Overview of Romanian Companies Q1 Top & Bottom Line Performance

After all BET components published their Q1 2020 results we bring you a short overview of their top and bottom line performance.

Overall, the top line performance of BET components in Q1 2020 was solid with 10 out of 14 companies posting improved top line results. The Bucharest Stock Exchange published the highest top line improvement of 29.1%. Higher revenue came as a result of increased trading activity, coupled with a value increase of secondary public offers. In second place comes Teraplast who managed to record a 20% YoY increase in sales despite the virus outbreak. The growth came on the back of construction works. Although Medlife’s business declined by 25% in March, January and February showed strong growth rates that ultimately managed to offset the impact of COVID-19 on sales

YoY Sales Change in Q1 2020 (%)

Unlike the top line, most BET components posted lower bottom line results in the first quarter with 9 out of 14 companies witnessing a decrease in net profit or a widening of their net loss. Note that we had to exclude some of the companies from the chart as their relative YoY performance were significant outliers.

On the bottom line Fondul Proprietatea posted a strong negative decline from last year’s net profit of RON 414m to a net loss of RON -1.9bn. Such a performance was a result of net unrealized loss from equity investments in the amount of RON 2.46bn. The loss was mainly generated by OMV Petrom (RON 889.2m, decrease in share price of 35.1%), Hidroelectrica (RON 349.7m), CN Aeroporturi Bucuresti (RON 311.2m), EDistributie Banat (RON 252.6m), E-Distributie Muntenia (RON 210.1m) and E-Distributie Dobrogea (RON 159.9m).

The worse bottom line performance, on a relative scale, was posted by Alro whose net loss widened 1114% from RON -9m to RON -110m. In second place comes Sphera, whose bottom line turned to RON -12m from a net profit of RON 1.3m witnessed in Q1 2019. The sharp decrease came as a result of the virus which forced the company to close most of their restaurants for a certain period of time.

On the flip side, Medlife posted the highest bottom line increase. Despite posting lower sales results, the company was able to boost their operating performance through measures taken to limit the financial impact of COVID-19.  Adding on top of that an improved net financial result and the company was able to increase their bottom line 3x. In second place comes Transelectrica who managed to double their net profit on the back of a lower cost base (-16% YoY), coupled with a lower net financial loss.

YoY Net Profit Change in Q1 2020 (%)

Overall, if ones was to sum up the performance of BET components in Q1 2020 it would be that despite the fact that most companies managed to increase their top line, only the companies that were able to implement effective methods to limit the COVID-19 financial impacts successfully transferred those higher sales to the bottom line.  

Filip Gracin
Category : Blog

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