Krka 1H17: Staging a comeback? 1H17 results strong and above expectations.
Namely revenues amounted to EUR 655m (+8.5% YoY) with high growth in East Europe counter weighting a decrease in West Europe. Margins also considerably improved and returned to levels before 2016. EBIT and EBITDA margin were 18.9% and 27.1% respectively with EBITDA growth of 21% YoY to EUR 177m. Net profit margin increased from 11.6% in first half 2016 to 14.0% in first half 2017. With EUR 91.7m of net profit Krka is likely to significantly surpass last years EUR 108.4m, especially as better 2H is seen for West Europe. Stronger sales and margins with lower CAPEX guidance warrants a higher target price, which lifted to EUR 64. Consequently recommendation also increased from hold to buy, but possibly investor sentiment will need further encouragement by results / new strategy to pick up.
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.
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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