Today we bring you an overview of some of the key financial ratios of the CROBEX10 constituents, based on the TTM results.

ROA

Starting off with ROA (Return on Assets), an indicator that shows us how profitable a company is in relation to its total assets. This is done by dividing the net profit of a company by its total assets, expressed as a percentage. A higher ROA number means that a company is more efficient and productive at managing its balance sheet in order to generate profits, while a lower ROA number indicates that a company can still improve its efficiency. It should be noted that comparing ROA between different industries will not result in an apples-to-apples comparison, for e.g., comparing an asset-heavy industry like manufacturing of goods with an asset-light industry like the financial or technological (more software orientated) industries. Even so, seeing how the companies perform can give us a general idea of their performance.

With that out of the way, let’s take a look at how the CROBEX10 constituents performed on this indicator, based on the TTM (trailing twelve months) results.

ROA of CROBEX10 Companies (TTM, %)

Currently leading the way is Atlantska Plovidba, with a ROA of 26.8%, by far the highest out of all the CROBEX10 constituents. Considering that the Company operates in the asset-heavy (shipping) industry, and has posted really strong Q1 2022 results, with a TTM net income of HRK 503m, means that the Company is currently managing its assets (ships) extremely well. However, it should be noted that considering the shipping industry is quite cyclical (depending on economic conditions, ease of travel, and strong supply chains), this does mean that a lot of the influence on this metric is outside of the Company’s control. Still, these are the strongest results posted. Next up, we have Ericsson NT, with a ROA of 15.9%, which also posted solid results in Q1 2022, with a TTM net profit of HRK 59.7m, an increase of 46.3% YoY.

After them, we have several companies above 5%, with Atlantic Grupa at 6.25%, Končar at 5.84%, and Podravka, at 5.79%. Atlantic Grupa and Podravka both operate in the food production industry, so their numbers can be directly compared. This shows that currently, Atlantic Grupa is managing its assets with slightly higher efficiency, with both higher net profit and total assets than Podravka. Končar, which also operates in the production industry, but this time of tools and machines, posted really good Q1 2022 results, with a TTM net profit of HRK 282.7m, leading to this number.

The only other Company with a notable ROA is HT, with 4.98%, which also posted solid Q1 2022 results, resulting in a TTM net profit of HRK 748.3m. On the other hand, the only Company which posted a negative ROA is AD Plastik, which was significantly impacted by the Russian invasion of Ukraine, as well as the continuing semiconductor shortages in the automotive industry.

ROE

Moving on to ROE (Return on Equity), this is an indicator of the financial performance of a company, which measures how efficient a company is at generating profits. It is calculated by dividing a company’s net profit by the shareholder’s equity. Like with ROA, ROE is highly dependent on the industry a company operates in, so comparing companies between different industries can be hard.

ROE of CROBEX10 Companies (TTM, %)

Once again, Atlantska Plovidba has the highest ROE, with 47.9%, which can again be contributed to the same reasons as above, as the net profit is also used in ROE calculation like in ROA. Next up, we have Ericsson NT, which considering they operate in an asset-heavy industry, with a lower amount of capital, means that their ROE is higher, standing at 42.5%. The Company’s results should also be taken into account because once again, the Company posted solid Q1 2022 results. Next up, we have Atlantic Grupa, with 10.8%, Končar, with 9.6%, and Podravka, with 7.9%. Comparing Atlantic Grupa and Podravka again makes sense, and in this metric, we can see that Atlantic Grupa outperforms Podravka once again, by almost 3 p.p., meaning that they are more efficient at generating better returns on their capital.

Moving on, we have Hrvatski Telekom with 5.9%, followed by Adris, Arena Hospitality Group, and Valamar Riviera. It should be noted that these companies derive the majority of their profit ( and if we exclude Adris, all of their profit) from the tourism industry, which was severely affected by the COVID-19 measures, as these numbers are based on TTM results. If we looked at this same situation several quarters in the future, (as 2022 is expected to match or surpass 2019 in terms of revenue and profit for the tourism industry) then the picture would be a lot better. Because of the level of the impact of these reasons on the tourist companies’ operations, comparing their ROEs does not make much sense at the moment. Lastly, we have AD Plastik, with an ROE of -0.37%, with the same problems affecting them as in the ROA comparison.

CROBEX stayed flat during May, decreasing 2.4% to end the month at 2,078.38 points.

The total equity turnover on the Zagreb Stock Exchange amounted to EUR 22.9m (HRK 172.5m), an increase of 13.3% MoM, and a decrease of 19% YoY. This would mean that in May, the average daily turnover amounted to EUR 1.04m (HRK 7.84m).

The total equity value traded (excluding block transactions) in May amounted to EUR 21m (HRK 158.3m). Out of that, the top 10 most traded stocks had a turnover of EUR 14.8m (or HRK 111.1m), representing 64.43% of the total turnover. Breaking this down further, Valamar Riviera generated the most turnover, 12.80% of the entire turnover, followed by HT with 9.7%, Atlantska Plovidba with 9.3%, SPAN with 6.3%, Atlantic Group with 6.2%, HPB with 5.4%, Podravka with 5.2%, Adris with 4.4%, Ericsson Nikola Tesla with 2.8% and Zagrebačka banka with 2.2%.

The main index on the ZSE, CROBEX, decreased by 0.7% and ended the month with 2,078.81 points. At the same time, CROBEX10 decreased by 3.3%, after surging a bit during April. On a YTD basis, CROBEX10 decreased by 2%, while CROBEX stayed flat. On a YoY basis, CROBEX10 grew by 2.4% and CROBEX grew by 6.7%.

Looking at the CROBEX10 constituents themselves, during May, Atlantic Group experienced the largest increase, growing by 1.9%. Next up, we have Atlantska Plovidba with “only” 1.5% growth. This “modest” growth can be attributed to a very high base effect, as ATPL increased, looking since the beginning of the year, by 44.6% with supporting Q1 results for growth. Atlantic Group and Atlanstska Plovidba are the only two companies reporting an increase in May, as every other constituent decreased in share price.

On the flip side, Arena Hospitality lost 8.4% of its value – but we should emphasize Q3 as the most important one for tourism companies. Arena is followed by HT and Valamar Riviera, with -7.3% and –7.2% MoM decrease. In total, 8 out of 10 CROBEX10 companies experienced a MoM decrease.

Performance of CROBEX10 constituents in May 2022 (%)