WOOD Flash – NLMK: 1Q20 results – better-than-expected FCF and dividend
NLMK published its 1Q20 financial results this morning (30 April), with EBITDA of USD 594m, in line with our estimate, but 5% ahead of the consensus and up 24% qoq. FCF of USD 331m was down only 2% qoq and 61% above our estimate, due to a USD 85m working capital release (we expected a build qoq). On the dividend, the company announced RUB 3.21/share, up marginally from the 4Q19 dividend of RUB 3.12/share, c.20% above our forecast due to the much higher FCF. The payout is, however, only 75% of the FCF, lower than implied by the dividend policy, so NLMK remains more cautious than usual, due to the uncertainty around COVID-19. However, this is still a 2.3% yield and the results were better than expected, so they should be positive for the share price, in our view. In addition, NLMK has provided a new capex guidance range of USD 0.9-0.95bn, from the previously announced USD 1.1-1.2bn at the start of the year, although the company had already announced that plans to cut it, without providing the range. This new range is broadly in line with our expectations and the official forecast.
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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