New measures will amount to HRK 300 – 350m and will be applied until year end.
The Prime Minister of the Republic of Croatia, Andrej Plenković, presented yesterday the continuation of measures to preserve jobs due to the crisis caused by the Covid-19 pandemic. He noted that According to the Croatian Employment Service (HZZ), HRK 6.85bn, has been paid so far for various measures to preserve jobs. When including written-off contributions, that figure exceeds HRK 10bn.
The first measure concerns the shortening of working hours. So far, it has referred to the reduction of working hours by 50%, while now it is being reduced to 70% and the maximum monthly support per worker is increasing from the current HRK 2,000 to HRK 2,800. According to this measure, as an example, someone can work for a day and a half, and the other three and a half days will be compensated by the state in the amount of up to HRK 2,800, while they will also be exempted from paying contributions to that amount.
The second measure regards support for each employee of the company that will continue further. Now the Government is introducing a progressive support in accordance with the drop in sales as follows:
- a subsidy of HRK 2,000 per worker will be given for a drop in turnover of at least 40%.
- HRK 2,500 will be given for a drop in turnover of 45-50%
- HRK 3,000 for a drop in turnover of 50-55%
- HRK 3,500 for a drop in turnover of 55-60%
- HRK 4,000 for a drop in turnover exceeding 60%
Additionally, the Prime Minister pointed out that the measure was adjusted in a way that would enable greater coverage of entities, which means that the decline in turnover will no longer be measured on a monthly basis, but will compare the decline in turnover YoY on a quarterly basis.
The new measures should be in place until the end of 2020, while the estimated amount of the mentioned measures should amount to between HRK 300 and 350m.
By looking at the latest announcement from the Tax Administration of the Republic of Croatia, being tracked for Covid-19 pandemic purposes, in the period from 24 Feb till 18 Oct 2020 the value of taxable invoices decreased by 17.8% YoY.
A higher frequency data is compiled by Croatian Tax Administration, a department of the Ministry of Finance, who stated that the value of taxable invoices dropped by 17.8% YoY (or HRK 24.56bn) in the period from 24 February till 18 October. Meanwhile total taxable invoices in the mentioned period amounted to HRK 113.44bn.
Drop in taxable invoices in wholesale and retail trade in the same period was only at 9.36% (or HRK 8.24bn) while drop in accommodation and food services was at 46.4% (or HRK 10.6bn).
The value of taxable invoices in the 2nd week of October 2020, continued to drop, however in high single digits unlike, each week of September when taxable invoices observed double digit decreases. To be specific in the 2nd week of October taxable invoices decreased by 9.64% YoY. Drop in taxable invoices in the wholesale and retail trade was relatively low at -1.05% YoY, while drop in accommodation and food services was at -41.35% YoY.
The total amount of HRK 412m for the natural gas supplied by INA, PPD and HEP was fully paid by paying the last instalment six months before due date.
Petrokemija published an announement on the Zagreb Stock Exchange stating that they have repaid in full the old debt in the total amount of HRK 412m for the natural gas supplied by INA, PPD and HEP by paying the last instalment six months before due date. On the news company’s share price increased by 10.3% on very low turnover amounting to HRK 60 ths.
The loans provided by all three gas suppliers date from the period before the changes in the ownership structure, i.e. a portion of the debt was incurred in 2015/2016 and a portion in 2018. After change in ownership structure and share capital decrease, Petrokemija’s main gas suppliers INA and PPD became its majority owners via SPA Terra Mineralna Gnojiva which now has 54.52% ownership of Petrokemija.
Note that as of H1 2020, Petrokemija operates with a negative net debt of HRK -146.83m, meaning that their cash position (short term financial assets + cash and cash equivalents) exceed their financial debt. After restructuring and new ownership, Petrokemija is a debt free company that is operating at EBITDA margin of 24.3%. This is a reason why its share is traded at 7.5x from its book value. Market cap amounts to HRK 4.1bn, which it 6.8x more than its equity value of HRK 607m.