Varteks 2019 Expectations and Call for Capital Hike

In 2019, Varteks expects to record an increase in operating revenues of 13.1%, record EBITDA of HRK 10.5m and a net loss of 2.8m.

Varteks published a document in which they stated their business plan for 2019. According to it, the company, the projected 2019 retail sales revenue is expected to increase by 29% YoY, amounting to HRK 69m. Further, operating revenues is expected to amount to HRK 176m, which represents an increase of 13.1%. The management believes that the increase will be resulted by the recent opening of new stores, new collections, increase in internal orders of key products (suits and coats) etc.

Varteks Operating Revenues (2015 – 2019e) (HRK m)

When observing the company’s expenses, they state that labor costs are lower due to decrease in administrative and management staff. However, the management notes that they have increased the minimal wage. In 2019, operating expenses are expected to amount to HRK 173.7m, which represents a decrease by HRK 11.4m (-6.2%).

Going further down the P&L, Varteks excepts to turn their negative EBITDA of HRK -20.2m to a positive one of HRK 10.5m, which would mark a positive EBITDA for the first time since 2015. EBT, however, remains negative, amounting to HRK -2.8m.

In 2019, the management projected a net loss of HRK -2.8m, compared to HRK -31.7 from 2018. The company also states that they expect a continuation of positive trends in the following years, as a result of an increase in retail sales, expansion of their portfolio etc.

Varteks EBITDA & Net Income (2015 – 2019e) (HRK m)

Besides that, Varteks notes that the company requires higher liquidity in order to introduce some new changes such as renewing the machinery, acquiring raw materials etc. Consequently, the company has published a document in which they have invited potential investors to participate in a capital increase of minimum HRK 10m.  The increase will take place under following the conditions: the increase amounts to at least HRK 10m, the price of the share is at least HRK 15.3 and that the price of a convertible bond is at least HRK 10.  

Category : Flash News

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