In 9m 2019, the company observed a decrease in sales of 2% YoY, (positive) EBITDA of HRK 18.97m and net profit of HRK 22.38m.

As Dalekovod published results for the first nine months of 2019, we are bringing you key takes from it. According to the report, the company recorded sales of HRK 864.98m, representing a decrease of 2% YoY. However, when observing solely Q3 the company recorded a slight increase in sales of 1% YoY, amounting to HRK 325.7m. The company states that during Q3, a high activity of new tenders occurred. Similarly to other quarters, 83% of the revenues comes from the power line segment, 13% from the infrastructure segment, while 4% comes from the substation segment. When observing revenues by market structure, foreign market continues to account for a significant amount, partially due to the decrease of activities and delay of tenders on the domestic market.

In 9m 2019, operating expenses amounted to HRK 894.5m, representing a solid decrease of 6% YoY (HRK 58m). As a result, the company turned its way towards profitability, with EBITDA amounting to HRK 18.97m, compared to HRK -3.9m in the same period last year. However, operating profit remains negative, amounting to HRK -7.97m. Still, this represents a significant reduction in loss of HRK 28.8m.

It is worth mentioning that the Group’s poorer performance compared to the Company was most influenced by the operations of the company MK Manufacturing and OSO which generated a negative EBITDA of HRK 14.7m in 9m 2019.

Going further down the P&L, Dalekovod observed a net financial gain of HRK 30.6m, compared to a loss of HRK 8.51m, which led to a net profit. Such a difference could be mainly attributed to a favorable FX result.

In 9m 2019, Dalekovod recorded a net profit of HRK 22.4m, compared to a net loss of HRK -45.5m in 9m 2018. However, when observing solely Q3 the company observed a net loss HRK -7.7m, representing a reduction in loss of HRK 29m.

Dalekovod Performance (9m 2018 vs 9m 2019) (HRK m)

The Group states that despite the increase in profitability, they continue to operate with limited liquidity and dependencies on the immediate support of key creditors, financial institutions. Limited liquidity is still largely a result of negative operating results in 2018, and current working capital needs to support the growth of business activities in the operational restructuring process.