Yesterday, Valamar Riviera & its subsidiary Imperial announced the approval of 2024 investments. Besides this, Valamar Riviera’s Supervisory Board also approved the restart of investment in Project PINEA, with a total value of EUR 130m.

Starting off with Valamar Riviera, at its Supervisory Board session held yesterday, 28 June 2023, the Board approved 2024 investments in the total amount of EUR 28.7m.

The Supervisory Board also gave approval to restart investments in Project PINEA, with a total value of EUR 130 million, continuing the construction which began in 2019. Construction was temporarily suspended in March 2020 due to the pandemic after which it faced further delays due to the energy crisis, inflation, and a slowdown in economic growth. Project PINEA represents the single largest investment in Croatian tourism, the resort is anticipated to encompass a capacity of about 500 accommodation units and a range of facilities for high-end year-round operations.

After this investment completes, it will make the Pical zone in Poreč one of the most attractive tourism zones in Croatia. Valamar further notes that it continues its sustainable strategy of developing products and services with added value for the Croatian tourism industry.

Moving on to Imperial Riviera, a subsidiary of Valamar Riviera, it also had a Supervisory Board meeting yesterday. At the meeting, the SB approved a EUR 37.5m plan of investment in 2024. The planned investments are mostly intended for the repositioning of hotel Eva on the island of Rab, and the renovation of the tourist resort Riviera in Makarska.

Lastly, Valamar Riviera has additionally adopted a long-term plan for the compensation of key managers with stock-based compensation in the period from 2023 to 2026 which according to the company will encourage loyalty, focus on achieving business goals, and increase value for shareholders. The value of the compensation program will be determined by the annual increase in market capitalization and the annual increase of the Company’s business value. The total annual compensation amount cannot exceed 10% of the total dividend amount paid to shareholders in that year.

By the end of May 2023, the NAV of the Croatian pension funds amounted to EUR 18.6bn, an increase of 6.8% YoY, and 1% MoM.

The Croatian Financial Services Supervisory Agency (HANFA) has recently released its latest report detailing the changes and developments observed in the Croatian financial markets during May 2023. According to the report, the NAV of Croatian pension funds reached EUR 18.6bn, reflecting a YoY increase of 6.8% (or EUR 1.2bn), as well as an MoM increase of 1% (or EUR 187m). Meanwhile, the net contributions into the pension funds amounted to EUR 109m in May 2023, while since the beginning of the year, it amounted to EUR 492m.

Croatian mandatory pension funds AUM structure change (January 2018 – May 2023, EURm)

Source: HANFA, InterCapital Research

Regarding the specific variations recorded in the asset holdings of the pension funds, the largest monthly increase was observed in bonds, with a rise of EUR 157m or 1.4%. Shares followed with an increase of EUR 49m or 1.2%, while investment funds experienced an increase of EUR 43m or 2.1%. On the contrary, deposits and cash exhibited the sole decrease, declining by EUR 110m or 15.5%. Given the prevailing high-interest-rate environment, a notable trend has been observed of funds shifting towards lower-risk assets, particularly bonds, especially when bond yields are at their highest in a decade.

Meanwhile, on an annual basis, most asset classes demonstrated growth. Bonds experienced the largest absolute increase, growing by EUR 515m or 4.6%, followed by shares with an increase of EUR 389m or 10.8%, and money market holdings with an increase of EUR 277m or more than six times YoY. Additionally, investment funds exhibited significant growth, increasing by  EUR 124m or 6.4%. Conversely, deposits and cash holdings declined by EUR 126m or 17.5%.

Examining the current asset structure of the pension funds, bonds remain the largest holding, constituting 62.5% of the total, representing an increase of 0.22 p.p. MoM but a decrease of 1.3 p.p. YoY. Following them we have shares, which constitute 21.5% of the total, remaining roughly unchanged MoM, but increasing by 0.78 p.p. YoY. The only other category with more than 10% of the total is the investment funds, which hold 11.1% of the total, an increase of 0.12 p.p. MoM, but remaining roughly unchanged YoY.

Current AUM of Croatian mandatory pension funds (May 2023, % of the total)

Source: HANFA, InterCapital Research

At the share price before the announcement, this would imply a DY of 9.5%. The ex-date is set for 29 August 2023.

Yesterday, Luka Koper held its GSM meeting, and after it published the resolutions from the meeting. According to the release, they approved the 2022 dividend payment, in the amount of EUR 2.5 DPS. At the share price before the announcement, this would imply a DY of 9.5%.

The ex-date is set for 29 August 2023, while the payment is set for 31 August 2023. Below we provide you with the historical dividends and dividends per share of the Company.

Luka Koper dividend per share (EUR) and dividend yield (%) (2013 – 2023)

Source: Luka Koper, InterCapital Research