For today we decided to look at EBITDA and profit margins of Romanian Companies.
For this we used H1 2020 results. Note that financials were excluded from the analysis.
It is important to note once again that comparing the margins across the selected companies is not necessarily the best way to do the comparison as many companies operate in different industries. Since both EBITDA and profit margin reflect to a great extent the industry in which the company operates in, we advise to compare it to the peer average or median. Nevertheless, it is still worth seeing which Romanian companies are more profitable and therefore have more “room” to potentially reduce the prices of their goods or services if needed, while still remaining a higher level of profitability.
EBITDA margin (trailing 12m)
As visible from the graph, all of the 11 observed companies have a double-digit EBITDA margin, with Romgaz leading the list (52.15%), followed by Nuclearelectrica (51.5%). Next comes Digi Communications with 38.5%. Such results are expected given that the industries in which these companies operate tend to have a relatively high EBITDA margin. However, the Digi operates with a negative (trailing 12m) profit margin, due to a high net loss of EUR 56m recorded in Q1 2020. As a reminder, the company reported a high net financial loss of EUR 98.1m in Q1. On the flip side, and MedLife operate with the lowest EBITDA margin of 11.26%.
When looking at the profit margins, 6 companies operate with a double-digit margin, while Nuclearelectrica operates with the highest margin of 25%. Next comes Transgaz with 24.6%. The difference between the company’s EBITDA and profit margin is rather small, which could be explained with the company’s H1 results being further boosted by FX gains as well as the fact that the company operates with relatively little debt. On the contrary, MedLife has the lowest (positive) profit margin of 0.3%. Next comes Sphera Franchise Group with 1.89%, as the company’s bottom line was severely hit by the pandemic (the most of all observed companies). To be specific, the company had to struggle with measures taken to prevent the spread of the Covid-19 virus which led to the closure of their restaurants. In 2019, Sphera’s profit margin stood at 5.8%.
To recap on H1 top line and bottom line performance of Romanian companies click here.
Profit margin (trailing 12m)
