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LOGISTA: 1H’20 RESULTS (ANÁLISIS BANCO SABADELL)

2Q'20 vs. 2Q'19 Results:
Sales: € 274.5 M (-4.2% vs. +1.9% BS(e));
EBIT: € 50.7 M (-23.8% vs. -19.8% BS(e));
Net Profit: € 28.7 M (-25.8% vs. +4.8% BS(e));
1H'20 vs. 1H'19 Results:
Sales: € 566.9 M (-0.1% vs. +3.0% BS(e));
EBIT: € 112.1 M (-11.1% vs. -9.0% BS(e));
Net Profit: € 65.9 M (-11.8% vs. +4.1% BS(e));

Although Q2 results appear to be weak, with revenues and operating profit falling, but we must bear in mind that these numbers are affected by inventory revaluations that had a very positive impact on the comparable base (2Q’19 saw € +5 M from this concept); however, this year they have had the opposite effect (€ -6.2 M). Thus, the impact from inventory revaluation, which we downplay, is € -11 M. Additionally, Covid-19 has had an impact on both revenues (in non-essential businesses and international transport) and costs, due to the rise in absenteeism and the more complex operating environment linked to public health safety measures. According to LOG, the impact from Covid-19 on EBIT was between € -5 M and € -6 M. Thus, the company estimates that EBIT adjusted for these two effects (inventory revaluation and Covid-19) would have grown more than +2% (in line with forecasts) vs. a reported drop of -11%.
By markets, Spain and Italy have performed better than France, which is where the biggest impact was seen from inventories and a drop in the distribution business (in channels apart from tobacco shops, which have been hit hard by Covid-19). In Italy there was a positive impact from new traceability service tariffs.
Net Profit fell -12% due to the aforementioned effects, the lack of capital gains in 2020 (vs. € +2.5 M in 2019 after the sale of a real estate asset in Portugal) and an increase in the tax rate (which went from 24.7% to 27.3% after the tax benefits the company enjoyed expired). All these negative impacts were partially offset with lower restructuring costs in 2020.
As for the 2020 guidance, the company considers that given the current market environment, the 2020 guidance might not be met (note that it suggested mid-single digit growth in adjusted EBIT and Net Profit, in line with our estimates). The company believes that quantifying new estimates is impossible at this moment, although due to the resilience of the business model to adverse situations it does not expect a significant reduction in results vs. 2019. Since the beginning of the crisis (19 February), the share price has shed -18% (+14% vs. IBEX 35). BUY, T.P. € 25.55/sh. (+59.09% upside).