For today we decided to look at EBITDA and net profit margins of Croatian companies, for which we used Q1 2020 figures.
It is important to note that comparing the margins across the selected companies is not necessarily the best way to do the comparison as many companies operate in different industries. Since both EBITDA and profit margin reflect to a great extent the industry in which the company operates in, we advise to compare it to the peer average or median. Nevertheless, it is still worth seeing which Croatian companies are more profitable and therefore have more “room” to potentially reduce the prices of their goods or services if needed, while still remaining a higher level of profitability.
Besides that, looking at only Q1 margins might lead to misleading conclusions as some of the observed companies derive most of their earnings in other quarters. Therefore, you can find trailing 12m EBITDA and profit margins at the bottom of this blog.
Q1 – EBITDA margin of Selected Croatian Companies (%)
In Q1, two Telecoms – HT and Optima Telekom recorded the highest EBITDA margin of 39.2% and 35.2% respectively, which does not come as a surprise given the industry they operate in. Next comes AD Plastik with 17.3%. 3 food companies follow – Podravka, Atlantic Grupa and Kraš, with EBITDA margins of 14.9%, 14% and 11.1%, respectively.
On the flip side, Valamar Riviera and Arena Hospitality Group both recorded negative EBITDA and profit margins. However, one must note that this is not necessarily representative, as these companies derive most of their earnings in Q3.
Q1 – Profit margin of Selected Croatian Companies (%)
Turning our attention to the profit margins, HT once again leads the list with 8%, followed by AD Plastik with 7.8%. Podravka and Atlantic follow with a profit margin of 7.6% and 6.9%, respectively.
On the filp side, 4 of the observed companies recorded a negative profit margin (net loss). Besides above mentioned Valamar and Arena Hospitality, Optima Telekom and Dalekovod recorded a net loss in Q1. As a reminder, both companies recorded a net loss mostly on the back of net FX loss which came as a result of the depreciation of HRK to EUR.
If you wish to compare EBITDA and net profit margins of these companies to their regional sector peers, you can do so by looking at our daily trading multiples which can be found here.
EBITDA and Profit margin of Selected Croatian Companies (%) (Trailing 12m)
The European Commission published information on the approval of the guarantee of the Republic of Croatia in favor of the Company, by the EC.
Đuro Đaković published an announcement on the Zagreb Stock Exchange stating that the company received an approval of the guarantee of the Republic of Croatia, by the European Commission, approving state aid in the amount of EUR 40m.
As a reminder, the company did not yet publish their Q1 results due to the impact of the COVID-19 pandemic on organization and business conditions of the Company. Q1 results are expected to be published by 31 May 2020 at latest.
To read more about Đuro Đaković, click here.