Today, we bring you our updated overview of the indebtedness and capital structure of Slovenian companies that comprise the SBITOP index using the H1 2024 results. It should be noted that we excluded NLB, Triglav, Sava Re, and Equinox from this comparison due to the nature of their business operations.
At the same time, both Cinkarna Celje and Krka maintain negative net debt, meaning their cash positions (short-term financial assets plus cash and cash equivalents) exceed their financial liabilities. As a result, they have been excluded from the net debt/EBITDA graph. Among the remaining Slovenian blue-chip companies, Petrol holds the highest net debt/EBITDA ratio at 2.1x, reflecting a 0.3x increase from the first quarter. This uptick signals a continued reversal of the previous trend of reducing the ratio. Despite the ongoing pressures on revenue and profitability from stringent price caps, particularly in Slovenia, the company’s EBITDA grew by 6% YoY in the second quarter of 2024. Still, the rise in debt contributed to the higher net debt/EBITDA ratio.
Telekom Slovenije’s net debt/EBITDA ratio remained stable at 1.6x in the second quarter, as both EBITDA and net debt grew by 4% YoY. Despite a 4% YoY reduction in company’s CAPEX, amounting to EUR 79.7m in H1 2024, domestic investments increased by 10% YoY. Given the capital-intensive nature of the telecommunications sector, where substantial infrastructure investments are often funded through debt, the relatively high net debt/EBITDA ratio reflects the ongoing need for such financing.
Net Debt/EBITDA
Source. LJSE, InterCapital Research
Among the companies analyzed, Luka Koper holds the lowest net debt/EBITDA ratio at 0.5x, marking a slight increase since the first quarter of 2024. This rise is attributed to an increase in net debt of approximately EUR 20m (65% QoQ) in order to finance the ongoing investment cycle, while EBITDA remained flat.
The graph below illustrates how much additional debt companies could assume to reach a net debt/EBITDA ratio of 3x, which is often viewed as a warning level for indebtedness in the region. Krka, with its substantial cash holdings resulting in negative net debt, has the highest potential to take on additional debt, exceeding EUR 2.2 million. Despite having negative net debt, Cinkarna Celje has the lowest capacity for additional debt, at EUR 60.6m, primarily due to its relatively low profitability, with an EBITDA of only EUR 17.5 million.
Potential Additional Debt (EURm) to reach 3x EBITDA
Source: LJSE; InterCapital Research
We also reviewed the capital structure of the observed companies. Cinkarna Celje leads with virtually 100% equity, followed by Krka with 99.5%, Luka Koper at 81.1%, Telekom Slovenija at 61.4%, and Petrol with 56.9% equity in their financing structures. In the latest quarter, no significant changes occurred in the capital structure of Slovenian blue-chips.
Capital Structure of Select SBITOP Companies
Source: LJSE, InterCapital Research
