IC Market Espresso 4 Sep 2019

Takeaways from LJSE Webcast on Petrol Group H1 2019 results
Ljubljana Stock Exchange Webcast ‘Slovenian Listed Companies Online’ was held yesterday where the Petrol Group has presented its H1 2019 results and company update. We are bringing you key takes from it.

On the yesterday’s Ljubljana Stock Exchange Webcast, the topic discussed were the financial results for the first half of the financial year 2019. Petrol followed as the second with Mr Stebernak, Member of the Management Board and CFO, who has presented the results of Petrol. For the first 6 months of 2019, sales revenue has amounted to EUR 2.7bn and it has increased 15% YoY. Mr Stebernak has emphasized again, the fact know for Petrol, that performance of sales is not the closely watched measure as it is very dependent on the prices of energy products and therefore it is strongly influenced by it.

Business segments’s shares in EBITDA have changed compared to the end of 2018 and shares are in line with business plan for the period until 2022. in H1 2019 EBITDA totalled EUR 99m, which is a 25% increase YoY. 44% of the Petrol Group’s EBITDA was in H1 2019 derived from its sales of oil products, while at the end of 2018 this share was at 60%. Sales of merchandise and related services accounted for 17% of the Group’s EBITDA, while in 2018 it has amounted to 22%. Sales of other energy products (natural gas and electricity) are becoming more important as it has accounted for 15% or EBITDA (4% 2018). Sales of energy and environmental solutions have accounted for 13% of EBITDA, sales of liquefied petroleum gas for 7%, and the production of electricity from renewable sources for 4% of its EBITDA. EBITDA was also influenced by introduction of IFRS 16 as operating leases were recognized under financial liabilities so what was in H1 2018 recognized as operating expenses for leases was in H1 2019 recognized as depreciation. Therefore, part of EBITDA growth is due to change in accounting standards. Mr Stebernak has also pointed out that electricity trading hedging instrument was in H1 2019 recognized in financial expenses, which was in previous years recognized under operating expenses. So, in order to calculate real operating profitability of Petrol, financial expense stemming from electricity wholesale trade hedge should also be deducted from EBITDA. Since at this point it is not announced how much is this hedging amount exactly, normalized EBITDA cannot be calculated so normalized EBITDA growth would be lower than the reported EBITDA. CEO has pointed out that the company is looking into application of this accounting standard but at this point, this part of wholesale electricity trade will be presented under financial expenses.

In order to look at real gauge of Petrol’s operating profitability, we can look at Petrol Group’s net profit that has amounted to EUR 40.7m and is up 4% YoY. Net income is in line with Petrol’s budget which implies that management was successful in fulfilling its projected goals. The net income expected for 2019 is at app. EUR 97m.

The Petrol Group has also announced that from this Monday is has finalized transaction with Crodux Plin in Croatia after regulatory clearance was obtained in H1 2019. So, now Petrol has taken over its assets and has started to supply LPG on Croatian market from Crodux’s storage capacity. Capex in H1 2019 has amounted to EUR 31m and as part of it was shifted to H2 due to Crodux plin M&A deal postponement. 56% of capex was invested in extension of retail network while the rest in energy and environmental solutions and other projects. Production of electricity from RER is also underway and according to plans as three new projects are planned while investments in fixed assets are expected at the end of this year and throughout 2020. Investments in fixed assets are in line with the annual budget and in 2019 are expected at the level of EUR 101m.

Activity on the ZSE in August 2019
Trading statistics for August 2019 show an average daily turnover of roughly EUR 0.9m (-12% YoY). Meanwhile, the major index CROBEX ended August with a decrease of 2% ending at 1,873.36 points.

The Zagreb Stock Exchange published their trading statistics for August 2019, showing an average daily turnover of EUR 0.90m. This represents a decrease of 12% YoY, which is the first time since February 2019 that the equity market recorded a YoY decrease in average daily turnover.

Of the total traded value traded in the period (excluding block transactions),  Adris (preferred shares) generated 14.3%, followed by Optima Telekom with 14%, Valamar with 12.4%, AD Plastik with 6.6%, Liburnia Riviera Hoteli with 6.2%. These 5 shares generated almost two-thirds of the turnover recorded by the entire market.

When observing the total equity market capitalization, it observed an increase of 1.2% YoY. Ina’s share is the biggest constituent of the total exchange’s equity market capitalization, accounting for about 22.9% of the total value. Next, come two Croatian banks – Zagrebačka banka and PBZ with 13.6% and 10.5%, respectively. Further, HT holds 9.1% while Adris accounts for 3.6% of the total market capitalization value.

When compared to the beginning of the month the main index CROBEX decreased by 2%, ending at 1,873.36 points. Note that this is the first time this year that the index has observed a decrease at the end of the month. Meanwhile, CROBEXtransport observed the highest increase of 9.6% of all sector indexes. On the flip side, CROBEXkonstrukt recorded the highest decrease of 6.7%.

Average Daily Turnover on the ZSE (EUR m)

AD Plastik Concludes New Deals Worth EUR 46.5m

To put things into a perspective, the deals make up for around 25.3% of the company’s T12 sales.

Ad Plastik published a document stating that the company has concluded new deals whose total value amounts to EUR 46.5m. The mentioned deals relate to various vehicle models in the Russian market. To put things into a perspective, the mentioned deals make up for around 25.3% of the company’s T12 sales.

To be specific, EUR 24m was concluded with the Renault-Nissan-AvtoVAZ Alliance for the new vehicle model Lada Granta that will be produced in their plant in Togliatti. Further, EUR 12m was concluded with the same customer for the new vehicle models Renault Logan and Sandero.

Finally, EUR 10.5m was concluded with Volkswagen for the vehicles VW Tarek and Škoda Karoq. AD Plastik Kaluga will be producing trunk trims for these models. Note that the start of serial production is planned for the end of 2020 with an estimated project duration of 7 years.