Today, we decided to give you an overview of the cash per share of Croatian blue chip companies.
Last month, Croatian companies published their preliminary FY 2021 results, so we decided to bring you an overview of their cash per share. This overview is done in order to see the strength of the balance sheet as well as the liquidity of these companies.
As a reminder, the cash per share metric measures how much cash a company has on hand, on a per-share basis. It is calculated by looking at the company’s total cash on its balance sheet, including short-term investments that can easily be turned into cash. Afterward, this number is divided by the number of shares outstanding, giving us the cash per share metric. This figure is useful for demonstrating a company’s ability to return money to its shareholders (either through dividends or buybacks), pay off its debts, etc.
Cash per share of Croatian blue chip companies (HRK)
Several things should be noted here. First of all, looking solely at cash per share of a company can give a misleading view into its financial strength, with no debt being taken into account with the figure. As such, looking at the company’s indebtedness should also be considered. To learn more about this, click here.
A high level of cash per share indicates the solid performance of the company, as well as giving some reinsurance that the company will be able to cope with any unexpected difficulties. Also, this metric as a number itself is not telling the whole story, as some companies might have more cash but also more shares outstanding, diluting the number. As such, looking at the cash per share as a percentage of the current share price gives a better overview.
Cash per share as a percentage of current share price (%)
As can be seen from the graph, the company with the highest cash per share as a % of their current share price is Adris, with 39.4%, followed by Valamar Riviera with 30.3%, Končar with 28.5%, Arena Hospitality Group with 25%, Ericsson NT with 22.6%, Atlantska Plovidba with 22%, and HT, with 19.3%. The higher level of cash per share, especially among the tourist companies (Adris, Valamar, Arena) can be attributed to strong tourist season and growth in operating cash flow. On the other hand, an increase in cash is a result of a lower level of investments caused by the pandemic and uncertainty due to the already high level of debt that tourist companies usually hold. Also, tourist companies continued to take on leverage as maturities of pandemic moratoriums came into force, or to finance further investments and improve the capital structure. In 2021, Valamar decreased its debt by 8% YoY, while Arena increased its interest-bearing debt by 12% YoY.
A similar situation is with other asset-heavy companies like Končar and Atlantska Plovidba. With the former, a higher level of cash is a result of an increase in cash flow from financing while in the latter it is a result of growth in cash flow from operations. On the other hand, Podravka has the lowest cash per share as a percentage of current share price, of 0.84%, preceded by Atlantic Grupa with 6.7% of cash as % of its current share price. Lastly, we look at the cash position of these companies. This includes both the cash as well as the short-term financial assets.
Cash position of Croatian blue chips (HRK)
Looking at the amount of cash these companies have, Hrvatski Telekom, Adris, and Valamar Riviera all have more than HRK 1bn of cash, at HRK 2.87bn, HRK 2.69bn, and HRK 1.16bn, respectively. On the other hand, AD Plastik and Podravka have the least amount of cash, at HRK 30.2m and HRK 33.3m, respectively.