H1 2020 Top & Bottom Line Performance of Romanian Companies

After the final member of the Romanian BET index published their H1 2020 results we bring you an overview of the top and bottom line performance of all index components.

Teraplast posted the largest top line increase as the manufacturer of construction materials continues their growth strategy. In second place comes BVB, whose top line went up 10% YoY on the back of higher trading activity amid the covid-19 breakout. According to the Stock Exchange in H1 2020 the total value of transactions on all markets, including offers, increased by 7% YoY, from RON 5.42 bn to RON 5.79 bn, due to the increase in the value of secondary public offers on the main stock market by RON 0.30 bn. Digi posted a top line increase of 8.3% mostly on the back of growing sales in Spain where the company’s sales grew due to new customer acquisitions as a result of more attractive and affordable offerings.

On the flip side, Sphera led the laggards with a top line decrease of 31.6% YoY. The decrease comes as no surprise considering the strong distancing measures taken to prevent the spread of the covid-19 virus. However, things are improving for Sphera as the company recently received permission to reopen indoor restaurants in Romania starting form Sep 1st. Meanwhile energy companies such as OMV Petrom were faced with a downtrend in commodity prices and lower sales volumes for petroleum products.

Top Line Development of BET Components in H1 2020 (%)

Turning our attention to the bottom line, Digi posted the worst bottom line performance as the company’s net loss amounted to RON -198.6m, from a net profit of RON 15.5m in 2019. Note that the deteriorating result came on the back of a plummeting net financial loss which doubled to RON -535.7m. However, this result was left out of the chart as it was to large to compare to other index members.

Meanwhile, when looking at the chart Sphera again leads the laggards as the company had to struggle with measures taken to prevent the spread of the covid-19 virus which led to the closure of their restaurants. Following Sphera comes Fondul Proprietatea whose bottom line turned negative due to the value decrease of the company’s holdings. The main contributors to the decrease were OMV Petrom (RON 696.6m, decrease in share price of 27.5%) and the RON 1.3bn decrease in value of unlisted holdings following the valuation update in June. The following unlisted companies recorded the highest decrease in NAV: Hidroelectrica (RON -179m), CN Aeroporturi Bucuresti (RON -287.1m), EDistributie Banat (RON 266.7m), E-Distributie Muntenia (RON -215.8m) and E-Distributie Dobrogea (RON -156.8m). Staying with the financial sector, both Banca Transilvania and BRD Bank posted lower bottom line results. As a result of the widespread crisis Banca Transilvania’s cost of risk increased to 1.3%, compared to zero during the same period of 2019. Meanwhile provisions reached RON 2.95bn, up by 16.5% as compared to the end-2019 level. BRD Banks’ net profit was hurt by a cost of risk which amounted to to RON 225.1m versus a release of RON 153m at the end of June 2019, mainly reflecting worsening economic outlook.

On the flip side, Transelectrica was able to more than double their net profit in H1 2020 based on an improvement in profitability. Thus, the total profit from operating activity increased by RON 108m compared to the previous year, mainly due to the reduction of operating costs.

Bottom Line Development of BET Components in H1 2020 (%)

Filip Gracin
Category : Blog

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