As all Croatian blue chips published their 2020 results, we decided to look at what effect did the pandemic have on the profitability margins of each observed company.

It is important to note that comparing the margins across the selected companies is not necessarily the best way to do the comparison as many companies operate in different industries. Since both EBITDA and profit margin reflect to a great extent the industry in which the company operates in, we advise to compare it to the peer average or median. Nevertheless, it is still worth seeing which Croatian companies are more profitable and therefore have more “room” to potentially reduce the prices of their goods or services if needed, while remaining a higher level of profitability.

2020 results include the aftermath of Croatia’s tourist season which both directly and indirectly influences many Croatian blue chips.

EBITDA margins (%)

In 2020, two telecoms lead the list with the highest EBITDA margins. Those are HT and Optima Telekom with EBITDA of 41.3% and 34.2%. For HT this notes a slight increase in the margin of 0.4 p.p., as this is one of the sectors who was among the least impacted by the pandemic on profitability level. Next, comes Atlantska Plovidba with EBITDA margin of 33.8%, a slight decrease of 2.8 p.p. YoY. Meanwhile, the company’s EBITDA was halved in 2020 to HRK 74m.

Two tourism companies follow – Maistra and Valamar Riviera with EBITDA margin of 19.8% and 15.3%. Both of theirs EBITDA margins harshly decreased in 2020 by 15 p.p. and 20 p.p. due to the halt in travel caused by Covid-19.

Change in EBITDA & Profit margin (2020 vs 2019) (p.p.)

In terms of profit margins, 4 companies reported a net loss (RIVP, ARNT, MAIS, ATPL). Meanwhile HT reported the highest profit margin of 7.6% (decrease of 1.8 p.p. YoY). When looking at the YoY p.p. changes of profit margins in 2020, we can note that aside from the 4 mentioned companies, we have not seen significant changes in profitability despite the pandemic.

Profit margins (%)