At the end of October 2022, the total deposits of Croatian financial institutions equaled HRK 407.5bn, which is an increase of 12.7% YoY, but a slight decrease of 0.1% MoM.

The Croatian National Bank (HNB) has published its latest report on the consolidated financial positions of the monetary financial institutions, for the month of October 2022. In it, we can see that the total deposits in Croatia amounted to HRK 407.5bn at the end of October, implying an increase of 12.7% YoY, but also a decrease of 0.1% MoM. To put things into perspective, this would mean that on a YoY basis, the total deposits increased by HRK 45.8bn. With the summer season over, and as such the reduction of the growth of deposits stemming from rental income (from private individuals), a slowdown in the deposit growth is expected. However, the growth is still significant and considering that at this point, we have less than a month until the switch to the euro, the growth in deposit rates should accelerate in December.

Breaking the deposits by components, on a YoY basis, demand deposits increased by 15.2% YoY, and amounted to HRK 171.9bn. On the other hand, saving deposits increased by 10.9% YoY and amounted to HRK 235.6bn. On a monthly basis, the increase in demand deposits amounted to 0.9%, while saving deposits decreased by 0.9%, implying that the main driver in the monthly slowdown of overall deposits is the saving deposits.

Croatian deposits breakdown (November 2012 – October 2022, HRKbn)

Source: HNB, InterCapital Research

Meanwhile, household deposits increased by 10.5% YoY and amounted to HRK 267.7bn. On the monthly basis, this increase amounted to 0.5%. Overall, this would imply that 65.7% of all deposits are household deposits, representing a decrease of 1.26 p.p. YoY, but an increase of 0.39 p.p. MoM. The trend we can see in the deposit holdings in Croatia is the usual one that we have seen for a long time now, with the majority of financial assets held in deposits. The current inflation rates are degrading the value of these deposits, but the expected switch to the euro and the appliance of the ECB’s interest rate hikes, which primarily influence the loan interest rates, will also have a positive impact on the deposit rates.

During 9M 2022, Unior recorded a revenue increase of 19% YoY, EBITDA of 16%, and a net income of EUR 10.4m, an increase of 28% YoY.

During 9M 2022, revenue amounted to EUR 214.1m, an increase of 18.7% YoY. Of this, the sale of forgings increased by 16.8%, while the sale of hand tools increased by 18.4%. The Company noted that during the last two years, mechanical engineering gained fewer orders due to the automotive industry issues related to the pandemic and supply chains, during which automotive companies were cautious about new investments and delayed planned investments. At the same time, delays in shipments to customers were also recorded due to the global economic environment in 2022. Combined, this led to a 7.8% decrease in revenue from mechanical engineering. Revenue from the production of machine tools increased by 5.8% YoY. In the tourism segment, revenue increased by 71.2% YoY, mainly as a result of no pandemic-related restrictions on the Company’s operations, as in the last year.

Breaking the revenue by markets, Slovenia recorded a 39% increase, and accounted for 15.8% of the total, mainly as a result of the higher revenue in the tourism industry, which generates revenue in the domestic market only. Foreign markets increased by 15.5% YoY, with the EU market increasing by 9.7%, while the other European country market grew by 17.4%, with the remaining markets increasing by 29.7%. European markets represent 74.6% of the total sales, a decrease of 2.2. p.p. YoY.

Meanwhile, OPEX increased by 17.4%, or EUR 31.3m, and amounted to EUR 211.8m. This came as a result of a higher volume of operations, but also higher COGS (+25% YoY), and higher labour costs (+5% YoY). With faster revenue than OPEX growth, Unior recorded an EBITDA of EUR 24.8m, an increase of 16% YoY. Finally, the net income amounted to EUR 10.4m, an increase of 28% YoY.

Unior key financials (9M 2022. vs. 9M 2021, EURm)

Source: Unior, InterCapital Research

During 9M 2022, investments of EUR 10.4m was made into new fixed assets, an increase of EUR 2.5m YoY. EUR 1.8m was invested in the modernization of production facilities, while EUR 8m was allocated for new equipment. The Company also reiterated its medium-term business plan for the period of 2022-2026. In it, they said that by 2026, they expect that the sales revenue will amount to EUR 304.2m, with an EBITDA of EUR 40.4m.