Analysis Of The Results For The 3Q 2022 - Protektor SA – WSE:PRT
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This report was prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0.
Key facts from published results:
â–ª We consider the published results for Q3 2022 as acceptable, but still far from those assumed in the strategy. The company recorded a decrease in sales revenue by 4.5% y/y and 3.5% q/q. Despite the continuing increase in costs (raw materials, energy), compared to Q2 2022, there was a visible increase in the gross margin on sales (from 32.8% to 36.7%), which we assess positively.
â–ª Results at other levels with a strong impact of a decrease in general and administrative expenses (7% q/q).
â–ª Operating profit was over PLN 1.08 million higher compared to Q2 22 and almost twice as high as compared to Q3 21
â–ª The net profit was mainly affected by the increase in financial costs (PLN 0.34 million in Q2 22 to PLN 1.47 million in Q3 22). The loss in Q3 22 amounted to PLN 0.57 million vs. PLN 0.7 million in Q2 22 and PLN 0.41 in Q3 21.
We describe the financial situation of Protektor as stable, but the results achieved in Q3 are far from the assumptions of the strategy. We do not believe that the proposed new issue of shares is necessary for the Protektor (the so-called rescue issue), but we share the Management Board's concerns regarding the various possibilities of the war in Ukraine. We consider the efforts to transfer production from the second factory in Transnistria (Rida) to Poland to be right, and the issue was intended to serve this purpose. In our opinion, the results of Q3 do not give grounds for making another downward revision of the forecasts, so we leave the valuation unchanged at PLN 2.9.
Expected impact: We consider the results for Q3 as quite good and meeting our expectations. Sales revenues decreased by PLN 1.2 million (4.5%) on an annual basis, and by PLN 882 thousand compared to Q2. PLN (3.5%). Taking into account the increase in production from 144 thousand. pairs of shoes in Q2 2022 to 174,000 pairs in Q3 2022 (+21%) and a decrease in sales from 169,000 up to 149 thousand par in Q3 2022 (-12%), it can be concluded that revenues are resistant to the observable increase in prices. Both in terms of quantity (sales of 165,000 pairs in Q3 2021) and value, these results are similar to last year's, so for now it is not visible that the new collections will contribute to the assumed increase in sales and improvement of margins. Revenues increased the most on the Romanian market (+73.7%), Switzerland (+29.2%) and Hungary (+28.2%), and fell the most on the Austrian market (-9.2%). On the most important German market for the Group, accounting for almost half of sales, revenues increased by 1%. This is not a bad result, taking into account the fact that the German economy sends the most signals of the forecasted slowdown. Finally, the Group's operating profit was higher by 76.4% compared to Q3 2021 and the net loss amounted to PLN 571 thousand. PLN against PLN 414 thousand PLN in the corresponding period of the previous year and PLN 695 thousand. PLN in Q2 2022. Summing up, we maintain our valuation, still seeing the potential to improve the results and increase the Company's valuation.
Analyst: Artur Wizner Tel.: +48 (22) 53 95 548
GPW’s Analytical Coverage Support Programme 3.0
