With the plethora of reports published last week, we left Plava Laguna for today not to be drowned among others. The tourism Group reported solid improvements on all lines, helped by investments which enabled higher pricing, better financial arrangements resulting in lower interest expenses and tax incentives.
In 2018, Plava Laguna had 4.8m overnights altogether (-1.1%), out of which 2.5m in hotels (-2.5%) and 2.3m in car camps (+0.5%). Despite a lack of volume growth, average prices were up by 4.0% in hotels and 7.1% in car camps. Consequently, sales were up by 2.6% to HRK 1.1bn (+28m). There was also a one-off positive impact related to sales of assets booked under other operating revenue (+8m). Summed up, total operating revenue was up 3.5% to HRK 1.1bn.
EBITDA margin was somewhat improved (from 39.9% to 41.5%), and the absolute amount of EBITDA increased by 9.3% to HRK 467m (+40m). Among individual items, staff cost increased most (by HRK 4.5m or 1.8%) but this is actually less than what we would have expected, taking into account the difficulties Croatian tourism companies face finding workers. The share of staff costs in sales remained flattish (22.4% vs 22.6% in 2017). Management’s communicated EBITDA amounts to HRK 447m (+4.7%).
Plava Laguna booked a HRK 46m increase in D&A costs (+28%), but this can be attributed to changed depreciation policy in the recently merged Istraturist alongside with the effect of investments. Solely due to this reason, EBIT is down 2.3% to HRK 255m (-6.0m).
Further down the P&L, we see three more positive items:
- Net financial expenses are down by HRK 55m to HRK 5.3m (a positive effect of HRK 7m), mostly attributable to lower interest expenses.
- Profit from associates is up by 50% to HRK 28.5m (a positive effect of HRK 9.5m). This related to Adriatic Luxury Hotels.
- Tax was down by almost 100% (a positive effect of HRK 42m) as Plava Laguna booked tax incentives related to investments made in 2018 and planned until 2020.
2018 CAPEX amounted to HRK 483m (EUR 60m), up by 180% YoY and touching the highest value in the Group’s recent history.
Net debt is up by 67% to HRK 483m, but we believe the 1.04x net debt / EBITDA looks very good.