Yesterday, Luka Koper published a summary of its 2024 – 2028 Strategic Business Plan. In this overview, we bring you the main insights.
Luka Koper first noted that in the coming five-year period, Luka Koper’s mission will be to provide reliable, high-quality services in line with the guidelines of sustainable development, with the aim of becoming the first choice among the ports on the European southern transport route. This plan is based on four main points: firstly, increasing the infrastructure capacity and capability. Secondly, accelerating the introduction of the “Smart Port” concept. Thirdly, ensuring adequate staffing, and finally, taking care of sustainability aspects by reducing negative impacts on the environment and society. Luka Koper notes that the multi-purpose port model, one of the key competitive advantages of the Company, will also be maintained.
The Company’s key strategic objectives include growth in total operating revenue to EUR 413m by 2028, with an average annual growth rate of 6.6% in the 2023 – 2028 period. This would be achieved through gaining new commodity groups and customers in strategic/new markets, and by focusing the revenue structure on the higher value-added commodity groups. Also, the Group plans to increase the total throughput to 26m tonnes by 2028, with an average annual growth of 3.5% in the 2023 – 2028 period. Furthermore, it plans to achieve a throughput of 1.4m TEUs at the Container Terminal by 2028, meaning that the average annual growth should amount to 5.5% in the 2023 – 2028 period.
Luka Koper also noted that it aims at achieving an EBITDA margin of 29%, and a ROE of 9% (for the parent Company Luka Koper d.d.) in 2028. This is done to ensure long-term profitability. In order to achieve this, Luka Koper plans on investing EUR 785m over 5 years until 2028, in order to increase the port’s capacity and fluidity in order to be ready for the second railway line opening. Also, Luka Koper aims to obtain co-financing for investment projects, with a focus on the project to build an onshore electricity supply system for ships. Related to this, the Company also aims to develop the land outside the port area through a strategic partnership model.
Finally, Luka Koper aims to implement a digital transformation of key processes using new technologies, with the objectives of automation and optimization – Smart port, which will raise digital maturity by at least 1 level. This will allow the Company to achieve connectivity between all internal and external stakeholders in the logistics chain and increase cost-efficiency. The Company also aims to maintain environmental sustainability standards (EMAS) and meet sustainability reporting commitments, as well as to reduce the Company’s carbon footprint through measures aimed at improving energy efficiency and increasing the use of renewable energy sources.
In November 2023, the Croatian CPI growth amounted to 4.7% YoY, while it declined by 0.2% MoM, according to the flash estimate. We emphasize this is the first month to note a MoM decline in CPI.
Yesterday, the Croatian Bureau of Statistics released the flash estimate of the Croatian CPI growth, for the month of November 2023. According to the estimate, the Croatian CPI increased by 4.7% YoY, but it declined by 0.2% MoM. However, one has to note that CPI was already significantly elevated in the same period last year, amounting to a 13.5% growth YoY, marking the highest point of CPI growth. As such, the 4.7% YoY increase is more due to the effect of the high base, rather than the real and continued slowdown in inflation.
Croatian CPI YoY growth (February 2013 – November 2023, %)
Source: Croatian Bureau of Statistics, InterCapital Research
However, the MoM data is more encouraging, as it demonstrates that a slowdown in inflation has started to take place. Of course, a single month does not set a trend, and it will require several consecutive months to be able to conclude that the inflationary pressures have started cooling off.
Coming back to the estimate itself, on the annual basis, the estimated change for Food, beverages and tobacco is 7.4%, for Services it is 6.9%, for Non-food industrial goods without energy it is 4.8%, while on the other hand, prices in Energy declined by 3.4% YoY. Meanwhile, on a MoM basis, Non-food industrial goods without energy as well as Food, beverages and tobacco recorded 0.2% growth, respectively, while Energy decreased by 1.7%. Furthermore, prices in Services remained roughly the same.
Here we can also see a trend that has been prevalent for quite a while now. Due to the continued elevated energy prices, inflation spilled over to other categories. Inflation in Food, beverages and tobacco has been present almost from the start, while Services inflation is mostly tied to the fact that inflationary pressures on energy and food started all the way back in 2021 due to supply chain issues related to COVID-19 restriction, inflation in Services was subdued due to the lack of demand for them. This would of course mainly relate to tourism, the main service offered in Croatia, but also other affected industries by the pandemic, such as restaurants, cinemas, theatres, etc., which all recorded price hikes.
Next up, we can also look at the harmonized index of consumer prices, HICP, which allows us to compare Croatia to other European countries. In terms of overall Euro area inflation, it amounted to 2.4% YoY. For Croatia, annual growth amounted to 5.5%, while the monthly rate amounted to -0.4%.
Comparison of HICP change with available European countries (November 2023, YoY, %)
Source: Croatian Bureau of Statistics, InterCapital Research
As we can see in the yearly data, Croatia once again recorded the 2nd largest HICP, only behind Slovakia’s 6.9%. Slovenia meanwhile, recorded 4.5% growth, while other European heavyweights, such as Germany, France, Spain, and Austria, recorded inflation of 2.3%, 3.8%, 3.2%, and 4.9%, respectively.
Comparison of HICP change with available European countries (November 2023, MoM, %)
Source: Croatian Bureau of Statistics, InterCapital Research
In terms of MoM data, most European countries recorded decreases, with the largest one being Malta at -2.9% MoM, as well as the Netherlands and Cyprus, both at -1.5%. Slovenia recorded a 0.8% decline, while Germany, France, Spain, and Austria recorded -0.7%, -0.3%, -0.6%, and 0.2% MoM HICP, respectively.
During November 2023, Slovenian CPI growth amounted to 4.9% YoY, but it also recorded a decline of 1% MoM, according to the Slovenian Statistical Office. We would like to point out that this is the first month in a long time that Slovenian CPI recorded a MoM decrease.
Yesterday, the Slovenian Statistical Office (SURS) released the latest CPI numbers for Slovenia, for the month of November 2023. According to the report, the Slovenian CPI growth amounted to 4.9% YoY, while it declined by 1% MoM. The 1% MoM decrease in inflation is especially positive news, as this is the first month in a long time that Slovenian CPI has recorded a decrease, signaling that inflation might have started cooling off. However, several consecutive months of inflationary decreases will be needed to know for sure if this is a one-off event or the start of a trend.
Slovenian CPI change (January 2011 – November 2023, YoY, %)
Source: Slovenian Statistical Office, InterCapital Research
Breaking this growth down to its components, on an annual basis, service prices grew by 7.4%, and goods prices by 3.6%. Inside this category, non-durable goods prices increased by 4.7% YoY, semi-durable goods by 2.3%, while durable goods grew by 0.6%. Meanwhile, food and non-alcoholic beverages recorded a 6.2% increase, contributing 1.1 p.p. to the annual CPI growth, the 6.7% higher prices of goods and services in the group recreation and culture contributed 0.7 p.p. to the growth, and finally, an 8.4% higher prices of restaurants and hotels contributed 0.6 p.p. to the annual CPI growth. On the other hand, the prices of solid fuels declined by 26.4% YoY, pushing the overall inflation down by 0.4 p.p. YoY.
Meanwhile, on a MoM basis, the largest impact on the 1% MoM deflation came from lower prices of electricity, which declined by 18.8%, as a result of the exemption from paying the OVE (renewable energy sources) and SPTE (cogeneration of heat and electricity) contribution. Furthermore, prices of solid fuels declined by 8.7% MoM, accommodation services by 4.2%, diesel and liquid fuels by 2.4%, petrol by 2.2%, health by 2.1%, and package holidays by 2%, combined with all other price decreases in November. On the other hand, fruit prices grew by 3.1%, different recreational items and equipment by 2.4%, tobacco by 2.2%, and footwear, by 0.8%. This contributed 0.1 p.p. to overall inflation.
In terms of the harmonized index of consumer prices, it grew by 4.5% YoY in November 2023 (November 2022: 10.8% YoY), while it declined by 0.8% MoM in November 2023 (October 2023: +0.3% MoM). On average, service prices went up by 7.1%, while goods prices increased by 3.2%. In the goods category, Non-durable goods prices increased by 4.4%, semi-durable goods prices by 2.3%, and durable goods prices decreased by 0.4% MoM. As compared to the European Monetary Union countries, where the average inflation was 2.9%, Slovenia is clearly above the mark. Furthermore, as compared to Croatia, Slovenia recorded 1 p.p. lower inflation in November 2023, as Croatia recorded an HICP of 5.5% YoY.