WOOD Flash – Prime Car Management: 3Q16 – 4% beat on net income; financial margin below expectations
PCM has posted net profit of PLN 9.3m (flat qoq, +3% yoy) for 3Q16, 4% above our expectations. The beat vs. our estimates came from: i) a higher mechanical services margin than we expected; ii) a lower negative contribution from the depreciation margin than we anticipated; and iii) lower G&A expenses. On the other hand, the financial margin came in below our estimates and expanded by only 1% qoq.Overall, we read the results as neutral at best due to the poor quality of the beat. We are concerned with the weak financial margin, and with the fleet expansion, which is slowing down. On the other hand, in management’s view, we could see an increase in the margin in 4Q16E. Furthermore, in 3Q16, the D/E ratio reached 2.47x and is close to the covenant of 2.5x, enabling the company to determine a dividend payout without prior approval from the banks.
Year-to-date, PCM has delivered 79% of our full-year forecast, but 71% of management’s motivational programme.
Prime Car Management Sa. Prime Car Management SA is a Poland-based company engaged in the passenger transportation industry. The Company operates on the car fleet management market. It specializes in leasing and car fleet management (CFM) services. The Company offers a full range of leasing products and CFM services, including full service leasing (FSL) and semi-FSL, fleet management and leasing (financial or operational). Prime Car Management SA is the parent company of a capital group, operating under the Masterlease brand. Masterlease Group's fleet, including leasing and CFM services, consists of over 23 000 vehicles. The Company operates in Poland through a countrywide sales network, including the headquarters in Gdansk and 16 branches.
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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