Yesterday, the Slovenian Government published a draft of regulation on petroleum product prices, which keeps the same margin and calculation of prices of petrol for retailers. In this brief overview, we highlight the current situation and the main changes, as well as its effect on Petrol Group.

Yesterday, the Slovenian Government published a draft of the regulation of petroleum product prices, where it keeps the same margin and calculation of petrol prices for retailers. This regulation comes into force on 21 June 2023 and it would be valid for one year. The method for fuel calculation pricing stays the same and the margin for motor fuel is the same as before and it amounts to 0,0994 EUR/l (NMB-95).

The prolongation comes at a time when prices of Brent oil are down 32% YoY and they are more than 40% lower than their peak in March last year. Retailers like Petrol supply themselves with derivatives on the Mediterranean stock exchange. The prices of derivatives follow this trend of price decrease.

According to its business plan announced in January 2023, Petrol said that it expects petroleum product price regulation and the conditions in energy markets to continue in 2023. They also expected the growth to slow down and inflationary pressures to continue. Overall, the Group expects to generate sales revenue of EUR 10.2bn in 2023. Petrol plans to achieve mentioned sales revenue by selling 4.0m tons of fuels and petroleum products, 11.6 TWh of natural gas, 12.9m TWh of electricity (both trading and sales to end customers), 154.6 thousand MWh of heat, and by producing 188.4 thousand MWh of electricity. Consequently, Petrol plans its EBITDA to amount to EUR 250.4m and its net profit of EUR 117.1m in 2023.

On the other hand, the Croatian government has already increased fuel distribution margins on the 5th of June 2023, by increasing the maximum margin for motor fuel from 0,0995 EUR/l to 0,1245 EUR/l. In the formula determined by the Slovenian regulation, the partial cost of mixing the biocomponent is also included. In Croatia, this cost is not included and is covered directly from the margin so now this increase in margin should cover the cost of biocomponent and still top the Slovenian margin.

Brent oil fuel prices (2020 – 2023 YTD, USD/bbl)

Source: Bloomberg, InterCapital Research

Yesterday, Span shares went ex-date. When comparing it to the closing price yesterday, the stock decreased by 2%, which is slightly lower than the DY of 2.1%.

This refers to the previously approved dividend of EUR 1.33 per share or a dividend yield of 2.1%. On the market closing price yesterday, the stock declined by 2%, which is slightly lower than the dividend yield.

The payment date is set for 3 July 2023.

As a reminder, in FY 2022 Span recorded a very strong year. The top line noted a double-digit increase of 12% (even under Ukraine’s negative influence on this item), an EBITDA increase of 64.1%, and a bottom line increase of more than 2x. Further, Q1 results continued in a growth trend. We note that during 2022 company employed more than 200+ people and further growth is expected. Finally, we emphasize that Span acquired a leading Estonian company in licensing & SAM business segment, which should further boost upcoming results.

To put things in perspective, since the beginning of the year, Span’s share was by far the best-performing stock on ZSE and the most liquid one in the first quarter. Span’s share price increased by almost 70%, even after taking into account the mentioned decrease attributed to the ex-date – as without the dividend payment incentive for investors to invest in a stock vanishes.

At the share price before the announcement, this would imply a DY of 3.9%. The ex-date is set for 23 June 2023.

Yesterday, NLB’s General Shareholders Meeting was held. At the meeting, the distribution of profit was approved, in the amount of EUR 55m. This would amount to a gross dividend of EUR 2.75 on a per-share basis. Furthermore, at the share price before the announcement, this would imply a DY of 3.9%.

It should be noted that this is only the 1^st dividend tranche for 2023. According to the Company and its outlook, in the period from 2022-2025, they plan on paying out EUR 500m in the form of dividends. Furthermore, in 2023, they plan on paying out EUR 110m in the form of dividends, meaning that the current payment (EUR 55m) represents only half of the amount. As such, the 2^nd dividend tranche can be expected in autumn, and if approved, would imply a EUR 5.5 DPS, and DY of app. 7-8%.

Coming back to the currently approved dividend, the ex-date for it is set for 23 June 2023, while the payment date is set for 27 June 2023.

Below we provide you with NLB’s historical dividends per share and dividends yields.

NLB dividends per share (EUR) and dividend yields (%) (2019 – 2023)

Source: NLB, InterCapital Research

Yesterday, both Slovenian insurers on LJSE went ex-date. When comparing it to the closing price yesterday, Triglav decreased by 4.3%, which is fairly lower than the DY of 6.3%, while Sava Re decreased by 5.4%, which is also lower than the DY of 6.4%.

Taking a look at Triglav, this refers to EUR 2.5 DPS, which implied a DY of 6.3% at the price before the proposal. The total amount of dividends of EUR 56.8m will slightly exceed 50% of the Company’s consolidated net profit of the previous year. We note that the company has been a consistent dividend payer prior to the pandemic, paying out EUR 2.5 per share for 5 consecutive years (as visible on the graph below).

In the graph below, we are bringing you a historical overview of the company’s dividend per share and dividend yield. Note that the yields were calculated based on the closing price the day before the initial dividend proposal.

Dividend per Share (EUR) and Dividend Yield (%) (2014 – 2023)

Source: LJSE, InterCapital Research

Regarding Sava Re, this ex-date refers to a EUR 1.6 DPS, which implied a DY of 6.4% compared to the share price before the dividend proposal. Below we provide you with the historical dividends per share and dividend yields of the Company.

Sava Re dividends per share (EUR) and dividend yields (%) (2014 – 2023)

Source: Sava Re, InterCapital Research

Finally, we note that both Slovenian insurers were consistent dividend payers prior to the pandemic with only 2020 being an exception due to Government regulation.

Yesterday, Ericsson NT shares went ex-date. When comparing it to the closing price yesterday, the stock decreased by 2.8%, which is slightly higher than the DY of 2.5%.

This refers to the previously approved dividend of EUR 6 per share or a dividend yield of 2.5%. On the market closing price yesterday, the stock declined by 2.8%, which is slightly higher than the dividend yield.

The payment date is set for 11 July 2023.

As a reminder, in FY 2022 Ericsson NT recorded a 1.7% increase in the top line, an EBITDA decrease of 27%, and a bottom line decrease of 32.8% YoY. Further, a similar trend of lower profitability continued during Q1 2023.

In the graph below, we are bringing you a historical overview of the company’s dividend per share and dividend yield. Note that the yields were calculated based on the closing price the day before the initial dividend proposal.

To put things in perspective, since the beginning of the year, Ericsson’s share price decreased by 7.2%, while only 2.8% can be attributed to the ex-date – as without the dividend payment incentive for investors to invest in a stock vanishes.

Source: ZSE, InterCapital Research