Cinkarna Celje 9M17: Based on excellent TiO2 environment of rising prices profit levels could reach record levels in 2017.
Sales revenues are up 8.9% YoY in 9M17 back on 1% increase in production volume and a significant surge in average prices from September 2016 onwards. Consequently EBITDA margin expanded by 12.7 p.p to 28.4% in 9M17 with EBITDA generated at EUR 40.8m. Profit also up by 172% to EUR 25.5m, possibly last seasonally weaker quarter should still add onto this. Please note that peers and Cinkarna Celje management believe good pricing environment should continue in 4Q17 as well as into 2018. True, input costs are adjusting as well, so possibly 2017 results could not be repeated in 2018, however profitability should remain strong next year as well. Due to 9M17 and industry development we have again raised our estimates and consequently target price to EUR 248 per share. Buy recommendation remains intact with P/E currently at 6.0x and EV/EBITDA at 2.9x. Dividend level and yield (given the current price) should surge as well. However please be warned liquidity is thin.
Cinkarna Celje dd is a Slovenia-based company, engaged in the production and marketing of titanium dioxide pigment. The Company's product range includes titanium dioxide and sulfuric acid; titanium and zinc sheets; zinc wire, alloys and anodes; printing plates, links and graphic preparations, as well as powder, rubber and anticorrosion coatings. Additionally, it offers construction and joint sealants; facade plasters; mortars and screeds; decorative plasters; protection, waterproofing and quick bonding agents; cement additives; copper and sulfur fungicides, as well as other chemical products. The Company operates through one wholly owned subsidiary, Cinkarna-Kvarc doo Tuzla, incorporated in Bosnia and Herzegovina.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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