At the current share, the dividend yield is 3.9%. Ex-dividend date is 18 June 2019.

INA published a convocation to the General Assembly in which they proposed HRK 1.25bn to be paid out as dividend to their shareholders. The dividend would be paid out of the 2018 net profit and would translate to HRK 125 per share. The dividend per share represents an increase of 54% YoY.

At the current share, the dividend yield is 3.9%. When observing the company’s dividend yield, this represents a higher than usual dividend yield and an increase by 1.4 p.p YoY.

Note that the ex-dividend date is 18 June 2019.

In the graphs below, we are bringing you a historical overview of the company’s dividend per share and dividend yield.

Trading statistics for April 2019 show an average daily turnover of roughly EUR 1.25m (+41.1% YoY). Meanwhile, the major index CROBEX ended April with an increase of 2.2% ending at 1,837.98 points.

The Zagreb Stock Exchange published their trading statistics for March 2019, showing an average daily turnover of EUR 1.25m. This represents an increase of 41.1% YoY.

Of the total traded value traded in the period (excluding block transactions), HT generated 17%, followed by Valamar with 15%, Adris (preferred shares) with 8%, Podravka and ZABA with 7%.  These 5 shares generated more than half of the turnover recorded by the entire market.

When observing the total equity market capitalization, it decreased is by 3.1% YoY. Ina’s share is the biggest constituent of the total exchange’s equity market capitalization, accounting for about 24.1% of the total value. Next, come two Croatian banks – Zagrebacka banka and PBZ with 13.5% and 10.7%, respectively. Further, HT holds 10% while Adris group’s regular shares accounts for 4% of the total market capitalization value.

When compared to the beginning of the month the main index CROBEX increased by 2.23%, ending at 1,837.98 points. Meanwhile, CROBEXturist observed the highest increase of 5.5% of all sector indexes. On the flip side, CROBEXtransport recorded the highest decrease of 4.5%.

In Q1 the company observed a decrease in sales of 51.5%, a reduction in operating loss by HRK 13m and a net income of HRK 2.8m.

As Viro published their Q1 2019 report, we are bringing you key takes from it. According to the report, the company observed a decrease of 51.5% YoY in sales, amounting to HRK 105.1m. Meanwhile, operating revenues decreased by 48.6%, amounting to HRK 112.3m. The company does not give much explanation to such a decrease, but it could partially be attributed to the decrease in the price of sugar which has been fluctuating in the past year and was lower by 7.5% YoY in Q1 2019. The fluctuation in the price in the recent years could be attributed to the EU’s abolishment of quotas on sugar production in 2017, which led to a surplus of sugar produced, resulting in a lower price.

Operating Revenues (Q1 2019 vs Q1 2018) (HRK m)

Turning our attention to the company’s operating expenses, they amounted to HRK 112.5m, which is a decrease by HRK 119.4m (-51.5%).  Such a high decrease could mostly be attributed to a decline in material costs by HRK 81.3m.

Lower operating expenses led to an improved EBITDA of HRK 11.2m, which represents an increase by HRK 11.1m. However, when observing EBIT, the company recorded an operating loss of HRK -0.15m, which is a reduction in loss by HRK 13m.

Going further down the P&L, in Q1, Viro recorded a net financial gain of HRK 2.9m, which lead to the company having a positive net income.

In Q1, net income amounted to HRK 2.8m, which represents a decrease of HRK 5.2m (-65.1%).

EBITDA & Net Income (Q1 2019 vs Q1 2018) (HRK m)

As a reminder, at the end of 2018, Viro, Sladorana and Tvornica šećera Osijek have signed a joint venture deal, based on which they will join their production capacity, know-how and experience and will establish a new company called Hrvatska industrija šećera.

In this joint venture, Viro and Sladorana will own 60% of the stake, while Tvornica šećera Osijek will own 40%. The main purpose of the joint venture is to create a bigger and a more efficient business system in the growing market liberalization conditions and a fiercer competition on the European market, caused by the above-mentioned abolishment of production quotas by the EU. 

In Q1 BRD recorded an increase in net banking income of 8.3% and a decrease in net income of 27.3%.

As BRD published their Q1 2019 report, we are bringing you key takes from it. According to the report, the company observed an increase in net interest income of 10.3% YoY, amounting to RON 514m. This could be attributed to higher volumes and positive structure shifts, as well as a favorable interest rate environment (ROBOR 3M at 3.10% in Q1 2019 vs. 2.03% in Q1 2018).

Net fee and commission income remained flat at RON 184m, despite expanding volumes due to increasing price pressure on transactional banking services.

When observing net banking income, it amounted to RON 784m, representing an increase of 8.3%, which could be attributed to a healthy commercial momentum of both retail and corporate segment.

BRD Performance (Q1 2019 vs Q1 2018) (RON m)

Moving further down the P&L, operating expenses observed an increase of 14.9%, amounting to RON 442m. The increase could mostly be attributed to a rise in contribution to Deposit Guarantee and Resolution Funds which doubled to RON 72m. As a result, CIR amounted to 56.4%, which represents an increase by 3.2 p.p. Excluding the Deposit Guarantee and Resolution Funds cumulated contributions, the cost/income ratio improved by 1.2. p.p YoY.

In Q1, the company observed a net income of RON 301m, which represents a decrease of 27.3% YoY. The lower net income was influenced by lower cost of risk write-backs and higher regulatory costs.

Net Income (Q1 2019 vs Q1 2018) (RON m)

When observing the company’s balance sheet, assets remained flat at RON 56.03bn. Of that, net loans and advances to customers account for 53.2%. On the other hand, liabilities amounted to RON 48bn. Of that deposits to customers account for 92%. When observing loans and deposits, net loans to customers observed an increase of 4.4%, amounting to RON 29.1bn. Deposits to customers remained flat at RON 44.4bn. Consequently, this led to an increase in L/D ratio by 3 p.p. amounting to 65.5%, which is still relatively low.

Turning our attention to the asset quality, NPL ratio was at 4% in March 2019, which represents a decrease by 2.4% YoY. Meanwhile, the coverage ratio remained relatively flat at 75.1%.

Net cost of risk was once again positive and amounted to RON 26m of write-backs, compared to RON 153m in Q1 2018. Lower cost of risk write-backs are a consequence of fading effects of exceptional items and lower recoveries from defaulted portfolios.

In Q1, the company observed an increase in sales of 11%, increase in operating profit of 19.3% and an increase in net income of 35%.

In Q1 2019, OMV Petrom observed an increase in sales of 11% YoY, amounting to RON 5.4bn. The increase could be attributed to higher commodity prices in RON terms and higher sales volumes of electricity and petroleum products, partially offset by lower sales volumes of natural gas.

When observing sales by segment, Downstream Oil accounted for 70%, Downstream Gas accounted for 28% and Upstream for 2%.

In Q1, operating expenses amounted to RON 4.3bn, which represents an increase of 12.4% YoY.

Operating profit amounted to RON 1.29bn, which represents an increase of 19.3%. The operating result was mostly driven by higher commodity prices.

Clean Current Cost of Supply (CCS) operating profit increased by 28% to RON 1.2bn. This was supported by positive evolution, both in Upstream, triggered by higher prices, and in Downstream, as a result of higher sales volumes of fuels and electricity.

Note that the CCS effect represents the difference between the cost of sales calculated using the current cost of supply and the cost of sales calculated using the weighted average method after adjusting for any changes in valuation allowances, in case the net realizable value of the inventory is lower than its cost.

Going further down the P&L, net financial result improved from a loss of RON -63m in Q1 2018 to a gain of RON 24m in Q1 2019, reflecting higher interest income mainly in relation to the clarification of a tax-related topic and favorable FX effects.

Net income attributable to stockholders was RON 1.15bn, representing an increase of 35%.

The Clean CCS net income attributable to stockholders was RON 1.06bn.

OMV Petrom Performance (Q1 2019 vs Q1 2018) (RON m)

Turning our attention to CAPEX, it amounted to RON 826m, representing a decrease of 2%. CAPEX consisted mainly in Upstream investments of RON 650m. Downstream investments amounted to RON 168m, of which RON 158m were in Downstream Oil. Note that for 2019 CAPEX (including capitalized exploration and appraisal) is currently expected to be around RON 3.7 bn, of which about 75% in Upstream.

The total estimated value of the project is EUR 360.4m and the estimated completion deadline is 2021.

Transgaz published a document in which they stated that the company obtained the right to start the works on the gas project of common interest ” Black Sea – Podisor Pipeline for taking over Black Sea gas”. The company stated that this strengthens the company’s strategic role both in the European and national energy infrastructure.

The route of the project follows the general direction from South-East towards West crossing the counties of Constanța, Călărași and Giurgiu.

Note that the total estimated value of the project is EUR 360.4m and the estimated completion deadline is 2021.