Today, we bring you an overview of the indebtedness and the capital structure of the Croatian companies which are constituents of CROBEX10, using FY 2021 results.
With all the financial results for the FY 2021 of the companies that comprise CROBEX10 published, we decided to look at how much debt do these companies have by comparing net debt to EBITDA and % of debt financing. We also looked at how much additional debt could these companies take to reach 3x EBITDA.
Among these companies, Adris Grupa, Ericsson NT, Hrvatski Telekom, and Končar operate with a negative net debt. This means that their cash positions (that is, short-term financial assets + cash and cash equivalents) exceed their financial debt. Because of this, their net debt is negative, and as such, they were excluded from the net debt to EBITDA overview.
Out of the remaining 6 companies, ranking them by the level of indebtedness, the highest indebtedness is maintained by Arena Hospitality Group and Valamar Riviera, with net debt/EBITDA ratios of 8.72x and 3.03x, respectively. Considering they operate in an asset-heavy industry (tourism industry) where a lot of debt is taken in order to invest into new and existing assets (hotels, apartments, campsites, etc.), this level of indebtedness is unsurprising. Next up we have Ad Plastik, Atlantska Plovidba, with net debt/EBITDA ratios of 2.9x and 1.11x, respectively. Considering AD Plastik operates in the manufacturing sector (production of car components, among other things), this type of business requires constant investment into new technologies and machines, and as such, their ratio is also not surprising. Atlantska Plovidba, the next company on the list, also operates in an asset-heavy (shipping) industry, where a lot of money is needed for the maintenance and purchase of new ships.
The last two companies, Podravka, and Atlantic Grupa, have net debt/EBITDA ratios of 0.77x and 0.62x, respectively. Both of these companies operate in the food production industry, so similar levels of indebtedness are to be expected. At the same time, this ratio is comparatively low, especially compared to their numbers several years ago, as keeping their net debt low allows these companies to make acquisitions, something that both of the companies have been keen on.
We also took a look at how much more debt these companies could take to reach 3x EBITDA because this point is considered something that most companies should not go over. Considering both Valamar Riviera and Arena Hospitality Group are already over this number, we excluded them from this list.
Potential Additional Debt (HRKm) to reach 3x EBITDA
Looking over to the capital structure of the observed companies, all of them are majority equity funded, which compared to 9M 2021, is 2 additional companies (Atlantska Plovidba, Valamar Riviera had 55.46% and 51.31% of debt in the capital structure, respectively). Ranking them by highest to lowest, Hrvatski Telekom has the most equity, at 100%, followed by Končar, with 90.45%, Podravka with 88.2%, Adris, with 84.5%, Ericsson NT with 82.86%, Atlantic Grupa with 79.57%, AD Plastik, with 68.21%. Arena Hospitality Group and Valamar Riviera stand at 50.17% and 51.54%, which is in line with the aforementioned industry they operate in.
Capital structure of CROBEX10 companies