Cinkarna Celje 1H18: 2018 will be another record year with excellent profitability and dividends to follow. But industry is cyclical and peaking.
Cinkarna Celje has provided investors with record results, as it generated EUR 98.2m of revenues, up 4.8%, EUR 33.6m of EBITDA, or up by 45%, and EUR 22.7m of profit, up by 63%. 2Q18 profit amounted to EUR 9.7m vs EUR 13.0m achieved in 1Q18. Therefore 1H18 results are above management expectations, as well as our, and are on very good track for significant beat. Also balance sheet remains strong with net cash position, even though we are deducting environmental provisions and even though Cinkarna Celje paid a hefty dividend. True, industry is cyclical, input costs are growing while end-consumer prices are starting to lower. Therefore, we can expect a normalization in industry and for Cinkarna Celje while investor sentiment can quickly sour. However, we believe valuations are low enough from long term perspective while dividend could remain high. Target price remains at EUR 275, together with buy recommendation.
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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