Today, we bring you our updated overview of the indebtedness and capital structure of Slovenian companies which comprise the SBITOP index using the FY 2021 results.
As all the companies which are part of the SBITOP index have published their 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 7x, while they have a cash-adjusted P/E* of 5.16x. At the same time, Krka has a P/E* of 9x, whilst they have a cash-adjusted P/E* of 8.49x.
P/E and Cash-adjusted P/E
Out of the remaining companies (Petrol, Telekom Slovenije, and Luka Koper), Petrol has the highest net debt/EBITDA ratio of 2.13x. It should also be noted that Petrol achieved an EBITDA growth of 42.9% YoY whilst increasing its net debt by 54.37% YoY, mostly due to the latest acquisition of Crodux. Telekom Slovenije has a net debt/EBITDA ratio of 2.03x. 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. The company increased its EBITDA by 4.4% YoY, but this ratio still suffered since the company increased its debt by 19%.
Lastly, we have Luka Koper with a net debt to EBITDA of 0.90x. 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 55.05m, representing a 158% growth YoY. During the same time, the company’s EBITDA remained almost the same, which means that if we were to compare net debt/EBITDA 2020 vs. 2021, it grew by 160% YoY (from 0.35x to 0.90x).
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. Cinkarna Celje leads the way with 99.9% equity, followed by Krka with 99.3%, Luka Koper with 86.5%, Petrol and Telekom Slovenije with 59.9% and 55.8%, respectively.
Capital Structure of Select SBITOP Companies
