2Q’2023/24 Financial Results: Margins Improve Despite Lower Revenues
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The Company released its 2Q’2023/24 results with the following data:
â– Revenues amounted to PLN 148.7mn (-11% y/y, -2 % q/q).
â– Gross profit amounted to PLN 37.9mn (-8% y/y, -2% q/q).
â– EBITDA amounted PLN 21.2mn (-6% y/y, +4% q/q).
â– EBIT amounted to PLN 16.8mn (-7% y/y, +8% q/q).
â– Net profit amounted to 18.3mn (+80% y/y, +56% q/q).
â– Operating cash flow amounted to 26.5mn (+72% y/y, +694% q/q).
â– The Company’s net debt at the end of 2Q’2023/24 amounted to PLN 80mn (vs. PLN
68mn at the end of 1Q’2023/24)
Our view:
NEUTRAL In our opinion, 2Q’2023/24 results are neutral. Although revenue was lower than our and market’s expectations, we see an improvement in margins both in terms of y/y and q/q. In 2Q’2023/24, EBITDA margin amounted to 14.3% (+0.8 p.p. y/y and q/q) vs. our expectations of 11.8%. SG&A costs are under the Company’s control. The Company recorded an one-off interest income of PLN 5.1mn stemming from a favorable court sentence pertaining to tax for FY 2012/13. The Company also received a refund of overpaid tax of ca. PLN 1.5mn associated with the abovementioned court sentence. When adjusted by that one-off items, net profit would amount to PLN 11.6mn (+15% y/y, -1% q/q), and net profit margin would amount to 7.8%, which is a profitability comparable to the preceding quarter. Operating cash flow was good and amounted to PLN 26.5mn (+72% y/y). The Company also incurred higher CAPEX of PLN 11.7mn (vs. PLN 8.6mn in whole FY 2022/23). Net debt within the 2Q’2023/24 increased from PLN 68mn to PLN 80mn, but the Company paid dividend of PLN 23.4mn. To summarize, we consider the abovementioned results neutral. The risk of not delivering our 2023/24 EBITDA forecast of PLN 76.8mn is low, in 1H’2023/24 the Company’s EBITDA amounted to PLN 41.7mn (54.3% of our forecast for FY 2023/24)
