preparation please refer to page 94 in Georgia Capital PLC 2024 Annual report.

The presentation of the Income Statement (Adjusted) and some of the information under the NAV Statement should be considered to be Alternative Performance Measures (APM).

 

GLOSSARY

1.     APM - Alternative Performance Measure.

2.     GCAP refers to the aggregation of stand-alone Georgia Capital PLC and stand-alone JSC Georgia Capital accounts.

3.     Georgia Capital and "the Group" refer to Georgia Capital PLC and its portfolio companies as a whole.

4.     NMF - Not meaningful.

5.     NAV - Net Asset Value, represents the net value of an entity and is calculated as the total value of the entity's assets minus the total value of its liabilities.

6.     LTM - last twelve months.

7.     EBITDA - Earnings before interest, taxes, non-recurring items, FX gain/losses and depreciation and amortisation; The Group has presented these figures in this document because management uses EBITDA as a tool to measure the Group's operational performance and the profitability of its operations. The Group considers EBITDA to be an important indicator of its representative recurring operations.

8.     ROIC - return on invested capital is calculated as EBITDA less depreciation, divided by the aggregate amount of total equity and borrowed funds.

9.     Loss ratio equals net insurance claims expense divided by net earned premiums.

10.  Expense ratio in P&C Insurance equals sum of acquisition costs and operating expenses divided by net earned premiums.

11.  Combined ratio equals sum of the loss ratio and the expense ratio in the insurance business.

12.  ROAE - Return on average total equity (ROAE) equals profit for the period attributable to shareholders divided by monthly average equity attributable to shareholders of the business for the same period.

13.  Net investment - gross investments less capital returns (dividends and sell-downs).

14.  EV - enterprise value.

15.  Liquid assets & loans issued include cash, marketable debt securities and issued short-term loans at GCAP level.

16.  Total return/value creation - total return/value creation of each portfolio investment is calculated as follows: we aggregate a) change in beginning and ending fair values, b) gains from realised sales (if any) and c) dividend income during period. We then adjust the net result to remove capital injections (if any) to arrive at the total value creation/investment return.

17.  WPP - Wind power plant.

18.  HPP - Hydro power plant.

19.  PPA - Power purchase agreement.

20.  Number of shares outstanding - Number of shares in issue less total unawarded shares in JSC GCAP's management trust.

21.  Market Value Leverage ("MVL"), also Loan to Value ("LTV") - Interchangeably used across the document and is calculated by dividing net debt to the total portfolio value.

22.  NCC - Net Capital Commitment, represents an aggregated view of all confirmed, agreed and expected capital outflows at both Georgia Capital PLC and JSC Georgia Capital levels.

23.  NCC Ratio - Equals Net Capital Commitment divided by portfolio value.

 

 

 

 

Principal risks and uncertainties

Understanding our risks

We continuously monitor our internal and external environment to ensure that any new principal or emerging risk is identified in a timely manner and responded to appropriately. The Directors have carried out a robust assessment of the principal and emerging risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. We define our principal risks as those that have the potential to impact the delivery of our strategic objectives materially. We also monitor risks which include new and emerging risks which may have the potential to become principal risks but are not yet considered to be so. Emerging risks usually have large uncertain outcomes which may become certain in the longer term (beyond one year) and which could have a material effect on the business strategy if they were to occur.

Principal risks and uncertainties

The table below describes the principal risks and uncertainties faced by the Group and their potential impact, as well as the trends and outlook associated with these risks and the mitigating actions we take to address these risks. If any of the following risks were to occur, the Group's business, financial condition, results of operations or prospects could be materially affected. The risks and uncertainties described below may not be the only ones the Group faces. The order in which the principal risks and uncertainties appear does not denote their order of priority. Additional risks and uncertainties, including those that the Group is currently not aware of or deems immaterial, may also result in decreased revenues, incurred expenses or other events that could result in a decline in the value of the Group's securities.

REGIONAL INSTABILITY RISK
PRINCIPAL RISK / UNCERTAINTY	The Georgian economy and our business may be adversely affected by regional tensions. Georgia shares borders with Russia, Azerbaijan, Armenia and the Republic of Türkiye, and has two breakaway territories, Abkhazia and the Tskhinvali/South Ossetia regions. Georgia is also located in close proximity to other regional conflicts. In addition to strong political and geographic influences, regional countries are highly linked to the Georgian economy, representing its significant historical trading partners.   Russian troops invaded Ukraine on 24 February 2022, escalating the situation into a full-scale war. The ongoing conflict has caused severe humanitarian and economic costs for Ukraine, Russia and the global economy. Casualties persist as the war's duration and outcome remain uncertain. As time progresses, the conflict's adverse effects may intensify, further eroding market confidence and impacting the region. Georgia itself has a fraught history with Russia, including a brief war in 2008, which resulted in Russia taking control of two breakaway territories.   There has also been ongoing geopolitical tension, political and economic instability and military conflict between other regional countries. For example, Armenia and Azerbaijan have been in on/off conflict since 2020, with an escalation in late 2023 resulting in approximately 110,000 ethnic Armenians fleeing Azerbaijan to Armenia. Although negotiations toward a comprehensive peace treaty between the two countries continue, with recent talks showing cautious optimism, tensions remain. These developments have implications for Georgia, which shares borders with both Armenia and Azerbaijan.   On 7 October 2023, Hamas launched a surprise assault on Israeli territory, prompting Israel to declare a state of war and initiate a large-scale ground invasion of the Gaza Strip. The conflict remains unresolved, with a high risk of broader regional escalation. Tensions reached a peak in June 2025 following Israeli strikes on Iranian nuclear and energy facilities, which were met with retaliatory missile attacks from Iran and subsequent involvement by the United States. A fragile ceasefire was established on June 24, bringing an end to 12 days of hostilities. This escalation poses a significant threat to regional stability and global markets, particularly due to the potential disruption of the Strait of Hormuz - a critical chokepoint for global oil trade. Given Georgia's geographic proximity to the Middle East, any further escalation of the conflict, alongside the ongoing situation in Gaza, could have adverse implications for the Group.   The regional instability described above poses potential risks to Georgia's economic and political environment, potentially affecting trade routes, investment flows and overall regional security. Georgia's strategic location as a transit hub underscores the importance of stability in neighbouring countries for its own economic and security interests.   Domestically, political polarisation has deepened. In May 2024, the ruling Georgian Dream party passed a contentious "foreign agents" law, prompting mass protests and strong international criticism. Despite this, the party secured 54% of the vote in the October 2024 elections. Protests escalated in November following the government's decision to suspend EU accession efforts until 2028, triggering the EU to revoke visa-free travel for Georgian officials and prompting targeted sanctions from the US, UK, and Baltic states.   In December 2024, the US sanctioned Georgian Dream founder Bidzina Ivanishvili, citing efforts to undermine Georgia's Euro-Atlantic path. The government's increasingly authoritarian stance and suppression of opposition voices have drawn further scrutiny. By August 2025, demonstrations had continued for over 200 days, with the EU warning that broader visa liberalisation for Georgian citizens could be at risk unless key democratic reforms are enacted. Meanwhile, the US MEGOBARI Act, proposing wider sanctions, awaits Senate approval.   Prolonged unrest, democratic backsliding, or regional conflict escalation may undermine macroeconomic stability, deter investment, and negatively affect our portfolio and operations.
KEY DRIVERS / TRENDS	The Russian invasion of Ukraine has led to profound economic disruption, marked by a sharp decline in market confidence, the imposition of unprecedented sanctions on the Russian economy, and heightened spillover risks. As the situation remains uncertain, further economic repercussions are expected. Ongoing peace negotiations involving the United States and countries in Europe have not yet resulted in tangible progress, and the war continues unabated. These developments have introduced new uncertainties into global markets, with potential implications for economic stability and international relations.   The September 2023 Azerbaijan offensive in the Nagorno-Karabakh region, and the subsequent dissolution of the breakaway Nagorno-Karabakh republic, has significantly altered the geopolitical status quo in the Caucasus. While Russian peacekeeping forces remain in Armenia, its influence on both countries appears to have weakened at least for now. Armenia and Azerbaijan continue to negotiate but have yet to reach a mutually acceptable peace agreement, despite ongoing negotiations, with among others Türkiye, the EU and Iran seeking to have an influence.   Long-term geopolitical implications of the Israel-Hamas war for the wider region remain highly uncertain. While Georgia's economic exposure to Israel on a macro level is not particularly large, Israel is an important source of remittances and tourism revenues. In 1H25, remittances from Israel made up US$ 135 million (7.8% of the total) and tourism receipts equalled US$ 242 million (12.3% of the total).   Russia imposed economic sanctions on Georgia in 2006, and conflict between the countries escalated in 2008 when Russian forces crossed Georgian borders and recognised the independence of Abkhazia and the Tskhinvali/South Ossetia regions. Russian troops continue to occupy the regions, and tensions between Russia and Georgia persist.   Despite the regional and domestic factors as described above, Georgia's economy demonstrated robust growth. Following a 9.4% expansion in 2024, the Georgian economy sustained its growth momentum with preliminary growth of 8.3% y-o-y in 1H25. Foreign exchange inflows maintained their positive trend, while loan growth contributed to economic stability. The GEL experienced fluctuations in 2024 due to domestic political tensions and election-related uncertainties. The Georgian Lari depreciated as negative sentiment increased demand for hard currency. In response, the NBG actively intervened in the foreign exchange market to manage expectations. While it was a net buyer of US$ 287 million from January to April, it became a net seller, offloading US$ 874 million between May and October. Overall, the GEL depreciated by 4.2% y-o-y in 2024, despite strong economic fundamentals and solid FX inflows. However, in 2025, the GEL began to appreciate, strengthening by 4.1% year to date as of 5 August 2025, primarily driven by a weaker dollar stance globally and increasing FX inflows. The NBG re-entered the FX market in March 2025, purchasing US$ 879.5 million between March and June to bolster its foreign exchange reserves.
MITIGATION	The Group actively monitors significant developments in the region and risks related to political instability and the Georgian Government's response thereto. It also develops responsive strategies and action plans of its own. The Georgian export market shifted away from the Russian market after Russia's 2006 embargo, and the Group participated in that shift. In 2024, Russia accounted for 10.4% of Georgian exports, as opposed to 17.8% in 2005.   Since the beginning of the Russia-Ukraine war, the migration effect from Russia, Ukraine and Belarus has altered the composition of foreign currency inflows from remittances and international visitors. The migration effect has resulted in an 86% y-o-y increase in remittance inflows in 2022, including a fivefold increase of up to US$ 2.1 billion from Russia. Remittances had started to decline from May 2023 and continued the decreasing trend falling by 19% y-o-y in 2024, reflecting a 65% y-o-y decline from Russia. With remittances from Russia returning to pre-war levels, inflows from other countries have continued to rise, contributing to a 3.5% y-o-y increase in total remittances in 1H25. Moreover, while international travel receipts increased substantially from the three countries directly after the start of the war, tourism revenues from those countries have been declining since 1H23 on the back of the fading impact of war-related migration. In 2024, tourism revenues from the rest of the world were the driving factor behind a 7.3% y-o-y growth in travel receipts. In contrast, receipts from Russia, Ukraine and Belarus fell by 9%, 19% and 6% y-o-y in 2024, respectively. Tourism revenues increased moderately by 3.8% to US$ 2.0 billion in 1H25. Particularly notable was a 38% y-o-y increase in revenues from Israel, while receipts from the EU rose by 12.5%. Whilst elevated foreign currency inflows have effectively constituted rising external demand in the short run, the medium to long-term effects remain highly uncertain, depending on the timing and terms of the eventual conclusion of the war in Ukraine. Despite this surge in foreign currency inflows predominantly from Russia, both remittance inflows and tourism receipts remain diversified.   Merchandise exports also remain diversified, although CIS share in export surged after Russia's invasion of Ukraine, as the "middle corridor" gained importance. Kyrgyzstan and Kazakhstan became the top destination countries for Georgian exports in 2024 -2025, accounting for 21% and 13% of total exports in 1H25, respectively (1.7% and 4.3% in 2022), followed by Azerbaijan with 11% and Russia with 10% (12.1% and 11.5% in 2022, respectively). Russia was the largest destination country for domestically produced Georgian exports with a 21% share in 1H25 (22% in 2024), followed by China with 11% (9% in 2024).   While financial market turbulence and geopolitical tensions affect regional trading partners, Georgia's preferential trading regimes, including DCFTA with the EU and FTA with China, support the country's resilience against regional external shocks. In December 2023, the European Council granted Georgia the status of a candidate country. Even though Georgia's EU integration is on hold, core institutional agreements such as the DCFTA continue to function.   The 2024 European Commission Enlargement Report on Georgia highlights significant challenges in the country's progress toward EU membership, particularly regarding democratic reforms and rule of law. The Report notes that the granting of candidate status to Georgia has not been followed by sufficient political commitment of the authorities to implement the necessary reforms for the country's progress on the EU path. As a consequence, Georgia's accession process has de facto been halted.   While Georgia has strengthened its ties with the EU over the past decade, the recent developments have severely impacted its trajectory. The adoption of the controversial "transparency of foreign influence" law, strongly opposed by Western nations, and the decision to halt EU accession talks until 2028 have strained Georgia's relationship with the EU.
CURRENCY AND MACROECONOMIC ENVIRONMENT RISKS
PRINCIPAL RISK / UNCERTAINTY	Unfavourable dynamics of major macroeconomic variables, including the depreciation of the Georgian Lari against the US Dollar, may have a material impact on the Group's performance.   On the macro level, the country's free-floating exchange rate works well as a shock absorber, but on the micro level, currency fluctuations have affected and may continue to adversely affect the Group's results. There is a risk that the Group incurs material losses or loses material amounts of revenue and, consequently, deteriorates its solvency in a specific currency or group of currencies due to the fluctuation of exchange rates. The risk is mainly caused by significant open foreign currency positions in the balance sheets of the Group and the portfolio companies.
KEY DRIVERS / TRENDS	The Group's operations are primarily located in, and most of its revenue is sourced from Georgia. Factors such as GDP, inflation, interest and currency exchange rates, as well as unemployment, personal income, tourist numbers and the financial situation of companies, can have a material impact on customer demand for its products and services.   The Lari floats freely against major currencies. In 2024, the GEL depreciated against the US Dollar and other major currencies, particularly around mid-year and year-end, largely due to heightened uncertainty surrounding domestic policies and the election period. Currency market has become volatile since May 2024, as introduction of the "transparency of foreign influence" law increased uncertainty and led to street protests. The GEL experienced another wave of sell-off during October (particularly around the parliamentary election on 26 October), when NBG sold the record high US$ 591 million in one month to curb negative expectations. Overall, the GEL depreciated by 4.2% y-o-y in 2024 on the back of increasing country risk premium and surging negative expectations. However, in 2025, the Georgian Lari reversed its previous trend and appreciated, gaining 4.1% year to date as of 5 August. This strengthening was primarily supported by a weaker global US Dollar and increased foreign exchange inflows. Looking at the trading partners' currencies and overall GEL position, the Real Effective Exchange Rate (REER) depreciated by 1.6% y-o-y, while the nominal effective exchange rate (NEER) appreciated by 3.6% y-o-y in June 2025.   NBG raised the monetary policy rate by 300 bps during March 2021-April 2022 to 11%, responding to high inflation, subsequent rising inflationary expectations and increased uncertainty. Inflation remained below the 3% target for two consecutive years, averaging 1.1% in 2024. However, price pressures re-emerged in 2025, pushing inflation above the target. In July 2025, headline inflation reached 4.3%, marking the fifth consecutive month above the target, mainly due to rising food prices. Considering the strong disinflation, as well as favourable macro dynamics the NBG began a gradual exit from tight monetary policy, cutting the policy rate by a cumulative 150 bps in 2023 and another 150 bps in the first five months of 2024, bringing it to 8.0%. Since May 2024, the NBG has kept the policy rate steady at 8.0%, with a commitment to adjust it based on macroeconomic developments.   According to the latest projections from the Ministry of Finance, public debt is expected to decrease to 35.5% of GDP in 2025, while the fiscal deficit will remain steady at 2.5% of GDP, in line with fiscal rule bounds.   Real GDP continued its strong performance in 2024, growing by 9.4% y-o-y, despite increased uncertainty. Georgia has been among the top performers in the world according to the IMF and the World Bank. The real economy remains strong in Georgia with preliminary growth at 8.3% y-o-y in 1H25, due to strong services sector performance.   The current account deficit widened to 8.5% of GDP in 1Q25, compared to 4.4% of GDP in 1Q24, mainly driven by a 10% y-o-y increase in goods imports and a rise in the negative balance of the primary income account, while export of services has an increasing trend. Total FDI for 2024 stood at US$ 1.3 billion (4% of GDP), marking a 30% y-o-y decline following record highs in 2022 and 2023 (US$ 2.3 billion and US$ 1.9 billion, respectively). In 2025, FDI continues weakening, decreasing by 7.7% y-o-y to US$ 179 million in 1Q25.   Due to the recent political developments and the introduction of the "transparency of foreign influence" law, Fitch downgraded the outlook from positive to stable in June 2024, followed by a further revision to Negative in December 2024. In May 2025, Fitch affirmed Georgia's rating at 'BB' with a negative outlook, pointing to elevated political risks.
MITIGATION	The Georgian economy remains vulnerable to external shocks due to a mix of its historically high current account deficit, low domestic savings rate and high level of dollarisation. As noted above, the current account deficit widened significantly in 1Q25, on the back of increasing goods import. In March 2025, NBG re-entered the FX market, purchasing US$ 879.5 million between March and June to replenish its foreign exchange reserves. This brought official reserve assets to US$ 4.7 billion by the end of June 2025, reflecting partial recovery following the reserve drawdown in 2024, when the NBG sold reserves to support the Georgian Lari.   The Group continually monitors market conditions, reviews market changes and performs stress and scenario testing to test its position under adverse economic conditions, including adverse currency movements.   The currency risk management process is an integral part of the Group's activities; currency risk is managed through regular and frequent monitoring of the Group's currency positions and through the timely and efficient elaboration of responsive actions and measures. Senior management reviews the overall currency positions of the Group several times during the year and elaborates on respective overall currency strategies; the Finance department monitors the daily currency position for Georgia Capital HoldCo, weekly currency positions on a portfolio company level, manages short-term liquidity of the Group across different currencies and engages in currency risk mitigation agreements, such as currency hedges, forwards and swaps. Control procedures involve regular monitoring and control of the currency gap and currency positions, running currency sensitivity tests and elaborating response actions/steps based on the results of the tests.
REGULATORY AND LEGAL RISKS
PRINCIPAL RISK / UNCERTAINTY	The Group owns businesses operating across a wide range of industries: banking, healthcare, retail (pharmacy) and distribution, property and casualty insurance, medical insurance, hydro and wind power, education, beverages, real estate and auto service. Many of these industries are highly regulated. The regulatory environment continues to evolve, and we cannot predict what additional regulatory changes will be introduced in the future or the impact they may have on our operations.   Georgia Capital and its businesses may also be adversely affected by risks related to litigations arising from time to time in the ordinary course of business.
KEY DRIVERS / TRENDS	Each of our businesses is subject to different regulators and regulations. Legislation in certain industries, such as banking, healthcare, energy and insurance is continuously evolving. Different changes, including but not limited to governmental funding, licensing and accreditation requirements, may adversely affect our businesses.   Regulatory developments in recent years have been particularly hard to anticipate in the healthcare sphere, where Georgia switched to a universal healthcare model in 2013 and a series of changes to the model since it was introduced have negatively affected our hospitals and, more recently, our retail (pharmacy) business. While we expect that the multi-year regulatory reset in healthcare is now coming to a close, there is no assurance that further regulatory changes in healthcare or other sectors will not adversely affect us.   Except for the three cases listed below, there were no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which GCAP is aware) during the 12 months preceding the date of this document which may have, or have had in the recent past, significant effects on either GCAP and/or its portfolio companies' financial position or profitability.   Imedi L litigation As at 30 June 2025, several portfolio companies (hospitals, clinics and P&C insurance, together the "Defendants") were engaged in litigation with the former shareholders of Insurance Company Imedi L who allege that they sold their 66% shares in Imedi L to the Defendants under duress at a price below market value in 2012. Since the outset, the Defendants have vigorously defended their position that the claims are wholly without merit. The initial judgment of the First Instance Court which was in favour of the Defendants was later overruled and, upon reconsideration, the First Instance Court partially satisfied the claim and ruled that US$ 12.7 million principal amount plus an annual 5% interest charge as lost income (c.US$ 21 million in total) should be paid by the Defendants. The Defendants appealed the decision of the First Instance Court. On 12 June 2025, the Appellate Court ruled in favour of the claimants and upheld their claim, ordering the Defendants to pay a principal amount of US$ 12.7 million plus annual interest of 5% as compensation for lost income (approximately US$ 21 million in total). On 29 July 2025, the Defendants appealed the decision of the Appellate Court to the Supreme Court.   The Defendants continue to believe that their position is legally correct. While the decision of the Appellate Court is a setback and increases the risk, defendants will continue to vigorously defend their position at the Supreme Court.   BGA Litigation As at 30 June 2025, Georgia Education Group, LLC ("GEG") was involved in litigation with the minority partner of the British Georgian Academy, LLC ("BGA"). The minority partner initially was claiming the annulment of the memorandum of understanding ("MoU") under which Georgia Capital acquired a 70% shareholding in BGA in 2019, alleging GEG's failure to invest in the development of BGA. However, the minority partner later withdrew the lawsuit and submitted a new claim to the court, seeking GEL 0.3 million in damages, once again alleging that GEG failed to invest in BGA's development. On 6 February 2025, the minority partner filed an amended claim with the court, seeking damages in the amount of US$ 15.5 million, termination of the MoU, and the consequent return of 70% of BGA's stake in the minority partner's ownership.   GEG's assessment of the claim is that the claimant's allegations are based on false factual grounds and are without any legal merit. In particular, GEG's position is that it is the minority partner who failed to honour investment commitments under the MoU. Management shares GEG's assessment of the merits of the case and considers that the probability of incurring losses on this claim is low. The case is currently pending before the court of first instance, and the date of the preliminary hearing has not been set yet. Retail (Pharmacy) litigation In December 2023, the Georgian National Competition Agency (the "Agency") imposed fines on four companies in the Georgian pharmaceutical retailers' sector, including GCAP's retail (pharmacy) business, for alleged anti-competitive actions related to price quotations on certain prescription medicines funded under the state programme. The penalty amount assessed by the Agency on our retail (pharmacy) business is GEL 20 million derived by utilising the single rate across all the alleged participants. The retail (pharmacy) business has appealed the Agency's decision in court and plans to vigorously defend its position. No date of hearing has been set yet.
MITIGATION	Continued investment in our people and processes enables us to meet our current regulatory requirements and means that we are well-placed to respond to any future changes in regulation. Further, our investment portfolio is well diversified, limiting exposure to particular industry-specific regulatory risks.   In line with our integrated control framework, we carefully evaluate the impact of legislative and regulatory changes as part of our formal risk identification and assessment processes and, to the extent possible, proactively participate in the drafting of relevant legislation. As part of this process, we engage where possible in constructive dialogue with regulatory bodies and seek external advice on potential changes to legislation. We then develop appropriate policies, procedures and controls as required to fulfil our compliance obligations. Our compliance framework, at all levels, is subject to regular review by Internal Audit and external assurance providers.   Our integrated control framework also ensures the application and development of mechanisms for identifying legal risks in the Group's activities in a timely manner, the monitoring and investigation of the Group's activities in order to identify any legal risks, the planning and implementation of all necessary actions for the elimination of identified legal risks, participation in legal proceedings on behalf of the Group where necessary and the investigation of possibilities for increasing the effectiveness of the Group's legal documentation and its implementation in the Group's daily activities. The framework also considers the engagement of external legal advisors, when appropriate.
INVESTMENT RISK
PRINCIPAL RISK / UNCERTAINTY	The Group may be adversely affected by risks in respect of specific investment decisions. The Group will generally seek to monetise its investments, primarily through strategic sales, typically within five to ten years of acquisition, and faces both market and execution risks in realising exits at acceptable valuations.
KEY DRIVERS / TRENDS	An inappropriate investment decision might lead to poor performance. Investment risks may arise from inadequate research and due diligence of new acquisitions and bad timing of the execution of both acquisition and divestment decisions. The valuation of investments can be volatile in line with market developments.   Macroeconomic conditions, the financial and economic environment and other market conditions in international capital markets may limit the Group's ability to achieve a partial or full exit from its existing or future businesses at reasonable prices. It may not be possible or desirable to divest, including because suitable buyers cannot be found at the appropriate times, or because of difficulties in obtaining favourable terms or prices, or because the Group has failed to act at the appropriate time.
MITIGATION	The Group manages investment risk with established procedures and a thorough evaluation of target acquisitions. Investment opportunities are subject to rigorous appraisal and a multi-stage approval process. Target entry and exit event prices are monitored and updated regularly in relation to market conditions and strategic aims. The Group performs due diligence on each target acquisition including on financial and legal matters. Subject to an evaluation of the due diligence results an acceptable price and funding structure is determined, and the pricing, funding and future integration plan is presented to the Board for approval. The Board reviews and approves or rejects proposals for development, acquisition and sale of investments and decides on all major new business initiatives, especially those requiring a significant capital allocation. The Board focuses on both investment strategy and exit processes, while also actively managing exit strategies in light of the prevailing market conditions.   Our acquisition history has also been successful, and we have been able to integrate businesses due to our strong management with integration experience. In 2022, GCAP completed the water utility business disposal, which represents our most significant monetisation event to date and marks the completion of the full investment cycle as set out on page 12 of the Group's 2022 Annual Report. In 2024, as part of our continued strategic execution, we divested from our beer and distribution business, which was sold to a strategic international investor. Details of this transaction are provided on page 8 of GCAP's 2024 Annual Report. In June 2025, Georgia Capital exercised its option to put a 20% stake in the water utility business, as explained on page 2 of this Report.
LIQUIDITY RISK
PRINCIPAL RISK / UNCERTAINTY	Risk that liabilities cannot be met, or new investments made, due to a lack of liquidity. Such risk can arise from not being able to sell an investment due to lack of demand from the market, from suspension of dividends from portfolio companies, from not holding cash or being able to raise debt.
KEY DRIVERS / TRENDS	The Group predominantly invests in private portfolio businesses, potentially making the investments difficult to monetise at any given point in time. There is a risk that the Group will not be able to meet its financial obligations and liabilities on time due to a lack of cash or liquid assets or the inability to generate sufficient liquidity to meet payment obligations. This may be caused by numerous factors, such as the inability to refinance long-term liabilities; suspended dividend inflows from the investment entity subsidiaries; excessive investments in long-term assets and a resulting mismatch in the availability of funding to meet liabilities; or failure to comply with the creditor covenants causing a default.
MITIGATION	The liquidity management process is a regular process, where the framework is approved by the Board and is monitored by senior management and the Chief Financial Officer. The framework models the ability of the Group to fund under both normal conditions (Base Case) and during stressed situations. This approach is designed to ensure that the funding framework is sufficiently flexible to ensure liquidity under a wide range of market conditions. The Finance department monitors certain liquidity measures on a daily basis and actively analyses and manages liquidity weekly. Senior management is involved at least once a month and the Board on a quarterly basis. Such monitoring involves a review of the composition of the cash buffer, potential cash outflows and management's readiness to meet such commitments. It also serves as a tool to revisit the portfolio composition and take necessary measures, if required.   Since the adoption of the capital management framework and introduction of the NCC navigation tool in May 2022, the Group's primary emphasis has centred around deleveraging. This strategic approach has resulted in a significant reduction in the Group's liquidity risk.   In August 2023, JSC Georgia Capital successfully issued a US$ 150 million sustainability-linked bond (SLB). The proceeds from the transaction, together with existing liquid funds of GCAP, were utilised to fully redeem the US$ 300 million Eurobond. Following the cancellation and repayment of the outstanding Eurobond, GCAP's gross debt balance has been reduced from US$ 300 million to US$ 150 million over the last two years, significantly improving its leverage profile.   Overall, since the introduction of the NCC concept in 1Q22, the NCC ratio has decreased significantly, from 28.2% at 31 March 2022 to 7.0% at 30 June 2025. The Group aims to maintain the NCC ratio below 10%. The deleveraging strategy was also implemented across our private portfolio companies, where individual leverage targets have been developed.   In October 2023, S&P updated GCAP's issuer credit rating from "B+" to "BB-/Stable".   In the recent period, our portfolio companies made significant progress in enhancing their overall financial position. Leverage profiles improved across the business due to the extension of debt maturities in most private portfolio companies, demonstrating management's effective liquidity management measures.   That said, the Group has a strong track record in accessing both bank finance and the public capital markets and believes that the progress on its leverage position has improved that access.
PORTFOLIO COMPANY STRATEGIC AND EXECUTION RISKS
PRINCIPAL RISK / UNCERTAINTY	Market conditions may adversely impact our strategy and all our businesses have their own risks specific to their industry. Our businesses have growth and expansion strategies and we face execution risk in implementing these strategies.
KEY DRIVERS / TRENDS	Each of our portfolio companies face its own risks. These include risks inherent to their industry, or to their industry particularly in Georgia, and each faces significant competition. They also face the principal risks and uncertainties referred to in this table.
MITIGATION	For each business, we focus on building a strong management team and have successfully been able to do so thus far. Management succession planning is regularly on the agenda for the Nomination Committee which reports to the Board on this matter. The Board closely monitors the implementation of strategy, financial and operational performance, risk management and internal control framework, and corporate governance of our businesses. We hold management accountable for meeting targets.   For each industry in which we operate, we closely monitor industry trends, market conditions and the regulatory environment. We have also sought, and continue to seek, advice from professionals with global experience in relevant industries. We carry our private portfolio companies at fair value in our NAV Statement. The valuations are audited, increasing the credibility of fair valuation and limiting the risk of mispricing the asset. In addition, the valuation of retail (pharmacy), insurance, healthcare services, renewable energy and education businesses (47.7% of total portfolio value) is performed by an independent valuation company on a semi-annual basis.

 

 

 

 

Statement of Directors' Responsibilities

 

 

We, the Directors, confirm that to the best of our knowledge:

 

§ The unaudited interim condensed financial statements have been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting", as adopted by the United Kingdom and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;

§ This Results Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

§ This Results Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related parties' transactions and changes therein)

 

After making enquiries, the Directors considered it appropriate to adopt the going concern basis in preparing this Results Report.

 

The Directors of the Group are as follows:

Irakli Gilauri

David Morrison

Massimo Gesua' sive Salvadori

Maria Chatti-Gautier

Neil Janin

 

By order of the Board

 

Irakli Gilauri                                                                                         

Chairman & Chief Executive Officer                                                                                 

 

5 August 2025