Last week, we attended the annual conference organized by the Belgrade Stock Exchange where we had the opportunity to meet with some blue-chips and also a couple of companies we do not get to meet often from Croatia, Slovenia, Serbia and Macedonia. Here we bring you an overview of our meetings.
The companys we met with were:
- Atlantic Group – to read our takeaways from this meeting click here.
- Arena Hospitality Group – to read our takeaways from this meeting click here.
- NLB Group – to read our takeaways from this meeting click here.
- Naftna Industrija Srbije (NIS) – to read our takeaways from this meeting click here.
- Metalac – to read our takeaways from this meeting click here.
- Komercijalna Banka Skopje – to read our takeaways from this meeting click here .
In the 9M of 2019, Electrica recorded an increase in sales of 15%, a decrease in EBITDA of 22% and a decrease in net profit of 48.9%.
In the first nine months of 2019, Electrica recorded revenue of RON 4.6bn, representing an increase of 14.9% YoY. Of that, electricity distribution and supply observed an increase of 16.3% and now accounts for 86.7% of the operating revenues. Such an increase of revenues could be attributed mostly to increase of RON 599.6m on the supply segment, which was partially offset by lower external revenue, as the electricity and gas sales towards third parties decreased by RON 65.5 m.
When observing operating expenses, in the first 9M of 2019, Electrica witnessed an increase of 21% YoY, amounting to RON 4.53bn. Of that, when looking at electricity purchased, one can notice a sharp increase of 31.8%, amounting to RON 2.45bn. Such a result could be attributed mainly to the rise in the electricity purchase prices in 9M 2019, compared with the same period of the previous year, being the effect of the electricity market evolution – experienced both in the supply and distribution segment, but also by the increase of the quantity of electricity purchased on the supply segment.
The cost of Green certificates amounted to RON 384.97m, which represents an increase of 48.9%. The increase was mainly influenced by higher supplied volumes (for which there is an obligation to purchase green certificates), 1.27% increase in the average purchase price to RON 136.5/GC. In the same period, the costs related to concession agreements increased by RON 22.7m (+4.6%), to RON 515.2m. This increase is attributable to the realized investments related to the Regulated Asset Base.
As a result of the above mentioned, EBITDA recorded a decrease of 22.1%, amounting to 549.4%. Such a result puts the EBITDA margin at 12% (-6 p.p. YoY). The operating profit as of 9M 2019 is of RON 193.7m, posting a significant decrease of 46.9% YoY, mainly due to the electricity prices recorded in 2019 increasing, as above-mentioned.
In the first nine months of 2019, Electrica recorded a net profit of RON 160.9m, representing a decrease of 48.9%.
Turning our attention to CAPEX, in 9M 2019, the 3 distribution companies of Electrica Group realized and commissioned investments amounting to RON 381.8 m, representing 56.9% of the commissioning program value planned for 2019. The values achieved in 9M 2019 show a 3.8% YoY increase.
In the first nine months of 2019, the company recorded an increase in sales of 22.7%, increase in EBITDA of 69.1% and an increase in net profit of 51.8%.
In the first nine months of 2019, MedLife recorded an increase in sales of 22.7% YoY, amounting to RON 711m. Such an increase was mainly the result of significant growth in almost all of the Group’s business lines, led on a percentage basis by Clinics, Hospitals and Laboratories, as well as the impact of the acquisitions completed by the Group in 2018 and 2019. Of the total sales, Clinics segment accounts for 30%. Next come Hospitals and Corporate segment with 23% and 19% respectively.
When observing operating expenses, MedLife recorded RON 672m, representing an increase of 20.9%. The increase is mainly linked to overall business increase. As a result, third party expenses increased by RON 42.55bn (+28.4%), salary and related expenses increased by RON 38.4m (+21.7%), while depreciation recorded an increase by RON 27.4m (+64.4%).
As a result of the improved topline, the company observed a strong increase in EBITDA of 69.1%, amounting to RON 118.8m. Such a result puts the EBITDA margin at 17.1% (+5 p.p. YoY). Meanwhile, operating profit amounted to RON 43.82m amounted to RON 43.82m, showing a strong increase of 57.6%
Going further down the P&L, financial result increased by 112.5%, amounting to RON -19.3m. Such an increase in net financial loss could be mostly attributed to higher net loss from FX impact.
In the first nine months of 2019, the company recorded a net profit of RON 19.4m, representing an increase of 51.8% YoY.
As above mentioned, MedLife’s growth partially stems from their high acquisition activity. As a reminder, MedLife reached a portfolio of 26 acquired companies, with Micromedica Medical Center being the latest one, which was announced earlier this month.
In the first nine months of 2019, Transelectrica recorded a decrease in sales of 3% YoY, decrease in EBITDA of 12% and a decrease in net profit of 25%.
As Transelectrica published their 9M 2019 results, we are bringing you key takes from the report. According to the it, in the first nine months of 2019, the total quantity of electricity charged for services provided on the electricity market (41.29 TWh) registered slight 0.1% YoY increase.
Operating revenues in 9M amounted to RON 1.78bn, representing a decrease of 3% YoY, while the amount is 10% lower than planned. Such a decrease is mainly due to lower operational revenues associated to the zero profit activities (technological system services and the balancing market). The segment of profit allowed activities registered a 6% revenue increase, amounting to RON 907m. The increase came on the back of the growth of the tariff valid in the reporting period. On 01.07.2019 the tariffs approved by ANRE under Order 81/24.06.2019 came into force.
Total operational expenses registered slight drop of 1% YoY, amounting to RON 1.69bn. Meanwhile, the amount is 14% lower than the planned one. The mentioned decrease came mostly from a drop in Balancing market expenses by RON 93m (-19% YoY), which was partially offset by higher system operating expenses by RON 56m (+26%).
As a result of the lower topline performance, the company witnessed a 12% decrease in EBITDA, which amounted to RON 299m. Such a result puts the EBITDA margin at 16.8%.
Going further down the P&L, operating profit, amounted to RON 89m, which is a drop of 22% YoY. However, note that this result is above the planned one by RON 78m (due to lower operating expenses). In 9M of 2019, the company recorded a net profit of RON 74m, representing a decrease of 25% YoY.
Turning our attention to CAPEX, in the first nine months of 2019, Transelectrica recorded total investments by RON 164.4, representing an increase of 38% YoY. This figure puts the company at 57% of the achieved investment plan for 2019.
In the 9M of 2019 Transgaz recorded a decrease in sales of 1% YoY, a decrease in operating profit of 27.6% and a decrease in net profit of 25.1%
As Transgaz published their 9M 2019 results, we are bringing you key takes from the report. According to it, operating revenue before the balancing and construction activity decreased by 1% YoY, amounting to RON 1.09bn. Of that, revenue from the domestic transmission activity accounts for 72.9%. The mentioned decrease mostly came on the back of commodity component revenue lower by RON 35.1m, as the commodity transmission tariff was lower by Lei 0,47 lei/MWh.
When observing operating expenses, they observed an increase of 11.4% or RON 85.9m. Such an increase could mostly be attributed to a rise in other operating expenses by 63% or RON 46.1m. Of the other operating expenses, the item loss on impairment of receivables amounted to RON 65.4m, representing an increase of RON 46m YoY.
Revenue from the balancing activity amounted to RON 250.9m, which represents a sharp increase of 111% YoY. Such an increase could be mostly attributed to higher quantity by 1,133,839 MWh. Revenue from the construction activity amounted to RON 521.4, showing a high increase of 376% YoY. However, note that higher registered revenue is in line with IFRIC 12, according to which revenue and costs related to the construction activity or the improvement of the transmission network, in exchange of which the intangible asset is registered, must be acknowledged in line with IAS 11, Construction Contracts.
Going further down the P&L, as a result of all above mentioned, operating profit witnessed a decrease of 27.6%, amounting to RON 244.5m. Meanwhile financial result amounted to RON 20.8m (+12%), which boosted the bottom line. The increase mostly came from the FX gains.
In 9M 2019, Transgaz recorded a net profit of RON 224.7m, representing a decrease of RON 25.1%.
Turning our attention to CAPEX, as of end of Q3 2019, capital expenditures amounted to RON 626.84m, of which RON 4.9m are NTS connection installations under the NTS access rules approved by ANRE Order 82/2017.