WOOD Flash – MMK: 4Q19 results – better-than-expected FCF and dividends
MMK released its 4Q19 financial results this morning (5 February). EBITDA fell 36% qoq (-38% yoy), to USD 335m, in line with the consensus. Net income was down 67% qoq (-64% yoy), at USD 88m, 41% below the consensus, due to an impairment and slightly higher than expected tax. The FCF dropped only 6% qoq, to USD 272m, due to falling EBITDA, offset by a USD 256m release in working capital vs. the USD 51m release of working capital in 3Q19. This was 82% above our forecast and 63% above the consensus, so we see it as a positive, albeit one driven by a working capital release. As a result, MMK declared a dividend of RUB 1.507/share, 100% of the 4Q19 FCF, which beat our estimate by 76%, following the higher FCF. This implies a 3.3% yield on the GDR, vs. the c.2.9% achieved by Severstal in 3Q19 on the day of its results. Overall, the results should be slightly positive for the share price, in our view.
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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