In 9M of 2020, the company recorded an increase in sales of 8.7%, an increase in EBITDA of 32.4% and an increase in net profit of 37.1%
As Končar D&ST, a part of the Končar Group, published their 9M 2020 report, we are bringing you key takes from it. According to the report, in the first nine months of 2020 the company recorded sales of HRK 813.1m, representing an increase of 8.7%. We note that the company did not provide almost any comments on their 9M performance, however one should note that the company increased its stake in Power Engineering Transformatory (PET) by 26% in Q2. This way Končar D&ST increased its stake in PET to 100%. As a reminder, PET is a Polish manufacturer of power transformers from 6,3 to 63 MVA and up to 145 kV .
The Management Board stated that they assess that the general condition of the Group as stable, while they are continuously carrying out activities of streamlining of business, cost reduction, contracting new business in general to raise the competitive advantages of the Končar D&ST on the market.
Turning our attention to operating expenses, they amounted to HRK 827.35m, which is an increase of 8.7%. Such an increase could mostly be attributed to higher material costs by 12.5% or HRK 77.9m, which was partially offset by changes in the value of inventories of work in progress and finished goods which amounted to HRK -42.3m.
As revenue growth outpaced the growth of operating expenses, EBITDA is up by as much as 32.4% to HRK 62.58m. Such a result notes an improvement of the EBITDA margin by 1.3 p.p. YoY to 7.3%. Meanwhile, operating profit is up by 30.9% (or HRK 10m) and stands at HRK 42.4m.
Going further down the P&L, the company witnessed somewhat lower net financial loss of HRK -49k, compared to HRK -115k in 9M 2019.
In 9M of 2020 Končar D&ST noted a net profit of 34.57m, representing an increase of 37.1%. Such a result puts the profit margin at 4% (+0.8% p.p. YoY).
Looking at CAPEX, in 9M the company invested HRK 34.53m compared to HRK 70.4m in the same period of the previous year. The company added that the finalization of the planned investment in increasing the production capacity of distribution transformers is in place, while its completion is expected in Q4 of this year.
