With the publishing of all the H1 2022 results by the CROBEX10 constituents, we decided to bring you an overview of the change in their EBITDA and profit margins during H1 2022.
One thing that should immediately be noted is the fact that comparing margins across different industries these companies operate is not necessarily the best way to give a comparable overview. This is because the EBITDA and profit margins depend on the industry they operate in, so a real comparison to any of these companies would be to their peer average or median. Even so, it is still worth looking at which of these companies are more profitable and therefore have a larger cushion to potentially reduce prices of their goods or services if necessary, while maintaining a higher level of profitability.
Besides that, we note that looking at only H1 margins might lead to misleading conclusions as some of the observed companies derive most of their earnings in other quarters.
H1 – EBITDA margin of Selected Croatian Companies (%)
Out of all the selected companies, the company with the highest EBITDA margin is Atlantska Plovidba, standing at 61.7%. The company also reported a very strong YoY margin increase of 7.2 p.p. YoY. Good results came as a result of general macroeconomic improvement. The fleet utilization rate amounted to a high 97%, while furthermore, the average daily freight rate sharply increased to USD 21,449 per day. All of the above-mentioned led to an EBITDA increase of 77.8% and therefore, increased the EBITDA margin to 61.7%.
Atlantska Plovidba is followed by Hrvatski Telekom, which had an EBITDA margin of 42.6% in H1 2022, an increase of 0.7 p.p. YoY. HT reported lower sales due to the deconsolidation of Optima. EBITDA decreased due to mentioned lower sales, even though COGS fell too. HT reported solid performance in HT Croatia and Crnogorski Telekom.
Next up, we have Podravka and Končar with EBITDA margins amounting to 15.1% and 13.7%, respectively. Both companies had a good performance during the year, with strong revenue growth. Podravka with an EBITDA margin of 15.1%, decreasing by 0.9 p.p. YoY. Podravka’s sales were up due to price increases of food, but EBITDA reported a smaller increase in H1 mostly due to higher operating expenses, which increased by 9.7%, resulting in a lower EBITDA margin overall. Končar reported very strong results in virtually all segments, while the Transformer segment noted a sales increase of 32.9% YoY, reaching HRK 1.53m. As a result of robust operation growth, EBITDA noted a sharp increase of 130.2% to HRK 298.5m with EBITDA margin increasing as much as 5.6 p.p. YoY. To further boost Končar’s bottom line, its equity-accounted companies showed strong results of HRK 7.2m.
At the bottom of the list, we have AD Plastik, looking at margin levels only. AD Plastik reported an EBITDA margin of -13.3%, reporting a decrease of 26.9 p.p. YoY. This also translated to a lower bottom line margin, as on FY 2021 basis AD Plastik generated 27% of revenues in Russia. In H1 Russia’s sales were down 29.8% due to the stoppage of production as most western car manufacturers and Russian car manufacturers have stopped their production activities. Furthermore, the EU market was down due to the semiconductor shortage, overall resulting in lower operating profitability. Below the operating level, the net financial result significantly improved and slightly offset profitability margins decrease due to FX gain amounting to HRK 24.4m.
We also note that we have not included Croatian tourists in the overview, as they reported a negative EBITDA and a net loss. H1 tends to be a loss-generating quarter for Croatian tourists, so the performance should not be considered indicative of the FY results, as they make most of their profit during Q3.
H1 – Profit margin of Selected Croatian Companies (%)
Looking over to the profit margins, the company with the highest margin is still Atlantska Plovidba, with 41.6%. Following them, we have Končar and HT with 10.3% and 8.9%, respectively. On the flip side, the only company with a profit margin lower than 5% was AD Plastik, at -14%, as the company’s bottom line was strongly impacted by both semiconductor shortage and stoppage of production of most western car producers and Russian car producers.
