In Q1 2023, Kraš recorded revenue growth of 10.5% YoY, an EBITDA decrease of 19.8%, and a net income of EUR 571.6k, a 66.6% decrease YoY. Furthermore, Kraš proposed EUR 1.35 DPS for the 2023 dividend payment, which at the share price before the announcement implied a DY of 1.69%. The ex-date is set for 12 June 2023.

Starting off with the revenue, Kraš’s sales revenue amounted to EUR 36.6m, an increase of 10.5% YoY. Of this, sales on the domestic market amounted to EUR 20.6m, an increase of 13.7% YoY, while the sales revenue in the international markets amounted to EUR 15.5m, an increase of 7% YoY. Kraš also notes that they managed to sell 8.138 tonnes of products, which is 6.1% lower YoY. Of this, the quantity of products sold on the domestic market dropped by 4.8% YoY, while on the international markets, it decreased by 7.5% YoY.

Taken together, this would mean that the increase in Kraš’s sales revenue came as a result of higher prices of products, which is in line with the trends in the industry, and of course driven by high inflation rates.

In terms of op. expenses, they increased by 14.7% YoY and amounted to EUR 36.7m. Of these, the material expenses increased the most, growing by 25.6%, and amounting to EUR 26.6m, while staff expenses decreased by 7.8% YoY, and amounted to EUR 7.5m. Kraš further notes that the expense growth was primarily driven by high commodity prices, packaging, energy, and other costs, all of which further influenced profitability development.

Kraš further noted that they continue to improve the operational processes, optimize internal resources, and continually work on mitigating cost increases across all segments. Despite this, the EBITDA amounted to EUR 3.04m, a decrease of 19.8% YoY, driven by the faster OPEX than revenue growth. This would also imply an EBITDA margin of 9.2%, a decrease of 2.3 p.p. YoY.

Moving on to the net financial result, it amounted to EUR -93.2k, (Q1 2022: EUR 202.6k), mainly driven by lower financial revenue due to lower FX gains, while the financial expenses remained roughly the same. Taken together, this led to an EBT of EUR 841.2k, a 59.4% reduction YoY. Finally, the net income of the Company amounted to EUR 571.6k, a 66.6% reduction YoY. This would also mean that the net profit margin amounted to 1.7%, a reduction of 3.4 p.p. YoY.

Kraš key financials (Q1 2023 vs. Q1 2022, EUR ‘000)

Source: Kraš, InterCapital Research

Furthermore, Kraš also published a GSM call, in which they detailed the dividend proposal for 2023. According to the call, Kraš proposed EUR 1.35 DPS for the 2023 dividend payment, which at the current share price would imply a DY of 1.69%. The ex-date for the dividend payment is set for 12 June 2023, while the payment date is set for 10 July 2023. Of course, the dividend proposal is subject to approval at the Company’s GSM, which will be held on 7 June 2023.

In March, passenger car registration in the EU increased by 28.8% YoY, totaling 1,087,939 units. Meanwhile, looking at the first quarter of 2023, EU registration of new cars increased by 17.9% YoY overall. In Croatia in the mentioned period, passenger car registration reported a much more pronounced increase of 36.6% YoY.

In March 2022, passenger car registration in the EU increased by 28.8% YoY, totaling 1,087,939 units. The most significant increase reported in the EU in March by far was in Italy, where the reported increase amounted to 48.7k units, representing a 40.7% YoY increase. Italy is followed by Germany, where a 40k unit increase can be noted (+16.6% YoY). Germany is closely followed by Spain, which is also considered a major and significant region, noting an increase of 39.6k units (+66.1% YoY). Finally, the last major region within the EU, France, also noted a strong growth of 35.6k units, amounting to 182.7k units (+24.2% YoY).

When observing the first quarter of 2023, the situation is pretty similar – EU registration of new cars increased by 17.9% YoY, reaching 2.7m units registered in total. Overall, EU new car registration saw a strong increase on a YoY basis. However, the previous year was influenced by the semiconductor shortage, which started at the beginning of 2022. Consequently, most EU markets showed strong growth compared to 2022. When observing the whole period, each of the major markets within the EU noted a positive development. Germany reported just a slight growth (+6.5% YoY), while Spain, Italy and France all noted strong growth of 44.5%, 26.2% and 15.2%, respectively. Further, a number of smaller regions also noted a strong double-digit growth.

Looking at the region, when observing the whole period since the beginning of the year, Croatia reported an increase of 36.6% YoY, amounting to 13.2k units registered. Slovenia reported a somewhat worse situation – when observing the first quarter, the development was less pronounced with 5.5% growth.

Fuel type cars market share [March 2023]

Source: ACEA, InterCapital Research

During March 2023, there was a rise in the number of hybrid cars and battery electric registered in the EU, now representing 24.3% and 13.9% of the market, respectively. Still, petrol remained the top choice for newly-registered cars in the EU, with a market share of 37.5%, which is on par with the share recorded in 2022.