Today, we decided to bring you a brief overview of the cash per share of Croatian blue chips companies, based on the H1 2022 results.
As the Croatian and Slovenian companies have recently published their H1 2022 results, we decided to bring you an updated cash per share analysis of the Croatian blue chip companies. First of all, what is cash per share? Cash per share is a measure that divides the currently available cash and cash equivalents of a company, by its total number of listed shares (minus the treasury shares a company holds). This measurement is made in order to test the strength of a balance sheet of a select company, but also to see how liquid that company is. It can also give us a better insight into a company’s strength in returning money to shareholders (through, for example, dividends or share buyback programs), how able they are to pay down their debt, etc. It should be noted that financial companies are excluded from this measurement, as a part of their cash is not theirs, but of their customers. For this reason, Adris (which consolidates Croatia osiguranje, and Croatia contributes a lot of cash to Adris) has been excluded.
It should also be noted that looking at solely the cash per share of a company can be misleading, because it does not take into account a company’s debt levels (indebtedness), and as such, does not give a complete picture of a company.
Cash per share of Croatian blue chips (H1 2022 results, HRK)
As can be seen from the comparison above, Ericsson NT holds the largest amount of cash per share, at HRK 366/share. Following them, we have Končar, at HRK 245/share, and Atlantska Plovidba, at HRK 153/share. These high levels of cash per share indicate that the company is performing well, and also show that these companies will have enough liquidity to cover any potential difficulties. Moving on, we have Arena Hospitality Group, at HRK 38/share, Atlantic Grupa with HRK 37/share, and HT, with HRK 34.2/share. On the other hand, Valamar Riviera and AD Plastik are the only ones with a cash per share lower than 10, at HRK 8.9/share and HRK 7.3/share, respectively. Of course, looking at this number by itself does not tell us much, as it’s a function of both the available cash and cash equivalents, but also of the number of listed shares. Looking at it this way, we can see a similar, but a bit different story.
Cash as a % of the current share price of Croatian blue chips (H1 2022 results, %)
Atlantska Plovidba still leads the way, with cash as 36% of the company’s share price, followed by Končar, at 28%, and Valamar Riviera and Končar, each with 23%. Here we can see the 1st problem with looking at the cash per share at face value. For example, Valamar Riviera, which has the lowest available cash per share, has a high amount of cash as a percentage of the current share price. The main difference here is in the number of listed shares; while Končar has 2.57m listed shares, Atlantska Plovidba 1.39m, and Ericsson NT 1.3m, Valamar Riviera has 126m. Lastly, however, we should also look at the available cash, as only then will we have the full story.
Cash and cash equivalents of Croatian blue chips (H1 2022 results vs. YE 2021, HRK)
As we can see, HT has the largest amount of available cash, at HRK 2.69bn, which if we compare it to the year-end (YE) of 2021, is a decrease of 6%. Following them, we have Valamar Riviera, with has HRK 924.5m of available cash, a decrease of 17% compared to YE 2021, and Končar, at HRK 642.8m, an increase of 52% compared to the YE 2021. On the flip side, AD Plastik has HRK 37.3m of available cash, Arena Hospitality Group HRK 195.1m, while Atlantska Plovidba has HRK 214.2m.
So what can this data tell us? Firstly, the Croatian companies are maintaining quite high levels of available cash, which in the current macroeconomic situation is expected. At the same time, comparing these companies between each other, at least when it comes to their overall available cash (and thus available cash per share), is not that advisable, as these companies operate in different industries, have different investment strategies, have different dividend payout ratios, some have share buyback programs, other don’t.. etc.
In H1 2022, Transgaz recorded a slight revenue increase of 0.44% YoY, EBITDA decrease of 15.11%, and a net profit of RON 177.2m, an increase of 33% YoY.
In H1 2022, Transgaz recorded operating revenue before the balancing of construction activity of RON 703.9m, an increase of 0.4% YoY. The revenue was influenced by several factors: an increase of RON 11.1m in commodity revenue, due to booking capacity being higher by 13%, and other operating revenues increased by RON 24.7m.
Revenue from the balancing activity was higher by RON 398.4m (+280.5% YoY), due to a higher trading price of RON 309.03/MWh, which had a positive impact of RON 337.4m. Besides higher trading price, revenue growth was further amplified by a higher volume, which increased by 327,953 MWh which had a positive influence of RON 61m. Moving on, revenue from construction activity was lower by RON 241.5m.
OPEX was higher by 17.1% YoY influenced by the following factors. First, savings of RON 37m, from other operating costs, mainly due to the decrease in the impairment of current assets, following the collection of outstanding receivables from Electrocentrale București. Second, there has been a surplus of RON 134.4m in the transmission system gas consumption, provisions for risks and charges, employee costs, and cost of depreciation, which somewhat offset the OPEX growth.
With the increase of OPEX and roughly similar revenue levels, the company’s EBITDA amounted to RON 243.5m, a decrease of 15.1% YoY. Financial revenue amounted to RON 295m, an increase of 386.4% YoY, due to the recording of an update of regulated assets value with the inflation rate for H1 2022, as well as revenue from shareholdings following the reduction Eurotransgaz’s share capital by EUR 13.2m, which was received during Q1 2022. Financial costs amounted to RON 102.6m, an increase of 378.8% YoY, mainly because of the cost of financial fixed assets being transferred.
Finally, because of these developments, net profit amounted to RON 177.2m, an increase of 33% YoY.
Transgaz key financials (H1 2021 vs. H1 2022, RONm)
Balance Sheet
Looking over the balance sheet, total assets amounted to RON 7.9bn, a decrease of 1.6% YoY. This was driven by the decrease in current assets, which amounted to RON 1.1m (-17.6% YoY). On the other hand, total liabilities increased by 23.8% YoY and amounted to RON 1.9bn, as a result of an increase in total long-term loans (22.9% YoY, amounting to RON 1.8bn), and total short-term loans (36.4% YoY, amounting to RON 130.1m).