The endowment of the RAG Foundation reaches 18 billion euros.
To offset the expenses associated with halting coal mining in Germany, the RAG Foundation was established roughly 15 years ago. This organization generates income through investments in other businesses. These ventures yielded approximately 400 million euros in earnings last year.
Last year, the RAG Foundation allotted 266 million euros towards perpetual projects following the cessation of German coal mining. This figure represents a rise of around 19 million euros compared to the previous year. The main cause behind this growth is heightened energy costs. Since the conclusion of German coal mining five years ago, the foundation has spent a total of 1.3 billion euros on perpetual tasks. In addition to funding work pertaining to coal mining's aftermath, the RAG Foundation also sponsors initiatives in areas such as education, science, and culture. It granted 32 million euros for these purposes in 2023.
By the end of 2023, the foundation's assets increased from 16.8 billion euros to 17.5 billion euros. They further swelled to approximately 18 billion euros by May 2024. The RAG Foundation has decreased its reliance on specific investments within its portfolio. It sold five percent of Evonik's core capital in mid-May 2024, causing the company to account for just a quarter of the foundation's overall assets. The foundation currently owns around 47 percent of Evonik, but aspires to gradually decrease this stake to 25.1 percent, according to Foundation CEO Bernd Tönjes.
Signa's bankruptcy results in a 189 million euro loss for the foundation
The RAG Foundation also experienced financial hardship due to Signa's insolvency, a prominent Austrian real estate and trading group. Consequently, this investment was removed. CFO Jürgen Rupp estimated the detriment to be 189 million euros. "That's a significant hit for us. However, our annual results disclose that the foundation's investments and risk management strategies are competent enough to handle such setbacks," he declared in a pre-released statement. "We've gained some valuable insights from this experience," said Foundation CEO Tönjes.
The RAG Foundation recorded an overall profit of 394 million euros from its entire investment portfolio from the entire year. This surpassed the 347 million euros generated in 2022. These funds facilitated the payment of the increasing perpetual expenses, which now amount to 9.1 billion euros.
The RAG Foundation was initiated in 2007 to secure funding for long-term costs incurred by German coal mining. Perpetual tasks are responsibilities stemming from the mining operations that persist indefinitely, such as continually draining mine water.
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The RAG Foundation, in an effort to diversify its investments, sold a portion of its Evonik shares, reducing its stake to aim for 25.1%. This move resulted in Evonik accounting for only a quarter of the foundation's total assets.
Despite the RAG Foundation's overall profit of 394 million euros from its investment portfolio in a year, an unfortunate loss of 189 million euros was incurred due to Signa's bankruptcy, a significant Austrian real estate and trading group.
