IC Market Espresso 11 Mar 2022

Cash Per Share of Croatian Blue Chip Companies – FY 2021

Today, we decided to give you an overview of the cash per share of Croatian blue chip companies.

Last month, Croatian companies published their preliminary FY 2021 results, so we decided to bring you an overview of their cash per share. This overview is done in order to see the strength of the balance sheet as well as the liquidity of these companies.

As a reminder, the cash per share metric measures how much cash a company has on hand, on a per-share basis. It is calculated by looking at the company’s total cash on its balance sheet, including short-term investments that can easily be turned into cash. Afterward, this number is divided by the number of shares outstanding, giving us the cash per share metric. This figure is useful for demonstrating a company’s ability to return money to its shareholders (either through dividends or buybacks), pay off its debts, etc.

Cash per share of Croatian blue chip companies (HRK)

Several things should be noted here. First of all, looking solely at cash per share of a company can give a misleading view into its financial strength, with no debt being taken into account with the figure. As such, looking at the company’s indebtedness should also be considered. To learn more about this, click here.

A high level of cash per share indicates the solid performance of the company, as well as giving some reinsurance that the company will be able to cope with any unexpected difficulties. Also, this metric as a number itself is not telling the whole story, as some companies might have more cash but also more shares outstanding, diluting the number. As such, looking at the cash per share as a percentage of the current share price gives a better overview.

Cash per share as a percentage of current share price (%)

As can be seen from the graph, the company with the highest cash per share as a % of their current share price is Adris, with 39.4%, followed by Valamar Riviera with 30.3%, Končar with 28.5%, Arena Hospitality Group with 25%, Ericsson NT with 22.6%, Atlantska Plovidba with 22%, and HT, with 19.3%. The higher level of cash per share, especially among the tourist companies (Adris, Valamar, Arena) can be attributed to strong tourist season and growth in operating cash flow. On the other hand, an increase in cash is a result of a lower level of investments caused by the pandemic and uncertainty due to the already high level of debt that tourist companies usually hold. Also, tourist companies continued to take on leverage as maturities of pandemic moratoriums came into force, or to finance further investments and improve the capital structure. In 2021, Valamar decreased its debt by 8% YoY, while Arena increased its interest-bearing debt by 12% YoY.

A similar situation is with other asset-heavy companies like Končar and Atlantska Plovidba. With the former, a higher level of cash is a result of an increase in cash flow from financing while in the latter it is a result of growth in cash flow from operations. On the other hand, Podravka has the lowest cash per share as a percentage of current share price, of 0.84%, preceded by Atlantic Grupa with 6.7% of cash as % of its current share price. Lastly, we look at the cash position of these companies. This includes both the cash as well as the short-term financial assets.

Cash position of Croatian blue chips (HRK)

Looking at the amount of cash these companies have, Hrvatski Telekom, Adris, and Valamar Riviera all have more than HRK 1bn of cash, at HRK 2.87bn, HRK 2.69bn, and HRK 1.16bn, respectively. On the other hand, AD Plastik and Podravka have the least amount of cash, at HRK 30.2m and HRK 33.3m, respectively.

Intereuropa FY 2021 Results

In 2021, Intereuropa recorded an increase in sales revenue of 17%, an EBITDA increase of 12%, and a net profit of EUR 6.7m, an increase of 88% YoY.

Intereuropa published its FY 2021 results this week. In it, we can see that the sales revenue of the Company amounted to EUR 176.7m, an increase of 17% YoY, and 11% relative to the plan for the year. This increase in sales is higher than the Company’s expectations in all three business lines, with the intercontinental transport segment recording the highest growth in absolute terms. In turn, this growth is a result of an increase in the volume of sales and growth in sea freight rates, as well as the increasing prices of air freight due to the lack of transport capacities. Other operating revenues also had an impact on the results, amounting to EUR 1.1m in 2021, due to the government aid to contain the negative effects of the pandemic.

EBITDA amounted to EUR 13.8m, an increase of 12% YoY and 6% higher than planned. One of the main reasons for this increase was the aforementioned other operating revenue increase.  At the same time, the cost of goods, materials and services increased by 21% YoY and amounted to EUR 131.4m. This increase was mainly driven by the growing energy prices. At the same time, labour costs increased 5% YoY and amounted to EUR 30.5m. Meanwhile, other operating expenses decreased by -13% YoY, and amounted to EUR 2.13m. Together, this would amount to an EBITDA margin of 7.8%, a decrease of 36 bps YoY.

Moving further down the P&L, the Company’s net profit amounted to EUR 6.7m, an increase of 88% YoY. This increase was due to the above-mentioned increases in revenue and EBITDA but also contributing to it, was one-off finance income in the amount of EUR 0.4m.

Looking over to indebtedness, Intereuropa’s net financial debt at the end of 2021 amounted to EUR 35.8m, a decrease of EUR 8.6m YoY. This would also mean that the Company’s net debt to EBITDA ratio improved to 2.6x, a 28% decrease YoY. The decrease in the net financial debt was a result of an increase in cash and cash equivalents, as well as a decrease in financial liabilities.

The Company also invested EUR 4.5m in property, plant and equipment and intangible assets in 2021. On the other hand, the Company sold obsolete assets for an amount of EUR 2.5m.