During 2023, Končar D&ST recorded sales revenue growth of 37% YoY, while during Q4, the increase amounted to 46% YoY. EBITDA growth was even more significant, and amounted to 168% YoY in 2023, and 217% YoY in Q4. Finally, net profit amounted to EUR 57.9m in 2023, a 1.5x increase YoY, while in Q4, it amounted to EUR 27.5m, an increase of 127% YoY.
Yesterday, Končar D&ST, the most important subsidiary of Končar Group, published its FY 2023 results. According to the report, in 2023, sales revenue grew by 37% YoY and amounted to EUR 349m, while in Q4, it amounted to EUR 105.9m, an increase of 46% YoY. Končar D&ST further noted that in 2023, all the signed contracts amounted to EUR 678m, an increase of 92% YoY. Furthermore, by the end of the year (on the date of 31 December 2023), the backlog (all the signed contracts) amounted to EUR 623m, an increase of 116% YoY.
We would like to note that Končar D&ST does not publish detailed explanation for its financial results, as this is done on the Group (Končar Group) level. Still, as Končar D&ST is the largest subsidiary of the Group, the increase in demand for transformers and the amount of signed new deals is surely one of the largest contributing factors.
In terms of operating expenses, in 2023 they amounted to EUR 282m, an increase of 19% YoY, while in Q4, they amounted to EUR 73.5m, a 9% increase YoY. The largest increase came from material costs, which grew by 21% YoY to EUR 247.5m during 2023, and 5% YoY to EUR 54.7m during Q4. This was to be expected, as many industrial companies were hit with significant material cost growth in between 2022 and 2023, as the inflation in those categories was far more significant than inflation in consumer prices. However, as we can see on the Q4 basis, this largely slowed down in the latter part of the year.
Staff costs also grew, by 36% YoY to EUR 35.9m during 2023, and by 54% YoY to EUR 10m during Q4. This was under the influence of several factors, firstly the inflation which drove wage growth, but also due to the increase in the number of employees. In fact, by the end of 2023, the no. employees amounted to 1,142, an increase of 40% YoY. This was not only due to organic growth, but also due to inorganic one, as the Company bought an additional 35% stake in Ferokotao d.o.o., becoming the majority owner at 51% on 20 December 2023.
Despite the cost increases, the strong growth in revenue resulted in significant improvements to EBITDA. In 2023, it amounted to EUR 73.5m, an increase of 168% YoY, while in Q4, it amounted to EUR 33.9m, an increase of 217% YoY. This would also mean that the EBITDA margin improved as well, growing by 10.27 p.p. to 21.06% in 2023, and by 17.33 p.p. to 32.07% in Q4.
In terms of the net financial result, it amounted to EUR 276k in 2023, a 75% decrease YoY, and EUR 341.9k in Q4 2023, a decrease of 74% YoY. This came as a result of higher financial expenses as losses from FX were recorded, while financial income was roughly the same.
All taken together, this led to a net income of EUR 57.9m in 2023, an increase of 150% YoY, and EUR 27.5m in Q4, an increase of 127% YoY. This would also mean that the net income margin amounted to 16.6% in 2023, a 7.48 p.p. increase YoY, and 25.97% in Q4, an increase of 9.30 p.p. YoY.
Končar D&ST key financials (2023 vs. 2022, EURm)
Source: Končar D&ST, InterCapital Research
