LHV Institutional Baltic Insight, February 13th, 2020
* Novaturas (NTU1L LH) reported stronger Q4 2019 results relative to our expectations. We had already been aware of the annual decline in Q4 2019 revenues based on the monthly turnover and passenger carriage announcements. However, while we had anticipated an improvement (y-o-y) in the profitability for Q4 2019, the reported profits were even stronger than our expectations. We forecasted a net profit of EUR 0.7m, but the company reported a net profit of EUR 1.0m (Q4 2018: loss of EUR 0.2m).* The company mentioned that the fourth quarter performance signals towards the company’s return on the path of sustainable growth. The full-year results for 2019 are weaker on a y-o-y basis, primarily due to below-par performance in the first three quarters of 2019.
* The management board has stated that it expects to propose the distribution of 70-80% of its net profit as dividends. That would imply the total dividend distribution of c.a. EUR 1.6-1.9m or EUR 0.21-0.24 per share (dividend yield: 4.7-5.4%). Our fair value range for the company is EUR 7.05-7.75 (closing price as of 12 February: EUR 4.44). Please also refer to the tables in the attachment.
Novaturas AB is a Lithuania-based company, which is engaged in the provision of travel services in the Baltic countries. The Company operates through three divisions: All Inclusive vacation packages around all time year; Sightseeing tour by coach and plane to approximately 30 destinations across the world, as well as ski trips. It also offers airline tickets and hotel accommodations. It sells tours through travel agencies and its Website.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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