In Q1 the company observed a decrease in sales of 10.8% YoY, increase in EBITDA of 251.7% (increase in loss) and a net profit of HRK 12m.

As Dalekovod published their Q1 2019 report, we are bringing you key takes from it. The company notes that the industry they are in traditionally observes lower activity in the first quarter, which affects Dalekovod’s Q1 result as well.

According to the report, in Q1, the company observed a decrease of 10.8% YoY in sales, amounting to HRK 215.5m. Meanwhile, operating revenues recorded a decrease of 12.6%, amounting to HRK 220.7m. The decrease in sales could be attributed to a decline in the activity of contracting deals in 2018.

Operating Revenues (Q1 2019 vs Q1 2018) (HRK m)

The postponement of tenders expected in 2018 to 2019 has resulted in an order book of HRK 843m and the beginning of 2019 marked a positive trend in contracting new deals. In the first four months, the company has contracted or has been chosen as the best bidder for deals worth HRK 1.1bn. The company notes that the realization of some of the deals is expected already in 2019.

When observing Dalekovod’s EBITDA, it amounted to HRK -23.1m, which represents an increase of loss by 251.7% YoY. The company attributes such a change to higher project costs, which were caused by lower productivity due to bad weather conditions.

Moving further down the P&L, Dalekovod moved from a net financial loss in Q1 2018 of HRK -4.6m to a net financial gain of HRK 44.5m. The financial gain came as a consequence of the sale of Dalekovod Professio (wind power plant). The funds from the sale of the mentioned company were used for financing Mezzanine debt, which amounts to HRK 60.3m and financing of working capital.

The net financial gain lead to a net income of HRK 12m in Q1 2019, compared to a net loss of HRK -21.9m in Q1 2018.

Net Income & EBITDA (Q1 2019 vs Q1 2018) (HRK m)

It is important to note that Dalekovod started the process of restructuring by which the company aims to decrease total labor costs which will lead to a decrease in the number of employees by 15%. Besides that, the company notes that the restructuring is also focused on identifying their non-operating assets. The effect of the restructuring is expected to be visible on 2020 operating result, while the company expects one-off expenses in 2019 from the mentioned restructuring.