With the publishing of all the Q1 2022 results by the CROBEX10 constituents, we decided to bring you an overview of the change in their EBITDA and profit margins during Q1 2022.

One thing that should immediately be noted is the fact that comparing margins across different industries these companies operate is not necessarily the best way to give a comparable overview. This is because the EBITDA and profit margins depend on the industry they operate in, so a real comparison to any of these companies would be to their peer average or median. Even so, it is still worth looking at which of these companies are more profitable and therefore have a larger cushion to potentially reduce prices of their goods or services if necessary, while maintaining a higher level of profitability.

Besides that, we note that looking at only Q1 margins might lead to misleading conclusions as some of the observed companies derive most of their earnings in other quarters.

Q1 – EBITDA margin of Selected Croatian Companies (%)

Out of all the selected companies, the company which has the highest EBITDA margin is Atlantska Plovidba, standing at 63.7%. The company also reported a very strong YoY margin increase by 16.8 p.p. YoY. Good results came as a result of general macroeconomic improvement. First of all, the company transported 6.3% more cargo, compared to Q1 2021. Also, the fleet utilization rate amounted to a high 98%, while furthermore, average daily freight rate amounted to USD 21,021 per day, reporting an increase of 63%. All of the above-mentioned led to EBITDA increase of 134% and therefore, increased EBITDA margin to 63.7%.

Atlantska Plovidba is followed by Hrvatski Telekom, which had an EBITDA margin of 42.4% in Q1 2022, an increase of 2.4 p.p. YoY. HT reported lower sales due to deconsolidation of Optima, but EBITDA nevertheless increased due to lower COGS and solid performance in HT Croatia and Crnogorski Telekom.  

Next up, we have Končar and Ericsson NT with EBITDA margins amounting to 15.8% and 15.7%, respectively. Both companies had a good performance during the year, with strong revenue growth and slower OPEX growth driving higher EBITDA margins. Končar reported strong results in virtually all segments, while the Transformer segment noted a sales increase of 25.4% YoY, reaching HRK 634m. To further boost Končar’s bottom line, its equity-accounted companies showed strong results of HRK 6.6m, increasing by 57% YoY. Considering Ericsson, both domestic and the export markets showed a strong increase, further amplified by a lower transition and transformation costs to boost EBITDA.

Next comes Podravka with an EBITDA margin of 14.5%, decreasing by 2.6 p.p. YoY. Podravka’s sales were up due to price increases of food (increase ranging 7% – 10%), but EBITDA decreased in Q1 mostly due to FX differences on trade receivables and trade payables in Russia.

At the bottom of the list, we have AD Plastik, looking at margin levels only. AD Plastik reported an EBITDA margin of 10%, reporting a decrease of 6.2 p.p. YoY. This also translated to a lower bottom line margin, as on FY 2021 basis AD Plastik generated 27% of revenues in Russia. In Q1 Russia’s sales were down 35% due to the stoppage of production in Russia, as car manufacturers have stopped their production activities in Russia. Furthermore, the EU market was down due to the semiconductor shortage, overall resulting in lower operating profitability and negative FX results below the operating level.

We also note that we have not included Croatian tourists in the overview, as they reported a negative EBITDA and a net loss. Q1 tends to be a loss-generating quarter for Croatian tourists, so the performance should not be considered as indicative of the FY results, as they make most of their profit during Q3.

Q1 – Profit margin of Selected Croatian Companies (%)

Looking over to the profit margins, the company with the highest margin is still Atlantska Plovidba, with 44.2%. Following them, we have Končar and Ericsson NT with 12.7% and 11.3%, respectively. On the flip side, the only company with a profit margin lower than 5% was AD Plastik, at 0.2%, as the company’s bottom line was strongly impacted by both semiconductor shortage and stoppage of production activities in Russia.

In April 2022, the total assets under management of the Slovenian mutual funds amounted to EUR 4.1bn, a decrease of -2.4% MoM, but an increase of 10.2% YoY.

The Slovenian Securities Market Agency has published its monthly report on the changes recorded by the Slovenian mutual funds. In April 2022, the Slovenian mutual funds had a total of 4.1bn of AUM (assets under management), representing a decrease of -2.4% MoM, -5.8% YTD, but an increase of 10.2% YoY. The decline in equity is something that has been experienced across the world, but especially in Europe and the US, as the current inflation is forcing the Central Banks (Fed, ECB) to increase interest rates and end the quantitative easing.

Equity Holdings of Slovenian UCITS funds (EURm)

The decrease in the AUM of the Slovenian mutual funds can be seen in both the domestic and foreign equity holdings. In April, domestic equity holdings amounted to EUR 66.8m, a decrease of -2.6% MoM, but still an increase of 6.3% YoY. Looking over to the foreign equity holdings, they amounted to EUR 2.78bn, a decrease of -2.8% MoM, but an increase of 10.8% YoY.

Looking at the asset structure of these funds, in April 2022, shares amounted to 69.7% (or EUR 2.84bn) a decrease of -0.4 p.p. MoM, but a still slightly positive increase of 0.3 p.p. YoY. The second largest asset class, bonds, amounted to 15.9% of the total assets, a decrease of -0.1 p.p. MoM, -0.3 p.p. YoY. Next up, we have the money market, deposits & cash, which accounted for 7.1% of total assets, an increase of 0.8 p.p. MoM, and 1.2 p.p. YoY. Finally, we have the investment funds, which accounted for 6.8%, a decrease of -0.2 p.p. MoM, 1.1. p.p. YoY.

Total assets of Slovenian mutual funds (EURbn)

What can be taken away from this data is something that is seen on the market across the world today, i.e. the decreasing amount of investment into shares (or it losing value). This is followed by bond holdings, which remain at roughly the same level (as they carry low levels of risk), and an increase in the cash & deposits, as this is the most liquid type of asset class and one that carries the lowest risk.

Finally, taking a look at the net contributions of the funds, in April 2022, they amounted to EUR 16.1m. Meanwhile, in the last twelve months, the net contributions amounted to EUR 358.9m, which compared to the same period in 2021, is an increase of 17%. Furthermore, the total number of subscribers amounted to 499,997 in April, which represents an increase of 4.8% YoY.

Net contributions in the Slovenian mutual funds (EURm)