In Q1 the company recorded a 5% increase in sales, decrease in EBITDA of 9.7% and a decrease in net profit of 12%.
In Q1 of 2020, Cinkarnca Celje recorded sales revenues of EUR 47.8 million, which is an increase of 5% YoY and 10% higher compared to the plan. The total value of exports in the period considered reached EUR 43.1 million, which is 6% YoY higher 11% more than planned. The company notes that the absence of Chinese manufacturers in the European market at the beginning of the year increased demand for the company’s carrier product.
Cinkarna adds that the situation on the international titanium dioxide pigment market has not changed significantly compared to the last quarter of 2019.Based on their evaluation of the current market situation, they estimate that there will be no major price corrections this year. Also, no increases in the prices of titanium-bearing raw materials are expected.
When observing operating expenses, the company recorded an increase of 9.7%, amounting to EUR 39.3m. As a result of the higher operating expenses, EBITDA amounted to EUR 11.4m, representing a decrease of 9.8% YoY. This puts EBITDA margin at 24% (-3.9 p.p. YoY). Operating profit stood at EUR 8.4m (-12.8% YoY).
In Q1, Cinkarna record a net profit of EUR 6.89 million which was 12% YoY lower. The company notes that for Q1 they planed a net profit of EUR 3.52 million, which means that they exceeded the plan by 95%.
Turning our attention to CAPEX, in Q1 Cinkarna invested EUR 3.4 million in fixed assets, which is an increase of 122% YoY and 31% less than a quarter of the investment plan for 2020. Investment activities in the first quarter of the year they were focused mainly on the continuation of modernization, intensification and rise energy efficiency and ensuring the environmental acceptability of titanium pigment production dioxide.
Dividend Proposal
Cinkarna also proposed the distribution of 2019 net profit. The company’s management board announced a dividend proposal of EUR 10.51m, which translates to a dividend of EUR 13.2 per share.
Such a dividend is 53.3% lower compared to the one paid in 2019. At the current share price, dividend yield is 8.3%. Note that the dividend payment is subject to approval at the GSM, while the ex-date is 3 July 2020.
In the graphs below, we are bringing you a historical overview of the company’s dividend per share and dividend yield.
Dividend per Share (EUR) and Dividend Yield (%) (2012 – 2020)
