In 9M 2023, Končar D&ST reported sales revenue growth of 33.3% YoY, EBITDA growth of 2.7x, and a net profit of EUR 30.4m, an increase of 2.8x.
Yesterday, Končar D&ST, a Končar subsidiary published its 9M 2023 results. According to the report, in the 9M 2023, sales revenue increased by 33.3% and amounted to EUR 244.9m. Of this, the vast majority (90.5%), or EUR 220.5, is sold abroad, while the domestic market accounts for the remaining 10%, or EUR 24.8. The sales abroad increased by 35.4% YoY, while domestic sales increased by 25.3% YoY. The main driver of this sales growth was the sales in the transformer segment.
Moving on to costs, OPEX amounted to EUR 208.5m in 9M 2023, which represents an increase of 23.5% YoY. The main driver of this was the increase in material expenses, which increased by 26% YoY to EUR 192.7m (more than 90% of total OPEX). Staff expenses increased by 30% YoY to EUR 25.9m. This is the trend we have seen across many companies and sectors and is to be expected, given the increase in prices of commodities, energy, and of course, the overall inflation rate. In regards to staff costs, in 9M 2023, Končar D&ST employs 841 employees, which is an increase of 4.5% compared to the same period last year. As such, higher staff costs were both a combination of higher salaries offered, but also of the higher number of employees.
Given this situation, the EBITDA increased by as much as 2.7x to EUR 36.4m. This would imply an EBITDA margin of 15.4% during the first nine months, representing an increase of 7.7 p.p. YoY. However, we emphasized that EBITDA growth during 9M if mainly driven by the Q3 results. Group’s EBITDA amounted to EUR 17.3m (from EUR 4.5m in Q3 2022). In other words, Končar D&ST achieved almost half of its 9M EBITDA only during the last quarter.
Both financial income & financial expenses for the period amounted to c. EUR 2m, driven by FX differences in this period. As such, the net financial result amounted to just a slight non-material loss. This would mean that the EBT amounted to EUR 36.3m. Given the higher EBT, the tax also increased to EUR 5.9m (from EUR 2.5m). Finally, the net income amounted to EUR 30.4m, an increase of as much as 2.8x! This would imply a net profit margin of 12.9%, an increase of 6.7 p.p. YoY.
Končar D&ST key financials (9M 2023 vs. 9M 2022, EURm)
Company data, InterCapital Research
Končar D&ST also commented on the main risks to the business. During the first three quarters of this year, next to the obvious higher interest rates affecting borrowing effect, company emphasize the instability of supply chains. This resulted in longer procurement period in terms of some components.
Končar D&ST key financials (Q3 2023 vs. Q3 2022, EURm)
Company data, InterCapital Research
Consequently, we decided to present you KODT (pref.) share price YTD development, compared to CROBEX itself, where a company is included. Share price developed outperformed CROBEX on the back strong results achieved both in FY 2022 and in 9M this year, so far.
KOTD (pref.) share price & CROBEX YTD development
Company data, InterCapital Research
