Luka Koper 1H17: Top line growth translating into strong bottom line growth.
Cargo handling increasing by 5.7% YoY in 1H17 with 2.7% YoY growth in 2Q17 translated into 5.8% YoY sales revenues and 8.9% increase of EBITDA. Consequently Luka Koper is benefiting the strong environment not only by growth but also margin improvement. In addition better net financial result contributed to 15.4% YoY increase of net profit to EUR 27.4m. While sales revenues are in-line with our expectations, margins are higher and this contributed to earning beat for about EUR 3.7m, with EUR 2.8m deriving from 1Q17. Nevertheless we have kept our estimates – albeit end profit beat is becoming ever more likely. Operationally and financially we remain optimistic while this also led to attractive valuations (P/E below 10x). On the other hand it’s true that corporate governance related topic plus second railway tier project continue to burden news flow and provide headwind. All in all our target price is at EUR 38, warranting an unchanged buy recommendation.
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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