Incurred expenses following mining operations. - Foundation RAG generates significant excess despite Signa's bankruptcy.
The RAG Foundation ended up with a profit of €394 million in the past year, despite a €1 billion adjustment due to the Signa bankruptcy. This is €47 million more than in 2022, as per the organization's announcement on Tuesday in Essen. This success is credited to the provision for what they call "perpetual liabilities," which now stands at €9.1 billion.
The RAG Foundation oversees the costs related to German coal mining, including those that will never end, like the continuous draining of mine water. The board of trustees includes German Federal Ministers for Economics and Finance, among others. The foundation is also present in more than 20,000 companies around the world through participatory companies.
Loss from the Signa Investment: €189 Million
These investments also include shares in insolvent real estate companies of the Austrian Signa Group. The value of these shares, a total of €269 million, was fully revised, as stated by the foundation. After deducting dividends and profits from the sale of Signa shares, the foundation details a loss of €189 million from the Signa investments.
The managing director of the RAG Foundation, Bernd Tönjes, said, "We have learned from our experience with the Signa engagement." Knowing this, it's also evident that "having a diverse range of investments in various regions, markets, and asset classes is advantageous even during difficult times."
Foundation assets by May: Approximately €18 billion
The foundation's assets rose from €16.8 billion at the end of 2022 to €17.5 billion at the end of 2023. By May 2024, they had climbed to roughly €18 billion. The foundation has further decreased its reliance on individual positions within its investment portfolio. After selling around 5% of Evonik's registered capital in the middle of May, Evonik now accounts for just a quarter of the foundation's total assets.
The foundation spent €266 million to cover perpetual liabilities in the last year, a €19 million increase from 2022. Most of this growth is driven by higher energy costs. In the five years since the conclusion of German coal mining, the foundation has disbursed a total of €1.3 billion to accomplish these long-term responsibilities.
The RAG Foundation also funded initiatives in former mining regions in the domains of education, science, and culture last year. They provided €32 million for such projects in 2023 and pledged to carry on this financial support in the years ahead.
Tönjes expressed a positive evaluation for the past year: "The RAG Foundation is in a strong position." The key factor in this success is the diversification of assets. "We are not solely dependent on one or two legs. We have innumerable legs."
Based in the World Heritage Site Zollverein in Essen, the foundation houses only a small group of employees: It currently employs 27 people.
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- Despite the €1 billion adjustment due to Signa's bankruptcy in North Rhine-Westphalia, the RAG Foundation managed to generate a substantial surplus of €394 million last year.
- Saarland is not among the regions where the RAG Foundation has participatory companies, as it oversees costs related to German coal mining, including perpetual liabilities.
- The Signa Investment resulted in a loss of €189 million for the RAG Foundation, primarily from shares in insolvent real estate companies of the Austrian Signa Group.
- Evonik Steag, a significant asset, accounted for a quarter of the RAG Foundation's total assets, following the sale of around 5% of its registered capital in May.
- The RAG Foundation allocated €32 million last year to fund initiatives in former mining regions, focusing on education, science, and culture, aiming to continue this support in the future.
- Located in the World Heritage Site Zollverein in Essen, the RAG Foundation employs a small team of 27 people, overseeing the significant excess generated from German coal mining operations.
