In Q1 2022, Dalekovod recorded a decrease in sales of 37.9%, a decrease of EBITDA from HRK 14.4m to HRK -19.4m and a net loss to majority of HRK 25.7m (vs. a gain of HRK 3m in Q1 2021).
In the first three months of 2021, total sales of Dalekovod Group amounted to HRK 175.3m, representing a decrease of 37.9% YoY. The decrease of the operating income is primarily the result of a lower tender activity during 2020 and 2021. Furthermore, an unstable political situation accelerated already present growth of input prices, consequently amplifying inflation pressures and further lowering Group’s profitability. The highest decrease in profitability was on Group’s parent company, Dalekovod due to the termination of two projects in Ukraine and overall lower activity in Scandinavian countries. Also, the daughter company Dalekovod Ljubljana in Slovenia reported lower than expected activity due to termination of the project Cirkovce-Prince 2x400kV. Group does not expect further losses from cessation of Ukraine projects, as deals with investors are structured to minimize risk. The Production segment revenues was up 13% YoY, amounting to HRK 37m, but it due to inflationary pressures, lower profitability was realized. Dalekovod Mostar reported an increase in sales amounting to 24%, due to high activity in contracted jobs during 2021. On the local market, Dalekovod Project and Dalekovod EMU reported lower sales due to lower customer activity.
Following the capital increase by its new owners and the payment of total capital of HRK 410m in cash in January, the company settled its debt to creditors with funds raised by the issue of new shares. The claims were determined by pre-bankruptcy settlement. The total amount of settled claims amounted to HRK 357m and, consequently, indebtedness indicators and the overall financial position of the Company significantly improved. As capital inadequacies were eliminated company ensured greater resilience to external factors.
Operating expenses, which amounted to HRK 205.9m, decreased 25.6% YoY. This is mostly due to OPEX following the sales trend. The mentioned decrease in OPEX was mostly driven by lower material costs, reporting a 42.1% or HRK 71m decrease. Employee expenses were down nominally just HRK 3.2m or 5.1% YoY to HRK 59m. The number of employees stood at 1,217 at the end of the reporting period, which is 95 employees less YoY. The aforementioned EBITDA decrease (from HRK 14.4m in Q1 2021 to HRK -19.4m in Q1 2022) is mostly due to the decrease in sales. As EBITDA decrease was greater than sales decrease, operating profitability decreased and EBITDA margin was down 162 basis points to -11.1%.
Net financial result improved from HRK -6.9m to HRK 903k due to much lower FX losses, which decreased from HRK 6.1m to HRK 868k.
In the first three months of 2021, Dalekovod recorded a net loss to majority of HRK 26m, which is a direct result of lower sales and generally lower operating profitability, both on EBIT and EBITDA levels.
To emphasize, Dalekovod will be consolidated within the Končar Group from the 2nd quarter of 2022 and Dalekovod’s much stable financial position due to capital increase, which settled debt claims to creditors, should pour a positive view to investors.
