In Q1 2022, sales increased by 69.5%, EBITDA increased by 134.4%, while net profit increased more than fivefold and reached HRK 67.4m.

In the first three months of 2022, the company transported 1.7m tons of cargo. Of that, coal makes up roughly 60%, followed by minor bulk and iron ore with c.25% and 12%, respectively.

Atlantska Plovidba operated with 12 vessels, of which 5 are classified as Panamax, 5 as Supramax and 2 as Handy. Of those, 4 vessels were employed on a long-term lease (> 1 year), while 8 were employed on a short-term lease (< 1 year). In the mentioned period, the fleet utilization rate amounted to 98%.

According to the company reports, the average daily freight rate in Q1 of 2022 rose sharply to roughly USD 21,021 per day. We also note that the company’s average freight rate fell on an MoM basis and as of March stood just slightly below USD 20,000.

As a result of the favorable environment, in the first quarter of 2022, the company observed a steep increase in sales of 72.7%, amounting to HRK 153.8m.

Operating expenses in Q1 observed an increase of 18.3% YoY, amounting to HRK 77m. The aforementioned increase could be attributed to higher material costs (+21.4% YoY) and higher employee costs (20.5% YoY).

Therefore, as a result of higher growth in sales than operating expenses, EBITDA increased more than 2x and reached HRK 97m (+134.4%).  Such a result led to the EBITDA margin being significantly higher as well, at 63.7% (+16.8 p.p.). Going further down the P&L, the company recorded EBIT of HRK 76.85m compared to EBIT of HRK 25.7m in Q1 of 2021.

At the same time, Atlantska Plovidba recorded a net financial loss of HRK -9.5m, which represents a decrease in loss of HRK 13.9m on a YoY basis. The mentioned decrease could be attributed to somewhat lower interest payments in Q1 2022. As a result of all of the above, the company’s bottom line increased more than fivefold, reaching HRK 67.4m, compared to a profit of HRK 12.0m in Q1 of 2021.

We should also emphasize that Company announced the selling of one of its boats, classified as Supramax. Transaction price amounted to HRK 140.1m. Atlantska Plovidba will deliver the boat in the last quarter of 2022 and will be operating the boat meanwhile. Transaction will positively impact on Company’s cash flow.

In Q1 2022, HPB recorded a net interest income decrease of 7.1% YoY, a net fee and commission income increase of 1.8%, operating income decrease of 17.8%, and a net profit of HRK 30m, a decrease of 25% YoY.

Hrvatska Poštanska Banka (HPB) publishes its Q1 2022 results. According to the report, net interest income decreased by 7.1% YoY to HRK 126m, due to the lower market interest rates, lower gross loans portfolio, strong competition in the banking market, as well as the fact that the interest expenses management in Q1 2022 (-35.5% YoY) did not offset the decrease in interest income (-8.6% YoY). Net fee and commission income increased by 1.8% to HRK 43m due to the recovery in economic activity.

Operating income decreased by 17.8% YoY and amounted to HRK 157m, on the back of a lower net interest income and lower net trading income. Net loss from trading (HRK -28.8m compared to Q1 2021) is a result from the strong yield growth and falling govt. bond prices triggered by the inflation growth and monetary tightening policies of the ECB and FED, further intensified by the war in Ukraine.

Operating expenses increased by 8.6% to HRK 126m, due to the higher administrative costs. Higher administrative costs were driven by higher employee costs resulting from investments into internal IT resources, as well as the activities related to the introduction of the Euro in Croatia. As a result, operating profit decreased by 59.5% to HRK 30m.

HPB also recorded a decrease in provisions, which decreased from HRK 25m to HRK 0m, which had a positive influence on net profit but could not offset the lower operating profit. As a result, the bank recorded a net profit of HRK 30m, a 25% decrease YoY. With the increase in expenses and a decrease in operating income, the cost to income ratio also grew significantly, increasing by 19.8 p.p. to 80.8%. Finally, the net interest margin decreased by 0.3 p.p. to 1.8%.

Looking over to the balance sheet, in Q1 2022, total assets increased by HRK 893m since the beginning of the year, as a result of an increase in liquid assets (+9.3%), primarily due to a continuous increase in deposits. At the same time, gross loans increased by 2.2% and amounted to HRK 16.1bn, while securities decreased by 5%. Meanwhile, on the liabilities side, deposits increased by 4.5% and amounted to HRK 24.5bn, with the largest increase from the Small and Medium Enterprises (SMEs), which grew by 12.1%, the central state and large corp. segment grew by 8%, while the financial markets grew by 5.2%. Non-performing loans (NPL) ratio decreased by 0.5 p.p. to 9.2%.

HPB Key Financials (Q1 2021 vs. Q2 2022, HRKm)

Acquisition of Sberbank & brief overview of Q1 2022 results

HPB also touched on their acquisition of Sberbank, which happened during Q1 2022. With the addition of Sberbank (now rebranded as Nova hrvatska banka and part of the HPB Group), HPB added HRK 11bn of assets to its portfolio. With this addition, HPB has a total of HRK 39bn of assets, still maintaining its position as the 6th largest bank in Croatia, but coming really close to the 5th largest bank, Raiffeisenbank which has assets of HRK 42bn. During Q1 2022, Nova hrvatska banka recorded a net profit of HRK 3.2m a decrease of 63.6% YoY, resulting from a loss of trading due to lower govt. bond prices. Furthermore, the effect of the CHF lawsuits in the amount of HRK 9.8m is also taken into account. The bank also achieved a net interest margin of 2.8%, a 0.1 p.p. increase YoY, and an NPL coverage ratio of 73.4%, a 1.5 p.p. increase YoY.

The integration of Sberbank with HPB is evisaged for the next year, while the inclusion of Sberbank’s financial results in the consolidated financial statements of HPB are to be published in H1 2022 results.

In Q1 2022, Span recorded an increase in revenue of 38% YoY, EBITDA after one-off items increase of 68% YoY, and a net profit of HRK 17.2m, an increase of 135% YoY.

In Q1 2022, the operating revenue of Span Group amounted to HRK 185.1m, an increase of 38.2% YoY. The revenue increase stems from the growth in all the segments of the Company, with the largest percentage growth achieved by Infrastructure Services, Cloud & Cyber Security Solutions, which grew by 77% YoY.

Meanwhile, operating expenses also experienced an increase, growing by 34.3% YoY and amounted to HRK 169.7m. The increase was a result of higher expenses for goods and services, higher expenses for personnel as well as higher other operating expenses. Breaking this down further, goods and services expense growth was correlated directly to revenue growth. Personnel expenses increased by 40%, as a result of the higher number of employees and one-off expenses arising from the allocation of shares to employees of Ekobit. Finally, other operating expenses grew under the influence of the higher volume of operations and higher number of employees. Ekobit transaction is valued at HRK 37.4m and part of the purchase price that depends on the 2022 operating results of Ekobit is subject to adjustment. the Company paid part of this purchase price in treasury shares (17,013) by allocating them to employees as a purpose of fulfilling a Share Allocation Plan.

One-off items had strong influence on the EBITDA development. EBITDA before one-off items grew by 88% and amounted to HRK 23.1m. The main one-off items are the aforementioned expenses from the allocation of shares to employees of Ekobit, something that is defined in the purchase and sale contract, as well as the higher operating expenses arising from the acquisition of Ekobit, mainly related to the costs of consultants. If we were to take these one-off items out, EBITDA after one-off items increased by 68% (or HRK 8.2m) to HRK 20.1m.

One-off net financial results related to the acquisition of Ekobit also had an influence on the net profit. Higher financial income (+82% YoY), amounting to HRK 3.1m, grew faster than financial expenses (+35.6% YoY), amounting to HRK 1.6m. In total, the net financial result amounted to HRK 1.5m, an increase of 182% YoY, mainly as a result of the difference in the price of Ekobit shares for which Span bought them and those by which Ekobit acquired them in 2017. In total, net income after one-offs increased by 135% YoY and amounted to HRK 17.2m.

Span Key Financials (Q1 2021 vs. Q1 2022, HRKm)

*after one-off items

Overview of the business operations in Ukraine

Span also provided an overview of its business operation in Ukraine, in the form of information on its TOV Span Ukraine subsidiary. Revenues of TOV Span account for 11% of the consolidated revenue of the Group in Q1 2022. Even though there was an increase in revenue in 2022, the share of that revenue in the total consolidated revenue decreased due to the fact that it grew slower than other regions. EBITDA is negative, but its position improved by 14% and decreased to HRK -918k (Q1 2021: HRK -1.07m). Finally, net loss amounted to HRK 1.4m, an increase of 32% YoY. Furthermore, Span states that their operations in the war-ravaged areas of Ukraine have not stopped and they continue providing support for their users in the country.

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