Mo-Bruk - It’s All Good News In the Month of May
Mo-BRUK’s 2020 fourth-quarter results came 10% ahead of expectations across all key metrics, and with year-end net cash of PLN 14 per share there is reason to be optimistic about the next dividend payout. When it comes to the current situation in waste management, FY2021 prospects are upbeat with increased demand for treatment capacity allowing Mo-BRUK to raise its gate fees by 18% compared to the same period a year earlier in the first quarter. As a result, we see potential for the quarterly EBITDA to register a boost as big as 80% (Mo-BRUK is slated to release 2021 Q1 results on 13 May 2021). Based on the brighter outlook, given the substantial cash pile, we raise our prediction as to Mo-BRUK’s 2021 dividend from PLN 17 to PLN 20 a share, and we also adjust slightly higher our FY2021-2023 earnings expectations to account for the hiked rates on waste treatment services. On the downside, we have had to cut back expectations for waste stabilization volumes as environmental permits are taking longer than expected, and we have also reduced the expected average sales prices for refuse-derived fuel (RDF) due to pressure being exerted by buyers. We look forward to Mo-BRUK’s May 13th first-quarter results, and to the dividend announcement, and in the mean time, after big gains recently, we downgrade MBR from accumulate to hold, with the target price raised from PLN 426.72 to PLN 429.25 per share.
Mo-Bruk SA is a Poland-based company involved in the production of concrete. It is also active in the area of hazardous and other than hazardous industrial waste management. Additionally, the Company operates a waste recovery plant, waste recycling plant, alternative fuel production plant and an industrial waste landfill. The Company produces alternative fuels from municipal and industrial wastes. The Company is also the owner of two open non-stop petrol stations for liquefied fuel, as well as a technical inspection station. Mo-Bruk SA is also engaged in the construction of concrete surfaces. As of December 31, 2011, the Company operated one wholly owned subsidiary, Raf-Ekologia Sp. z o.o.
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