Today, we bring you our updated overview of the indebtedness and capital structure of Slovenian companies which comprise the SBITOP index using the FY 2022 results. It should be noted that we excluded NLB Banka, Triglav, and Sava Re from this comparison due to the nature of their business operations. Finally, a few Slovenian companies published their Q1 results, but we used FY 2022 data so all the companies have the same denominator.
At the same time, Luka Koper, 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 4.9x, while the company has a cash-adjusted P/E of 3.8x. At the same time, Krka has a P/E of 9.6x, whilst the company has a cash-adjusted P/E of 8.2x. Finally, Luka Koper’s share is trading at P/E of 12x, while cash-adjusted base amounts to 9.8x.
P/E and Cash-adjusted P/E
Source: LJSE, InterCapital Research
Out of the remaining companies (Petrol and Telekom Slovenije), Petrol has the highest net debt/EBITDA ratio of 5.4x. It should also be noted that Petrol is currently under a lot of persisting pressures regarding its margins and financial position due to government regulation of petrol, electricity and gas prices. Further, Telekom Slovenije has a net debt/EBITDA ratio of 1.9x. 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.
Net Debt/EBITDA
Source: LJSE, InterCapital Research
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. Further, we note that Petrol’s deviation obviously comes from much lower results in 2022 due to government regulation. The situation should stabilize and improve in the upcoming period.
Potential Additional Debt (EUR m) to reach 3x EBITDA
Source: LJSE, InterCapital Research
We also took a look at the capital structure of the observed companies. Cinkarna Celje leads the way with virtually 100% equity, followed by Krka with 99.4%, Luka Koper with 89% and Petrol & Telekom Slovenije, both with 58.2% of equity in its structure of financing.
Capital Structure of Select SBITOP Companies
Source: LJSE, InterCapital Research
