Warsaw Stock Exchange: ELEKTROTIM Q4’22 RESULTS
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Last recommendation BDM: ACCUMULATE with target price 8,17 PLN/share (2022/12/09) LINK
Q4’22 results [PLN m]
- Revenues in Q4'22 amounted to PLN 233.7m (+158% y/y), in line with our expectations.
- On a standalone basis, the Installations segment (which includes the Belarusian border contract) generated PLN 157m in revenue (vs. PLN 74m in Q3'22). Our forecast assumed PLN 160m revenue from the border contract in Q4'22, but we estimate this must have been a few dozen million less (the company said the contract accounted for 44% of revenues of the parent company in 2022, or ca. PLN 188m, and we estimated Q1-3'22 throughput at ca. PLN 85m).
- Gross margin on sales (17.3%) significantly higher y/y and above our assumptions.
- SG&A costs 65% y/y higher. (including management costs ca. 100% higher y/y, impacted by performance bonuses and management changes).
- Negative impact of the other operating activities in Q4'22 (PLN -5.4m) - mainly due to recognition of anticipated contract losses
- EBITDA in Q3'22 amounted to PLN 26.6m (vs. PLN 4.4m a year ago). A result better than our assumptions (we expected PLN 19.6m).
- Financial activities with a slightly negative impact of PLN -0.7m. Before pre-tax profit, the company also recognized an additional PLN -2.6m loss on loss of control (sale of shares in Procom).
- Q4'22 net profit at PLN 15.6m (effective tax rate at 26%), in line with our forecasts.
- Cash flows from operations activities amounted to PLN +17.6m in Q4'22. Prepayments at PLN 42.8m (up vs Q3'22).
- At the end of the period, the company had PLN 51m in net cash.
- Backlog: PLN 558m (vs. PLN 524m after Q3'22).
- Standalone net profit for 2022 was PLN 23.1m. With a dividend policy of paying out 50-75% of net profit, this translates into a forecast DPS in the range of PLN 1.16-1.73.
- The company is "expecting another very good year" in 2023. Management expects the company and the group to achieve "outperformance in the years prior to 2022".
- The company is also continuing the process of reviewing strategic options ("Zeus is expected to be the next object of sale").
BDM Comment: The company's Q4'22 results on revenue and net profit were in line with our forecasts. Gross margin was clearly above our expectations, but results at the lower levels were burdened by various events, some of which can be considered one-offs. At the end of the year, the company recorded a very good cash position, with this also due to prepayments. The contract on the barrier on the border with Belarus will still affect results at least until Q2'23, while the company also has a significant portfolio in other areas (we note, among other things, the growth in the rail division). Management is positive about the outlook for 2023. The sale of shares in the subsidiary Zeus is also announced.
Results in previous quarters [PLN m]
Sales [PLN m]
Gross margin
EBITDA [PLN m]
EBITDA adj. [PLN m]
Analyst: Krzysztof Pado
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