Slovenian Weekly Report 11.12.2017-15.12.2017
Cinkarna Celje published its 2017 assessment and 2018 plan:
- It seems 2017 will be slightly weaker than we expected after superb 3Q17 when we upgraded our estimates. We know there is a negative seasonality effect in 4Q, however we were expecting slightly lower QoQ decrease in 4Q17 than we usually would. This could prove to be overly optimistic.
- But more importantly Cinkarna Celje is more upbeat regarding 2018 than we were, as we have expected that at least costs will surge in 2H18, contracting margins. But it seems sweet spot achieved in 2017 will continue in 2018.
- All in all Cinkarna Celje expects EUR 2.4m more EBITDA and EUR 5.5m more profit than we expected for these two years. As usually management was prudent with expectations and plans (now it labeled its sales plan as optimistic and ambitious), this is a good sign. They believe titanium dioxide prices will continue to grow (roughly 6%). All in all plans are very encouraging.
Newspaper Delo labeled Midea as a possible preferred strategic partner for Gorenje. As expected there will be a lot of rumors and speculations regarding Gorenjes search for a strategic partner which could affect stock price.
Petrol Group (oil retailer and energy player) released its 2018 plan:
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- The values are more or less in line with stable growth from 2016 and 9M17 onwards and also in line with past strategic plan till 2020. It also builds on 2017 plan announced at 2016 yearend and being delivered during 2017.
- For 2018 they see adjusted gross profit of EUR 440.5m, based on sale of 3.1m tons of petroleum products, 178.4 thousand tons of LPG, 18.2m MWh of natural gas and 140.2 thousand MWh of heat. In addition they see sales of merchandise products at EUR 550.4m, with end number of stations at 498, up by 3 versus current condition.
- EBITDA breakdown:
- 55% derives from petroleum products;
- 19% from merchandise sales;
- 14% through energy and environmental solutions;
- 8% LPG;
- 4% from sales and trading in other energy products.
- Net debt to EBITDA should be at 2.0x.
- CAPEX planned at EUR 99m.
- No surprise in publication, albeit most financial numbers are slightly ahead of our estimates (EBITDA at cca 6.0m) – Petrol remains on steady path.
- Forward P/E would be at 8.4x.
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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