In October 2023, the total equity turnover on the LJSE increased by 20% MoM, and declined 14.2% YoY. During the same period, the SBITOP recorded a slight 0.8% decrease MoM, ending at 1,165.00 points. On a YTD basis, SBITOP increased by 13.2%.

Yesterday, the Ljubljana Stock Exchange, LJSE, published its latest monthly trading activity report, for the month of October 2023. According to the report, the total equity turnover on LJSE amounted to EUR 22.2m, representing an increase of 20% MoM, and a 14.2% YoY decline. In terms of the average daily turnover, it amounted to EUR 1m during the month. Moving on, SBITOP recorded a slight decrease of 0.8% MoM and ended at 1,165.00 points. Meanwhile, SBITOP TR ended the month at 1,555.65 points, with the same 0.8% MoM decrease.

Monthly equity turnover on LJSE (January 2022 – October 2023, EURm)

Source: LJSE, InterCapital Research

In terms of the most traded stocks, leading the way is Krka with a turnover of EUR 7.6m, representing 34.3% of the total equity turnover. Next up, there is NLB at 4.5m, or 20.2% of the total, Telekom Slovenije at EUR 2.3m, or 10.1%, and Luka Koper, at EUR 2.2m, or 10.1%. Finally, there is Sava Re, at EUR 1.5m (or 6.8% of the total). This would also mean that the top 5 most traded stocks accounted for 81.5% of the total equity turnover, while the top 10 stocks accounted for 95.6% of the total, which is in line with historical shares of total equity turnover in Slovenia.

Moving on to the performance of the SBITOP constituents during October, 4 out of 9 companies recorded an increase, while the remaining 5 recorded negative returns. The biggest gain was recorded by Telekom Slovenije with a double-digit increase of 12.4%, followed by Cinkarna Celje at 5.8%, Petrol at 1.7%, and NLB, at 1.1%. On the other hand, the largest decrease was recorded by Sava Re at 4.7%, followed by Krka at 4.1%, and Triglav with 3% decline. We note that Slovenian insurers were under selling pressure as Triglav and Sava Re, both cut their FY 2023 profit target due to unprecedently high CAT claims, which will be seen in Q3 published by this month-end.

Performance of SBITOP constituents (October 2023, MoM, %)

Source: Bloomberg, InterCapital Research

Meanwhile, on a YTD basis ending in October 2023, the gains recorded are a lot more positive with overall SBITOP’s double-digit return amounting to 13.2%. Out of the observed companies, 7 recorded increases, while only 2 recorded negative returns. The largest increase was recorded by NLB, at 21.8% YTD, boosted by the latest trading days on the back of solid Q3 results published recently. NLB is followed by Luka Koper at 21.4%, Telekom Slovenije at 19.6%, and Petrol at 18% also on the back of good Q3 results that showed stabilization and growth in Petrol’s operating margins.  On the flipside, Equinox declined by 2%, while Triglav noted the biggest decline of 14.8%.

Performance of SBITOP constituents (2023 YTD ending in October 2023, %)

Source: Bloomberg, InterCapital Research

Overall, 2023 thus far has proved to be quite good for Slovenian equity. Recently, there has been a decline in trading and even a decline across several stocks. This came as a result of firstly the flooding and natural disasters in Slovenia, but also news such as the total assets banking tax for Slovenian banks. As such, after the initial negative momentum, trading has been somewhat subdued, especially compared to what the average trading would be.

In 9M 2022, MedLife recorded a revenue increase of 23% YoY, an EBITDA increase of 9.9%, and a net profit of RON 3.8m, a decrease of 93.3% YoY.

During the 9M 2023, sales revenue amounted to RON 1.63bn, an increase of 22.9% YoY. The increase was mainly driven by growth in almost all of the Group’s business lines, as well as the impact of acquisitions completed by the Group in 2022. The best-performing segments were the clinics and the hospitals, with a growth of 36% and 28%, respectively. Further, the corporate division noted a 16% increase, while laboratories too noted a double-digit 12% increase in the top line. Overall, the company’s gradual shift in recent years from preventive services to hospital and oncology services has resulted in greater resilience for the Group, regardless of the macroeconomic situation. Q3 was marked by the opening of two new oncology centers under the Neolife umbrella.

Operating expenses amounted to RON 1.56bn, an increase of 26.2% YoY. The largest increase was recorded in the Third-party expenses, which grew by 34.3% YoY to RON 456.5m. Salary and related expenses are to follow with 25% YoY growth to RON 402.9m on the back of a stronger top line.

As top line grew more pronounced compared to OPEX growth, the EBITDA increased by 9.9% YoY and amounted to RON 217.7m. This would mean that the EBITDA margin slightly decreased, by 1.6 p.p. to 13.4%. However, operating profit (EBIT) amounted to RON 76.8m and decreased 19.5%. Moving further down the P&L, the financial result dragger the Group’s profitability. Net financial loss amounted to RON 61.6m – increasing more than 2x to a comparable period last year. Due to the lower op. profitability further dragged by much lower Net financial result, the earnings before taxes (EBT) also decreased sharply, by 77.6% YoY to RON 15.2m. Consequently, the net income amounted to RON 3.8m, noting a decrease of 93.3% YoY.

MedLife key financials (9M 2023 vs. 9M 2023, RONm)

Source: MedLife, InterCapital Research

Moving on to the balance sheet, total assets increased by RON 2.5bn, an increase of 14.5% YoY. This came mainly because of the many acquisitions the Company made during the period, resulting in higher PPE & Goodwill from the transactions. Overall, total non-current assets increased by 14.8%, to RON 1.94bn. Current assets also increased, mainly driven by higher trade receivables (+7.6% YoY), and higher cash and cash equivalents (+33.2% YoY). On the other hand, growth in liabilities was driven by higher long-term interest-bearing loans and borrowings (+26% YoY) amounting to RON 1bn (from RON 803.3m).

Finally, the company commented on its outlook for the upcoming future. Medlife’s focus is on consolidating profitability margins after big investments in organic projects. Regarding acquisitions, MedLife adopts a more cautious approach but acts based on current market circumstances and trends. From an operational perspective, the main objectives include expanding the portfolio of quality doctors and sustained investments in delivering high-quality medical services.