Slovenian Weekly Report 9.4.2018-13.4.2018
Intereuropa sale process:
Intereuropa d.d. published that SID banka d.d., acting as Coordinator for collecting offers of financial counselling under the Intercreditors' Agreement, that the banks SID banka d.d., Nova Ljubljanska banka d.d., Gorenjska banka d.d., SKB Banka d.d. and Banka Intesa Sanpaolo d.d., signed the engagement letter regarding the sale of Intereuropa d.d. shares with PwC Svetovanje d.o.o.. The sale will entail 9.168.425 ordinary shares and 10.657.965 preferred shares, or in total 54.47% of voting rights and 72.13% ownership stake.
This was expected and often rumored in the media – we have included the speculation in our 2017 report published in mid March. Namely Intereuropa shareholder structure is a consequence of restructuring and debt-to-equity conversion in times of crisis, so sooner or later it was a logical step banks would divest the company. In addition, majority stake in Intereuopa was on sale in 2014, however the process ended unsuccessfully.
The difference between 2014 and 2017 is quite vast, in terms of macro environment, Intereuropa consolidated balance sheet condition and results. Consequently possibly this time the process will entail more interest.
On the other hand it should be noted that Intereuopa shares have already surged significantly from levels seen in 2014, surging from levels around EUR 1 per share to levels around EUR 2 per share. Given the TTM multiples its therefore a question how much upside remains to investors. True, if the past is any indication, this still leaves ample room for speculations and volatility.
Cinkarna Celje surprised with dividend announcement, backed by high profit growth in 2017. Namely management proposed a dividend of EUR 26.52 per share or 13% gross yield (we expected half of the profit or roughly EUR 17).
Krka management proposed a 5.5% dividend hike to EUR 2.90 per share. This is 5 cents higher than we expected and implies a gross dividend yield of 5.1%. Its also an unsurprising continuation of dividend growth policy.
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.
Intereuropa dd is a Slovenia-based company engaged in the provision of logistic services. The Company provides its services in three divisions: Land Transport, covering groupage, express transport, road transport, railway transport, customs services and distribution of spare parts; Intercontinental transport, including air transport, sea freight, shipping agency and automobile logistics; and Logistics solutions division, involved in the storage, distribution and logistics projects. As of December 31, 2011, the Company operated through 16 subsidiaries and one joint venture in such countries as Slovenia, Croatia, Bosnia and Herzegovina, Macedonia, Serbia, Kosovo, the Russian Federation, Ukraine, Montenegro, Albania, Germany and France.
Krka is a public generic pharmaceutical company based in Slovenia. Co. is engaged in the development, production, sale and marketing of human health products (prescription and selfmedication pharmaceuticals and cosmetics), animal health products and health resort and tourist services. Co. focuses on a range of generic prescription pharmaceuticals, which are marketed under Co.'s own brands. Co. offers customers in over 70 countries a broad range of prescription pharmaceuticals, self-medication products and animal health and cosmetic products. Co.'s activities are supplemented by health resort and tourist services of Terme Krka.
Luka Koper dd is a Slovenia-based company engaged in the provision of port and logistics services in the Port of Koper. The Company provides basic port services, such as sorting, palletising, sampling, protection, labelling, weighing, cleaning and other services; management of the economic zone; supporting services; cargo handling; warehousing, and integrated logistics solutions. Through its terminals, the Company handles general cargo, containers, vehicles, dry bulk cargo, liquid bulk cargo, cereals and fodder, livestock, minerals, timber, fruit, alumina, minerals and energy. The Company also offers terminals for cars, containers and roll on-roll off services. Additionally, the Company is engaged in hotel and catering services, as well as waste collection and recycling. As of December 31, 2011, the Company's subsidiaries included Luka Koper Pristan doo, Luka Koper INPO doo, Adria Terminali doo, TOC doo and Luka Koper Deutschland GmbH, as well as several associated companies.
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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