Masterplast - Remarkable Results On Hungary, EBITDA Margin Improves Further

Masterplast – Instant Earnings Comment

Recommendation:  Accumulate (unch.)

Target price (12M): Under Revision (unch.)

 

• Masterplast reported revenues came strong in the seasonally strongest quarter, up by 10.8% y-o-y to EUR 31.4 mln. EBITDA came to EUR 2.6 mln, up by 21% y-o-y, as a result of higher revenues and lower other OPEX. EBITDA margin also improved accordingly to 8.4% from 7.8%.
• Revenues improved y-o-y by 10.8% on the back of strong Hungary (which contains partial contribution from newly acquired T-cell). Hungarian sales increased 31.9% y-o-y despite the mild deceleration in the quarter regarding industrial growth. Romania and Exports were strong, these three segments compensated for lower sales in Poland. With regards to Poland, according to the Company, generally there was a slower growth in building industrial output.
• On a product breakdown, Thermal insulation systems and industrial applications were the main drivers of the solid growth.
• Material costs also increased above 10% y-o-y while due to higher number of employees in Serbia and stretched wages, PEREX also increased substantially, 26.9% y-o-y. This was compensated by the positive change in inventories and resulted in higher commercial margins as well as improved EBITDA margin (8.4% vs. 7.8% a year ago).
• Other financial income improved significantly, to +397 ths from -337 ths a year ago, due to favorable exchange rate impact in the quarter (weaker HUF and stronger UAH).
• EPS output in Serbia went as planned while foam production in Kál was lower than expected.
• All in all, Masterplast posted very strong results in the seasonally strong quarter and is on track to reach EUR 7 million EBITDA for 2019. Mgmt expects outlook to remain positive but the main question is whether Hungarian growth would stay sustainable in our view.

 

 

 

Hai Thanh Le Phuong, CFA
Head of Research

CONCORDE SECURITIES LTD.

Hillside
55-61 Alkotás street, H-1123 Budapest.
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MEMBER OF THE CONCORDE GROUP

 

 

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