ZE PAK's Q3'23 EBITDA Outcomes: Strong Performance Driven by Mining and One-off Gains
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Q3'23 EBITDA Outcomes: Neutral Performance and Segment Dynamics Overview
ZE PAK reported 3Q23 results with the following highlights:
■ Reported EBITDA amounted to PLN 425mn (vs. PLN 174mn expected by market consensus, vs. PLN 190 expected by us). We identified one key major one-off of PLN 81.7mn profits from sales of non-financial fixed assets. Adjusting by this amount the EBITDA would come at PLN 343mn. We highlight that company’s results was also strongly supported by LTC revenues of PLN 39mn (vs. PLN 26mn year ago, vs. PLN 88.6mn in 9M23). The outperformance of our estimates is primarily due to solid result in mining where company reported EBITDA 190mn (vs. PLN 106mn assumed in our estimates).
■ In generation segment reported EBITDA amounted to PLN 135mn (vs. PLN 188mn year ago, vs. PLN 81mn expected us).
■ In mining reported EBITDA amounted to PLN 190mn (vs. PLN 28mn year ago). Improvement is due to very solid prices (revenues of mining segment divided by lignite consumption) of lignite which in 3Q23 amounted to PLN 662/t (vs. PLN 158/t) as a result EBITDA margin in this segment reached 69% (20% year ago)
■ Net income amounted to PLN 368mn (vs. PLN 129mn year ago). We highlight that net income was supported by FX of PLN 16mn
■ Net debt/(cash) amounted to PLN -1189mn
Our view: POSITIVE
We identified one major key one-off item at the EBITDA level related to the sales of non-financial fixed assets in the amount of PLN 81.7mn. Adjusting by this amount the EBITDA would come at PLN 343mn strongly above market consensus and our expectations which makes us to see these results strongly to the positive side.
The outperformance is primarily related to the very solid result of mining segment which is due to very solid prices of lignite (revenues of mining segment divided by lignite consumption) which amounted to PLN 661/t in 3Q23 (vs. PLN 158/t in 3Q22) and relatively low OPEX of PLN 87mn (vs. PLN 111mn year ago) After 9M23, we are especially surprised by very solid result of mining segment where the prices of lignite in 9M23 (revenues of mining segment divided by lignite consumption) amounted to PLN 557/t (vs. PLN 153/t in 9M22).
We highlight that company’s cash position is very strong with net cash of PLN 1.2bn, however, we underline that company will have to pay PLN 460mn in advance for CCTG Adamów unit and have reclamation provision of PLN 807mn that will have to be cover in coming years.
