During Q1 2024, Končar D&ST recorded sales revenue growth of 36.1% YoY, while EBITDA growth was even more significant, and amounted to c. 220% YoY in the first quarter. Finally, net profit amounted to EUR 21.3m, a strong increase compared to EUR 5.7m in Q1 2023.

Yesterday, Končar D&ST, the most important subsidiary of Končar Group, published its Q1 2024 results. According to the report, sales revenue grew by 36.1% YoY and amounted to EUR 97.2m. Končar D&ST further noted that in Q1 2024, all the signed contracts amounted to EUR 217.6m, an increase of almost 2x. Furthermore, by the end of this quarter, the backlog (all the signed contracts) amounted to EUR 748.6m, an increase of 71.1% YoY.

We would like to note that Končar D&ST does not publish detailed explanation for its financial results, as this is done on the Group (Končar Group) level. Still, as Končar D&ST is the largest subsidiary of the Group, the increase in demand for transformers and the amount of signed new deals is surely one of the largest contributing factors.

In terms of operating expenses, in Q1 2024 it amounted to EUR 71.9m, an increase of 12% YoY. The largest increase came from the changes in inventories of work in progress and finished goods. Material costs have actually noted a strong 8.9%. decrease from EUR 72.6m to EUR 66.2 in Q1 2024 due to the cost-side stabilization. This was to be expected, as many industrial companies were hit with significant material cost growth in between 2022 and 2023, as the inflation in those categories was far more significant than inflation in consumer prices.

Staff costs grew by as much as 47.1% YoY to EUR 10.6m in the first quarter. This was under the influence of several factors, firstly the inflation which drove wage growth, but also due to the increase in the number of employees. In fact, by the end of 2023, the no. employees amounted to 1,160, an increase of 40.8% YoY. This was not only due to organic growth but also due to inorganic one, as the Company bought an additional 35% stake in Ferokotao d.o.o., becoming the majority owner at 51% by the end of 2023.

Despite the overall cost increases, the strong growth in revenue resulted in significant improvements in EBITDA. In the first quarter, EBITDA amounted to EUR 26.7m, noting an increase of more than 3x. This would also mean that the EBITDA margin improved as well, growing by 16.4 p.p. to 28.5% in Q1.

In terms of the net financial result, there we no significant changes. Net financial results amounted to EUR 544k (vs. net financial loss of EUR 363k in Q1 2023), further amplifying improved operating profitability. This came as a result of higher financial gains from FX and improved financial income.

All taken together, this led to a strong increase in net income of almost 4x, amounting to EUR 21.3m in Q1 2024 – vs. EUR 5.7m in the comparable period. This would also mean that the net income margin amounted to 22.7% in this quarter, a 14.5 p.p. increase YoY.

Končar D&ST key financials (Q1 2024 vs. Q1 2023, EURm)

Source: Končar D&ST, InterCapital Research

In Q1 2024, INA recorded revenue growth of 5% YoY, an EBITDA increase of 62%, and a net income of EUR 11.9m (Q1 2023: EUR -14.2m).

Starting off with the revenue, INA recorded an increase of 5% YoY, amounting to EUR 801.8m during Q1. The Company commented on how after a turbulent 2022 and 2023, the beginning of 2024 showed a more stable external environment on the oil & gas market. The Q1 2024 result was stronger primarily due to better wholesale margins that, combined with higher Retail sales, allowed for stronger overall result.

Breaking the revenue down by segments, in the Exploration and Production segment, revenue amounted to EUR 122.8m, decreasing by 20% YoY, due to lower prices, primarily of gas. This was also influenced by the increased water cut and natural decline on main gas and oil fields, which was partially offset by better well performance after successfully performing well workovers on field Žutica and production optimization on several onshore fields.

In terms of hydrocarbon production, crude oil production amounted to 10.9k barrels of oil equivalent per day (boe/d), while natural gas production amounted to 11.8k boe/d, a 6% decrease, while condensate production amounted to 734 boe/d, a 20% decrease YoY. In total, this would mean that the total production amounted to 23.5k boe/d, decreasing by 8% YoY. Furthermore, the total average realized hydrocarbon price amounted to 65 USD/boe, a 14% decline YoY.

Moving on to the Refining and Marketing, including the Consumer Services and Retail segment, revenue amounted to EUR 778.4m, growing by 4% YoY. On the one hand, Refining processing and Refining production amounted to 26 kt, decreasing by 15% YoY. On the other, total refined product sales increased by 9% YoY, amounting to 778 kt.

Moving on to EBITDA, it amounted to EUR 60m, growing by 62% YoY, and also implying an EBITDA margin of 7.5%, representing an increase of 2.6 p.p. YoY. In terms of operating expenses, they remained roughly the same YoY, growing by 1% to EUR 788m, with negligible changes across most categories. Finally, the net income amounted to EUR 11.9m (Q1 2023: EUR -14.2m), implying a net income margin of 1.5%.

INA key financials (Q1 2024 vs. Q1 2023, EURm)

Source: INA, InterCapital Research

In terms of CAPEX, it amounted to EUR 101m in Q1, increasing by 97% YoY, with the majority of investments being domestic (EUR 107.3m, +102% YoY), with a slight increase in international investments (EUR 2.9m, +7% YoY). Breaking this down by segments, CAPEX in Exploration and Production amounted to EUR 18.2m, increasing by 48% YoY. The majority of CAPEX however, went to the Refining and Marketing, including Consumer Services and Retail segment, with EUR 83.9m in investments, an increase of 117% YoY. The main projects here include the Rijeka Refinery Upgrade Project, which has achieved 87% of completion overall, the CDU energy efficiency upgrade project, the replacement of the condensing turbines with electric drives, and the revitalization of LPG spherical tank 336-SE-023.

At the share prices before the announcement, this would imply a DY of 3.1% for the regular shares, and 4.2% for the preferred shares. The ex-date is set for 5 July 2024, while the payment date is set for 24 July 2024.

Yesterday, Adris Grupa published a proposal for the utilization of profit in the form of a dividend. According to the proposal, EUR 2.57 DPS would be distributed in the form of dividends. Out of this amount, EUR 2.28 DPS will be paid out from the retained earnings of the years 2005 – 2011, while EUR 0.29 DPS will be paid out from the retained earnings of the Company after 2012. At the share prices before the announcement, this would imply a DY of 3.1% for the regular shares, and 4.2% for the preferred shares.

The ex-date is set for 5 July 2024, while the payment date is set for 24 July 2024.

Below we provide you with the historical dividend per share and dividend yields of the Company.

Adris Grupa dividend per share (EUR, left) and dividend yield (%, right) (2013 – 2024)

Source: Adris Grupa, InterCapital Research

At the share price before the announcement, this would imply a DY of 2.3%. The ex-date is set for 3 May 2024, while the payment date is set for 15 May 2024.

Yesterday, Arena Hospitality Group held its General Meeting of Shareholders, during which the proposal for the distribution of profit in the form of dividends has been approved. As such, EUR 0.75 DPS has been approved, which will be paid out from the retained earnings of the Company. At the share price before the announcement, this would imply a DY of 2.3%.

The ex-date is set for 3 May 2024, while the payment date is set for 15 May 2024. Below we provide you with the historical dividend per share and dividend yield of the Company.

Arena Hospitality Group dividend per share (EUR) and dividend yield (%) (2019 – 2024)

Source: Arena Hospitality Group, InterCapital Research

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