For 2021 Petrol plans to generate sales revenue of EUR 3.5bn, gross profit of EUR 490m, EBITDA of EUR 213.5m and net profit of EUR 104.4m. The targets are ambitious and conditional upon pandemic being effectively contained through vaccination in the first half of 2021.
On Friday, Petrol Group published their 2021 business plan. The management board believes that their 2021 targets are ambitious and they have assumed that the pandemic will be effectively contained through vaccination in the first half of 2021.
In 2021 the Petrol Group plans to generate sales revenue of EUR 3.5 billion and gross profit of EUR 490.0 million which will be a result from selling of 3.0m tons of petroleum products, 171.7th tons of liquefied petroleum gas and 25.6 TWh of natural gas. Sale of merchandise, the part that experienced the slightest drop in 9M 2020, only 3%, will continue to be important revenue generator and is expected to total EUR 446.2m. Electricity production, trading and sales and energy and environmental services are other important revenue generating segments.
The Petrol Group’s EBITDA is planned to amount to EUR 213.5 million in 2021. This would imply EBITDA increasing 8% compared to 2019 level and to be app. 50% higher than where we see EBITDA in 2020. Net profit is planned to amount to EUR 104.4m, which is 1% below 2019 level, and could imply doubling of 2020 profit.
Petrol pointed out that this business plan does not take into account any potential acquisitions, while they state that the Group’s investment policy for 2021 will be focused on expanding the business in the area of renewable electricity production. Growth will also be based on consolidating its position and expanding energy product sales and on expanding its operations in the area of energy and environmental solutions. The Group also announced that it is expected to have its net debt/EBITDA ratio at 1.5x. Piecing this information together we can expect not to see major M&A activities in the following year as RER investments are usually projects of smaller scales. Net debt at the end of 9M 2020 it stood at EUR 305m and at the end of 2021 similar level is expected so we do not expect Petrol to put up more leverage in 2021 which means that investments in business will be in majority financed from operating cash flow.
Even though the plan is quite ambitious the company outlined few disclaimers where they see uncertainty in the near period. They have high influence on the achievement of the 2021 business plan and are the following:
· further course of pandemic that should be completely sustained by the beginning of second half of 2021 and the measures for containment should not be in place further than then;
· sales in the EU market, which they see as extremely volatile;
· impact of the Real Property Tax Act and its new valuation model;
· impact of the Energy Savings Requirements Act in Croatia;
· other regulatory requirements.
