The tourism-insurance-food conglomerate Adris Group published they are ready for another big share-buyback programme. Adris targets up to 1,000,000 ordinary shares ADRSRA (10.40% of their total number) and up to 200,000 preferred share ADRSPA (2.95% of their total number). Max price for both share types are about 9% above Friday close. Bids will be open from 18 February until 25 February.

Technical details

REGULAR SHARES
Bloomberg: ADRSRA CZ
Maximum number: 1,000,000
Percentage of total issue: 10.40%
Maximum price: HRK 530 per share (9% above Friday close)

PREFERRED SHARES
Bloomberg: ADRSPA CZ
Maximum number: 200,000
Percentage of total issue: 2.95%
Maximum price: HRK 465 per share (9% above Friday close)

Period: accepting offers between 18 – 25 February
Minimum size: HRK 2m per broker, block transaction
Pricing: single price for each share type

Official invitation to submit offers: LINK (Croatian only)
Unofficial English translation: LINK

About Adris

Adris Group is a conglomerate and one of the largest listed companies on the Zagreb Stock Exchange with a market cap of EUR 1.1bn. Their three main business arms include:

• tourism – represented by two pillars. Maistra (MAISRA CZ), the third largest tourism company in Croatia, is going through a strong CAPEX cycle targeted at creating top-notch accommodation and 5-star hotels. Last year Adris acquired HUP-Zagreb (delisted), a mainly city-hotel owner and operator. With this acquisition, Adris is expected to significantly decrease the seasonality of the business and further enhance its leading position in the Croatian tourism sector.
• insurance – represented by Croatia Osiguranje (CROSRA CZ), the largest insurer in Croatia. Adris acquired the majority stake from the Government back in 2014, and CROS was at the time a low-profitable insurer. Adris began a strong repositioning of the company, halting the loss of market share and bringing ROE above 10%.
• food – Cromaris is the smallest of the mentioned companies, but it has been growing strongly for years. They breed and sell fish, and are positioning themselves among top-branded producers.

Recent Results

Consolidated operating revenues were up 12% in 2018, to HRK 5.6bn, and EBIT increased by 18% (up by HRK 60m). This was offset by a HRK 153m negative movement in net financial revenues, but the bottom line (+13% to HRK 423m) is still up due to tax incentives (HRK 143m taxes less than in 2017). We guess this is related to the tourism companies and their investments, but we will know more once all individual reports are published. At the end of December, the Group still held a large net cash position (HRK 2.5bn or EUR 333m), down from HRK 4.3m a year earlier (mostly attributable to the acquisition of HUP-Zagreb).

Maistra surprised with a decreased EBITDA (-1% YoY to HRK 396m), especially after posting a 10% increase in 9M 2018. Management comments are not yet published so we can only guess the decrease has to do with the large CAPEX cycle (Maistra is close to launching their flagship hotel Park). EBT is down by HRK 17m or 9%, but the bottom line edged up 73% to HRK 281m (due to the tax incentives). HUP-Zagreb will probably not publish separately as they have been delisted, but we note that their 9M results showed a 13% increase in revenue, 14% in EBITDA and a bottom line of HRK 96m (+25%).

Croatia Osiguranje is expected to show results following the Supervisory Board meeting (scheduled on 21 Feb). In 9M 2018 they reported GWP up 8.5% and a net income of HRK 332m (+51%).

Cromaris’ results might be touch upon within Adris’ annual report. In 9M 2018 they reported revenue up 14% and net profit of HRK 21m (+31%).

We will publish a more detailed Company Note once all separate reports are published.