For today, we decided to present you with a brief analysis of cash per share of Croatian companies.
In October, Croatian companies published their 9M results, so we decided to revisit (update) our cash per share analysis. The analysis is done in order to see the strength of the balance sheet and how liquid selected Croatian companies are. This figure as the percentage of a company’s share price can give us more insight on the company’s strength on returning the money to shareholders (either through dividends or buybacks), paying down debt etc.
It is important to note that looking at solely cash per share of a company could lead to misleading conclusions if we did not also take into consideration the company’s indebtedness. To see the 9M indebtedness of Croatian companies click here.
Cash per Share of Croatian Blue Chips (HRK)
A high level of cash per share indicates a solid performance of the company, reinsuring the shareholders that the company is operating with “enough room” to cover for any potential difficulties and that the company has adequate capital.
Cash per Share as a Percentage of the Current Share Price
As visible in the graph, of the selected companies, Končar operates with the highest cash per share as a percentage of their current share price of 48.9%, while their cash per share amounts to HRK 286.2. Adris pref. comes next with 42.8%. Two tourist companies – Arena Hospitality Group (38.7%) and Valamar Riviera (28.9%) are following. Note that all of the above-mentioned companies decided not to pay a dividend in 2020, or in other words retained all of their 2019 earnings.
On the flip side, Optima Telekom has the lowest cash per share of HRK 0.12, which translates into 2.6% of its current share price. As a reminder, the company’s cash position has significantly decreased to HRK 8.47m as it has been operating with losses in the recent years. Optima’s share price has also been hit the most of the observed companies this year (-42.1%). As a reminder, Optima observed a sharp decrease in August on the back of the news that HT will start fulfilling its obligation to engage an investment bank for the further sale process or to take actions to prevent possible delays in fulfilling the obligations prescribed by the Croatian Competition Agency decision on the conditionally permitted concentration of HT and Optima.
In the graph below you can see the cash position of selected Croatian companies as of end September. As visible from the graph, 2 Croatian companies breach the billion kuna mark – HT with 3.18bn and Adris with 2.93bn.
Cash Position of Croatian Blue Chips (HRK m)*
*Cash and short-term financial assets (from 9M 2020 reports)
