IC Market Espresso 29 Mar 2022

Upcoming Events – March 2022

Here you can find the dates for the upcoming events of the regional companies.

wdt_ID Date Ticker Announcement Country
45 28.3.2022 TTS TTS 2021 dividend proposal Romania
46 29.3.2022 ATGR Atlantic Grupa 2021 Annual Report Croatia
56 31.3.2022 ZVTG Triglav Audited annual report for 2021 Slovenia

Given the current Covid-19 situation, some of these events might be subject to change (postponed or cancelled).

P/E and Cash Adjusted P/E of CROBEX10 Constituents – FY 2021 Results

Today, we decided to give you an overview of the P/E and cash adjusted P/E of the CROBEX10 constituents, based on the FY 2021 results.

With the release of the FY 2021 results for all CROBEX10 constituents, we bring you an updated overview of their P/E ratio as well as their cash-adjusted P/E ratio. As a reminder, cash adjusted P/E means that we take out the cash and cash equivalents (cash in the bank + short-term assets that can be turned into cash)  a company has out of its operating business, in order to give a more clear view. This is done in order to point out that some companies have a lot of cash at hand, and this does have an impact on their P/E ratios.

We would also like to note that Adris’ results were not taking into account investments into securities, as that is not something that is „available“ at hand for the company but also refers to securities invested through their consolidated entities. Also, the comparisons between these companies’ ratios should be taken with a grain of salt, as companies that operate in different industries are bound to have different ratios.

P/E ratios of CROBEX10 constituents

As can be seen from the graph, the largest P/E ratios are held by Arena Hospitality Group and Valamar Riviera, at 45.17x and 35.88x, respectively. As both of these companies operate in the tourism industry, comparing them makes sense. The reason for their high P/E ratios can be attributed to lower net profits. Even though 2021 was a year of recovery, it was not even close to pre-pandemic levels (e.g. Valamar had almost 3x the net profit in 2019 than it did in 2021. Moving on, we have Hrvatski Telekom, AD Plastik, Adris, and Atlantic Grupa, with 24.43x, 18.68x, 16.52x, and 15.82x, respectively. Hrvatski Telekom, which has a market cap of app. HRK 15bn, recorded a net profit of HRK 614.4m in 2021. The case is the same with other mentioned companies, as they have a higher market capitalization compared to their net profit levels, driving the P/E ratio higher. On the flip side, Atlantska Plovidba had a P/E of only 1.37x, and this was due to the really high (HRK 447.7m) net profit, compared to a net loss of HRK -46.6m in 2020. Considering they operate in the shipping industry, which saw a lot of fluctuations and changes in 2021 due to the pandemic, supply chain disruptions, etc., the higher earnings are not surprising.

Cash adjusted P/E ratios of CROBEX10 constituents

Adjusting the P/E ratios by taking out the cash & cash equivalents, we can see big changes for some companies, and smaller changes for others. Again, Arena Hospitality Group and Valamar Riviera take the lead, with an adjusted P/E ratio of 34.34x and 25.27x. Following them, we have HT with 19.36x. Other companies did not have significant (higher than 5 points change) to their P/E ratios.

The largest change can be seen with Arena and Valamar, which both hold significant cash positions (HRK 341m and HRK 1.15bn), respectively. HT also experienced a higher decline, as they are holding the highest amount of cash out of the observed companies (at HRK 3.1bn). Therefore, taking the cash out of their market cap would decrease it to HRK 11.9bn. The smallest relative change was seen by Podravka, which decreased from 13.69x to 13.58x, and they are the company that holds the least amount of cash out of the observed companies, at HRK 34.2m.

Market capitalization and cash adjusted market capitalization of CROBEX10 constituents (HRKm)

*Adris market cap. based on both ADRS and ADRS2 securities

Telekom Slovenije Announces Acquisition of ACTUAL I.T.

Yesterday, Telekom Slovenije signed a share purchase agreement with DBA S.p.A., for the purchase of a 100% stake in ACTUAL.

Telekom Slovenije has announced that it has reached an agreement for the purchase of ACTUAL I.T., with DBA S.p.A. This was made in the form of a share purchase agreement (SPA) for 2,040,275 shares, which represents a 100% stake in ACTUAL.

The signing of the agreement took place yesterday, 28 March 2022, and the anticipated completion of the transaction shall occur within the next six months. The agreement shall be concluded when several conditions are met. This includes the enterprise value of ACTUAL (on 31 December 2021), the estimated value of its indebtedness, the estimated amount of available cash, and the estimated value of the difference between the working capital and the estimated target working capital, all of those as per date of the completion of the transaction. These parameters will also be subject to an agreed adjustment mechanism, which is to be completed within 60 business days following the date of the completion of the transaction.

The agreed enterprise value of ACTUAL (on 31 December 2021) amounts to EUR 30m. If all the above-mentioned parameters were taken into account, the purchase price on 31 December 2021 would amount to EUR 20,627,000. This acquisition is in line with the adopted strategic business plan of Telekom Slovenije and represents a new milestone in the implementation of that strategy. The acquisition will strengthen the position of Telekom Slovenije in the Slovenian ICT market and will drive important synergies that will set the foundations for further development.