IC Market Espresso 8 Sep 2020

 
Indebtedness of Slovenian Blue Chips – H1 2020

For today, we decided to bring you a brief overview of the indebtedness and capital structure of Slovenian blue chips.

For today we decided to present you with a comparison of Slovenian blue chips. To be specific, we observed how indebted Slovenian companies are by comparing net debt to EBITDA (trailing 12 months) and % of debt financing. We also added how much additional debt these companies could take in order to reach 3xEBITDA.

Note that Slovenian financials (NLB, Triglav and Sava Re) were excluded from the mentioned overview.

Net Debt/ EBITDA (Trailing 12m)

Among observed companies Krka and Cinkarna Celje operate at a negative net debt, meaning their cash position (short term financial assets + cash and cash equivalents) exceed their financial debt. Of the other constituents, Telekom Slovenije has the highest indebtedness of 2.03xEBITDA. Next comes Petrol with a net debt/ EBITDA of 1.56x. Luka Koper follows with a net debt/EBITDA of 0.09x, while the company’s 2020 target is to have a negative net debt (-0.4x).  Looking at the chart above, one can safely conclude that the all Slovenian blue chips are well within the reasonable levels of indebtedness.

We also observed how much additional debt companies could take to reach 3xEBITDA which is in the region considered as a breaking point and red flag in terms of indebtedness.

This analysis provides information on the companies’ potentials for takeovers, but also the potential for an internal growth through additional borrowing. It’s important to point out that companies with net debt above 3xEBITDA are not necessarily too indebted as not all them are equal and their industries differ (and the other way around – certain industries are not prone to hold any leverage).

Potential Additional Debt (EUR m) to Reach 3x EBITDA

Turning our attention to the capital structure, all of the observed companies are mostly equity funded. Of those, Krka leads the list with 99.3% equity, followed with Cinkarna Celje with 92.4%. On the flip side, of the observed ones, Telekom Slovenija is operating with most debt of all companies (41.8%).

Capital Structure of Slovenian Companies 

SBITOP Ends Yesterday’s Trading Day up +1.67%

SBITOP observed a solid increase of 1.67%, as 7 of its constituents ended the trading day in green.

Yesterday, the Slovenian Stock Exchange has recorded a low turnover of EUR 0.47m, of which Krka accounted for more than 80% (EUR 0.38m).

SBITOP yesterday observed a solid increase of 1.67%, as 7 of its constituents ended the trading day in green. NLB leads the list of gainers with a high daily increase of 8.25%, closing at EUR 42 per share. It is however important to note that such an increase came on the back of a very low turnover, as only a single share of NLB was traded yesterday during the opening of the market. At the current share price, the bank is traded at a P/B of 0.44.

Cinkarna Celje comes next with +3.7%, however on the back of very low turnover as well. Next come Sava Re with +1.83% and Telekom Slovenije with +1.32%.

SBITOP ended the day at 852.03 points, which still represents an 8% YTD decrease.

Share Price Performance of SBITOP Constituents