Valamar Riviera 3Q 20 - Expectations missed on all P&L lines

3Q 20 wrap-up: It seems that we were overly optimistic regarding the companys business results for the main season and the start of the autumn shoulder season. Valamars consolidated sales revenue, in the amount of HRK 525 mn, missed RCBe by a double-digit number. The rationale is a higher than expected yoy decline of ADR combined with lower than anticipated number of accommodation units sold. The summer tourism season in Croatia started above our expectations, but renewed travel restrictions, issued by several European countries, during August resulted in a significant drop in arrivals in late August and the shoulder season. Although local peers also reported strong double-digit revenue declines yoy, Valamar failed to position itself on the top of the list of the most resilient Croatian hospitality companies. Further down the P&L, there were no negative surprises as we have anticipated a strong focus on cost cutting measures. Thus, the main rationale behind lower than expected reported EBITDA and EBIT is significantly lower than anticipated sales revenue. The company reported earnings figures in the black, but the bottom line nosedived compared to the same period of FY 19 (-83%).