WOOD Flash – MMK: 2Q19 results – slightly below consensus, but large drop in FCF means 2Q19 dividend of only 1.6%
MMK released its 2Q19 financial results this morning (1 August). EBITDA rose 13% qoq (-24% yoy), to USD 497m, 4% below the Bloomberg consensus (but only 2% below our forecast). Net income was up 21% qoq (-31% yoy), to USD 271m, 12% below the consensus, moving in line with the EBITDA. However, the FCF fell 77% qoq, to USD 61m, on the back of a USD 79m working capital build-up (vs. the USD 59m release in 1Q19). MMK declared a dividend of RUB 0.69/share, 200% of the 2Q19 FCF, above its recent trend of paying out 100% of its FCF. This implies a 1.6% yield, below the c.2.5% achieved by NLMK and Severstal in 2Q19. Overall, the results should be broadly neutral for the share price, in our view. The miss at the EBITDA level was small and we do not believe that the stock should be punished for a seasonal working capital build-up.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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