For today we decided to present you with ROE and capital structure of selected SBITOP constituents.

For this analysis, we used Q2 2022 balance sheet numbers with trailing P&L items to get to the most consistent conclusions. One thing that is important to point out is that comparing the ROE or capital structure across the selected companies is not necessarily the best way to do the comparison, considering that many companies operate in different industries. Even so, it is worth seeing which Slovenian companies are more profitable and therefore have a better position in managing their prices and services (reducing costs, increasing prices of goods/services) thus increasing their ROE – and which are not. It should also be noted that financials (Triglav, Sava Re, and NLB) were excluded from the comparison regarding capital structure due to the nature of financial companies and their balance sheet.

ROE of Selected Companies (H1 2022)

Among the selected companies, Cinkarna Celje recorded the highest ROE of 20.8%, which is particularly interesting as the company is 100% equity funded. Also, consequently, the company operates with a high negative net debt. Cinkarna’s H1 2022 results boosted the company’s ROE as sales grew by as much as 35% YoY, achieving an above-average return on equity compared to the company’s history. Higher sales resulted in higher profitability. Growth in ROE was boosted by higher profitability achieved by Cinkarna, which came on the back of higher sales. Sales were purely driven by supporting the economic situation regarding the Titanium Dioxide segment. NLB comes next with ROE of 16.5%. NLB managed to significantly boost its bottom line mostly due to negative goodwill coming from the Sberbank (Slovenia subsidiary) acquisition of EUR 172.8m in first quarter, thus improving its ROE.  At the bottom of the line, Telekom Slovenije reported ROE of 6.7%, followed by Petrol with ROE amounting to 8.5% and Luka Koper with 12% ROE.

Capital Structure of Selected SBITOP Constituents

We also took a look at the capital structure of the observed companies. Financials were excluded for the sake of comparison, due to the nature of their balance sheet and financing structure. Cinkarna Celje leads the way with 100% equity. The company, besides operating with high operating profitability, has a strong financial position – the company virtually operates debt-free. Cinkarna is followed by Krka with 99.5%, Luka Koper with 85.2%, Petrol and Telekom Slovenije with 59.5% and 57.8% financing through the capital, respectively.