In February 2024, the total equity turnover on ZSE further grew by 12.7% MoM, and a much as 53.8% YoY. At the same time, the main index on the exchange, CROBEX, increased by 2.3% MoM and amounted to 2,727.54 points.

During February 2024, the equity turnover on the Zagreb Stock Exchange, ZSE, picked up pace, both on an MoM and YoY basis. As such, during the month, the total equity turnover amounted to EUR 33.4m, further increasing by 12.6% MoM, and noting a strong 53.8% YoY growth. Furthermore, equity block turnover amounted to EUR 3.3m. Excluding the block trades, the total equity turnover during January amounted to just over EUR 30m. As such, the average daily turnover also picked up, amounting to EUR 1.6m during February.

Monthly equity turnover on ZSE (January 2022 – February 2023)

Source: ZSE, InterCapital Research

In terms of the most traded stocks, Končar Group leads the way at EUR 3.4m, or 10.2% of the total equity turnover. The attention on ZSE can also be seen in Končar’s share price development during February. Following Končar Group, there are Zaba and Podravka, with EUR 3.1m and EUR 2.7m, or 9.4% and 8% of total equity turnover, respectively. Ericsson NT is to follow at EUR 2.6m, or 7.7%, Končar D&ST, at EUR 2.1m, or 6.4%, and Adris (pref.) at EUR 2m, or 6.1% of total turnover on ZSE. Together, the top 5 most traded stocks made up 41.7% of the total equity turnover during February, while the top 10 most traded stocks made up 67.6%. This is in sharp contrast to the Ljubljana Stock Exchange, where trading is concentrated to a high degree in the first 5, and especially the first 10 most traded stocks. Of course, given the difference in the number of listed companies on ZSE/LJSE, this is to be expected.

We note that the end of February was marked by the quarterly results season, resulting in overall volatility on the Zagreb Stock Exchange. Turning our attention to the performance of the specific Croatian blue chips, during February, the largest increase was recorded by HPB with an increase of as much as 27.3% MoM, closely followed by Končar Group with 17.1% MoM growth. Končar grew on the back strong Q4 and the whole 2023 overall. 2023 was the record year considering both top-line and net income to the majority. The Končar Group top line grew by as much as 28%, translating to a 35% growth in the bottom line. Besides that, Končar reported a strong backlog position currently standing at EUR 1.42bn. Končar’s normalized  EBITDA margin grew by 3.8 p.p. to a double-digit 12.4%.

Following HPB and Končar Group, there is Adris (pref.) with a slight 3.4% growth. On the other hand, Atlantska Plovidba recorded a decline of 10.7%, while Podravka noted a decrease of 5.6%. Further, Span decreased by 4%, on the back of lower than expected Q4 results. Finally, HT and Valamar Riviera remained overall flat during February. Overall, CROBEX noted a strong increase of 5.2% during months.

Performance of select Croatian companies (February 2024, MoM, %)

Source: Bloomberg, InterCapital Research

During 2023, Kraš recorded revenue growth of 13% YoY, an EBITDA increase of 27%, and a net income of EUR 6.7m, an increase of 39% YoY.

Last week, Kraš published its FY 2023 results, and in this overview, we’re bringing you the highlights. Starting off, revenue amounted to EUR 171.6m, representing an increase of 13% YoY. Of this, revenue from the domestic market amounted to EUR 94.3m, an increase of 12.8% YoY, while revenue from the international markets amounted to EUR 75m, growing by 13.4% YoY. On the domestic market, a 3.9% increase in sales volume was recorded, while in the international markets, an increase of 5.8% was recorded.

This would mean that on the domestic market, only 30% of the sales revenue growth came from higher volumes sold, while 70% came from higher prices. The situation is a little bit better in the international markets, with 44% of the sales revenue growth coming from higher volumes, while 66% came from higher prices. As such, the majority of the revenue growth during the year came from higher prices.

In terms of operating expenses, they amounted to EUR 170.8m, a 15% increase YoY. Kraš noted that through a strong focus on optimizing internal resources and rationalization of all expense segments, they were able to keep cost growth under control. Inside the OPEX, material expenses increased the most, growing by 18% YoY to EUR 116m, due to the higher costs of commodities and materials used for production, while staff costs remained roughly the same, at EUR 33.2m (-0.2% YoY). While no breakdown of this is available, the no. employees was reduced by 5.4% YoY to 2,071 at the end of 2023. As such, staff expenses remaining unchanged would be under the influence of higher wages offered, and lower no. employees employed.

Moving on, EBITDA amounted to EUR 17.9m, an increase of 27% YoY, implying an EBITDA margin of 10.5%, an improvement of 1.13 p.p. YoY. In terms of the financial income, it declined by 35% YoY to EUR 833.4k, under the influence of lower FX gains. A similar situation is presented for the financial expenses, which declined by 48% YoY to EUR 626.5k, also under the influence of lower FX losses. As a result, the net financial result amounted to EUR 206.9k, an improvement of 169% YoY.

As a result of all of the above-described developments, Kraš’s net income amounted to EUR 6.7m, an increase of 39% YoY. This would also mean that the net income margin amounted to 3.9%, an increase of 0.72 p.p. YoY.

Kraš key financials (2023 vs. 2022, EURm)

Source: Kraš, InterCapital Research