Indebtedness and Cash Position of SBITOP Companies – 9M 2021

Today, we bring you our updated overview of the indebtedness and capital structure of Slovenian companies which comprise the SBITOP index using the 9M 2021
results.

As all the companies which are part of the SBITOP index have published their 9M 2021 results, we decided to take a look into how indebted these companies are by comparing net debt to EBITDA. It should be noted that we excluded NLB Banka, Triglav, and Sava Re from this comparison.

At the same time, Cinkarna Celje and Krka operate at a negative net debt, meaning their cash position (short-term financial assets + cash and cash equivalents) exceeds their financial debt. Because of this reason, they were excluded from the net debt/EBITDA graph. To make up for this, we decided to show the differences in P/E and cash-adjusted P/E of these two companies. When comparing these two numbers in these companies, we can see that Cinkarna Celje has a P/E* of 6.54x, while they have a cash-adjusted P/E* of 5.15x. At the same time, Krka has a P/E* of 11.3x, whilst they have a cash-adjusted P/E* of 10.24x.

*Based on the price taken on November 30th, 2021

P/E and Cash-adjusted P/E

Out of the remaining companies (Telekom Slovenije, Petrol and Luka Koper), Telekom Slovenije has the highest net debt/EBITDA ratio of 2.43x. Considering that Telekom Slovenije operates in the telecommunications industry, where investments into new infrastructure (and thus the need for a lot of cash to finance these projects) are taken in the form of debt, the Company’s net debt is at a higher level in comparison to their EBITDA. It is also worth pointing out that YoY, the company managed to increase its EBITDA by over 20% (from EUR 144.5m to EUR 174m), whilst increasing its net debt by only 9.4% (from EUR 386.6m to EUR 422.9m). Next up, we have Petrol with a net debt/EBITDA of 1.69x. It should also be noted that Petrol achieved an EBITDA growth of 53.6% YoY, whilst reducing its net debt by 1.4%. Lastly, we have Luka Koper with a net debt to EBITDA of 0.68x. When considering the industry (shipping and port services) Luka Koper operates in, it comes as no surprise the need for cash to finance further port infrastructure investments. Even if this is not evident from the lower net debt/EBITDA, the Company currently has a net debt of EUR 30.9m, representing a 96% growth YoY (vs. 15.8m). During the same time, the Company increased its EBITDA by 7%, which means that if we were to compare net debt/EBITDA 9M 2020 vs. 9M 2021, it grew by 83% YoY (from 0.37x to 0.67x).

Net Debt/EBITDA

We looked at how much additional debt the companies could take in order to reach 3x EBITDA, which in the region is considered a breaking point and a red flag in terms of indebtedness.

Potential Additional Debt (EUR m) to reach 3x EBITDA

We also took a look at the capital structure of the observed companies, with all of them having over 70% of their funding from equity. Cinkarna Celje leads the way with 99.96% of equity, followed by Krka with 99.3%, Luka Koper with 85.8%, Telekom Slovenije with 75.7%, and Petrol, with 70.9%.

Capital Structure of Select SBITOP Companies

InterCapital
Published
Category : Flash News

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