Masterplast - Sound Q2 despite lower steam in growth - Instant Earnings Comment from Concorde Ltd. (Hungary)

 

Masterplast - Instant Earnings Comment

Recommendation: Accumulate (unch.)

Target price (12M): Under revision (prev. 740)

• Masterplast reported EBITDA came to EUR 2.4 mln in the seasonally strong quarter, up 16.5% compared to the same period of last year, driven by revenues (+6.2%) and higher other operating income. While revenues remained solid, this was somewhat under the budget according to the Company”s comment due to bad weather conditions, lower production in Serbia and decline in packaging materials demand.
• Due to increasing commercial margins, EBITDA margin also improved to 8.4% from 7.7%. On a geographical breakdown, Hungary remained strong (+12%) together with Exports and Poland, Ukraine.
• Romania again reported a decline of 12% y-o-y despite increase in dry construction materials. On a product level, the Company grew mostly in the thermal insulation segment and dry construction system segment.
• Amortization increased as a result of heavy CAPEX from last year.
• Net profit thanks to the favorable developments increased by 9%.
• The Company expects good economic environment for the construction sector to continue in H2 and focuses on the newly bought T-Cell operation.
• The Company also announced that the Romanian tax authority determined a VAT liability of EUR 267 ths+EUR 85ths interest (ca. HUF 7.9 per share) for which the Company asked for bank guarantees.
• Overall, while sales show some deceleration in growth trends, figures of Masterplast remained sound. The Company expects EBITDA to come to EUR 7.3 mln which we see achievable if Q3 comes strong, this figure would be above our current estimate of EUR 6.8 mln for 2019. We will update our estimates in light of H1 earnings and T-Cell acquisition while we keep our Accumulate rating.
• Masterplast will pay a dividend of HUF 34 (div yield 4.7%), ex-date is 22 Oct.

 

 

 

Hai Thanh Le Phuong, CFA
Head of Research

CONCORDE SECURITIES LTD.

Hillside
55-61 Alkotás street, H-1123 Budapest.
Phone: | Fax: | Mobil:
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MEMBER OF THE CONCORDE GROUP

 

 

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