IC Market Espresso 4 May 2022

 
Trading Activity on the ZSE – April 2022

CROBEX continued its recovery in April, growing by 1.47% to end the month at 2,129.32 points.

The total equity turnover on the Zagreb Stock Exchange amounted to EUR 20.2m (HRK 154.9m), a decrease of 52.5% MoM, and an increase of 15.3% YoY. This would mean that in April, the average daily turnover would amount to EUR 1.01m (HRK 7.75m).

April is also a special month in the sense of the fact that no block turnover happened during the month. As such, the equity value of traded companies represents the „direct trades“ between investors on the stock exchange. Taking this into account means that the total equity value traded with or without block is the aforementioned EUR 20.2m (HRK 154.9m). Out of that, the top 10 most traded stocks had a turnover of EUR 13.9m (HRK 107.1m), representing 66.54% of the total turnover, a decrease of 207 bps MoM.

Breaking this down further, Valamar Riviera generated 12% (or HRK 19.3m), followed by HT with 11.2% (or HRK 18.1m), ZABA with 8.42% (or HRK 13.6m), Podravka with 7.96% (or HRK 12.8m), and Atlantska Plovidba, with 6.52% (or HRK 10.5m). In total, the top 5 most traded stocks generated 46.1% of the total revenue on the stock exchange.

The main index on the ZSE, CROBEX, increased by 1.47% and ended the month with 2,129.32 points. At the same time, CROBEX10 increased by 1.48%, continuing the recovery from March 2022. On a YTD basis, CROBEX and CROBEX10 increased by 2.4% and 1.3%, respectively, while on a YoY basis, they grew by 12.5% and 8.5%, respectively.

Looking at the CROBEX10 constituents themselves, during April, Atlantska Plovidba experienced the largest increase, growing by 14.7%. This can be attributed to the large demand for shipping, and increasing transportation costs, something that is evident in Atlantska Plovidba’s Q1 results. To read more about them, click here. Next up, we have Končar with 9% growth, a company that also recorded solid growth in revenue, EBITDA, and net profit during Q1 2022. Lastly, the only other company to experience solid growth in stock price was Valamar Riviera, which grew by 8.7%.

On the flip side, Atlantic Grupa lost 5.3% of its value, followed by Podravka with -2.6%. In total, 6 out of 10 CROBEX10 companies experienced some form of growth during April, a trend of recovery that was started already in March, after the decline experienced after the Russian invasion of Ukraine.

Performance of CROBEX10 constituents in April 2022 (%)

Dalekovod Q1 2022 Results

In Q1 2022, Dalekovod recorded a decrease in sales of 37.9%, a decrease of EBITDA from HRK 14.4m to HRK -19.4m and a net loss to majority of HRK 25.7m (vs. a gain of HRK 3m in Q1 2021).

In the first three months of 2021, total sales of Dalekovod Group amounted to HRK 175.3m, representing a decrease of 37.9% YoY. The decrease of the operating income is primarily the result of a lower tender activity during 2020 and 2021. Furthermore, an unstable political situation accelerated already present growth of input prices, consequently amplifying inflation pressures and further lowering Group’s profitability. The highest decrease in profitability was on Group’s parent company, Dalekovod due to the termination of two projects in Ukraine and overall lower activity in Scandinavian countries. Also, the daughter company Dalekovod Ljubljana in Slovenia reported lower than expected activity due to termination of the project Cirkovce-Prince 2x400kV. Group does not expect further losses from cessation of Ukraine projects, as deals with investors are structured to minimize risk. The Production segment revenues was up 13% YoY, amounting to HRK 37m, but it due to inflationary pressures, lower profitability was realized. Dalekovod Mostar reported an increase in sales amounting to 24%, due to high activity in contracted jobs during 2021. On the local market, Dalekovod Project and Dalekovod EMU reported lower sales due to lower customer activity.

Following the capital increase by its new owners and the payment of total capital of HRK 410m in cash in January, the company settled its debt to creditors with funds raised by the issue of new shares. The claims were determined by pre-bankruptcy settlement. The total amount of settled claims amounted to HRK 357m and, consequently, indebtedness indicators and the overall financial position of the Company significantly improved. As capital inadequacies were eliminated company ensured greater resilience to external factors.

Operating expenses, which amounted to HRK 205.9m, decreased 25.6% YoY. This is mostly due to OPEX following the sales trend. The mentioned decrease in OPEX was mostly driven by lower material costs, reporting a 42.1% or HRK 71m decrease. Employee expenses were down nominally just HRK 3.2m or 5.1% YoY to HRK 59m. The number of employees stood at 1,217 at the end of the reporting period, which is 95 employees less YoY. The aforementioned EBITDA decrease (from HRK 14.4m in Q1 2021 to HRK -19.4m in Q1 2022) is mostly due to the decrease in sales. As EBITDA decrease was greater than sales decrease, operating profitability decreased and EBITDA margin was down 162 basis points to -11.1%.

Net financial result improved from HRK -6.9m to HRK 903k due to much lower FX losses, which decreased from HRK 6.1m to HRK 868k.

In the first three months of 2021, Dalekovod recorded a net loss to majority of HRK 26m, which is a direct result of lower sales and generally lower operating profitability, both on EBIT and EBITDA levels.

To emphasize, Dalekovod will be consolidated within the Končar Group from the 2nd quarter of 2022 and Dalekovod’s much stable financial position due to capital increase, which settled debt claims to creditors, should pour a positive view to investors.

Luka Koper Proposes EUR 0.71 DPS

At the share price before the announcement, this would amount to a DY of 2.95%. The ex-date is set for 30 August 2022.

Luka Koper published a statement announcing that the Management and Supervisory Boards of the Company proposed the allocation of the 2021 profit to the General Meeting of Shareholders. Out of the 2021 net profit of EUR 29.6m, EUR 9.94m would be paid out as a dividend, EUR 14.6m would be allocated for other reserves from profit, and the remaining EUR 5.02m would remain undistributed. The EUR 9.94m dividend would mean a payout ratio of 33.2% of the net profit.

This would amount to a gross dividend of EUR 0.71 per share. At the share price before the announcement, this would amount to a DY of 2.95%. the ex-date is set for 30 August 2022, while the payment date is set for 31 August 2022.

As a reminder, Luka Koper has already announced its dividend payout policy in its 2020-2025 business plan. According to the plan, the Company sees increased investments in the core business, and as such, a maximum of one-third of the net profit is to be allocated to dividends, which is the case here.

The dividend proposal is subject to approval by the General Meeting of Shareholders, which is to be held on 6 June 2022. Below we provide you with historical dividends per share and dividends yields of Luka Koper.

Luka Koper Dividend Per Share (EUR) & Dividend Yield (%) (2013 – 2022)