This report is prepared for the Warsaw Stock Exchange SA within the framework of the Analytical Coverage Support Program 3.0
Event: 3Q22 results revealed; Adjusted EBITDA close to the preliminary figures published earlier.
The Company revealed its quarterly consolidated 3Q22 results on Wednesday late after the session.
Consolidated figures. The Company’s reported EBITDA amounted to PLN 62.0 million. This figure is impacted by one-time effects at a sum of PLN -60.9 million in addition to other operating income at a value of PLN -1.3 million. The mentioned one-time effects include (i) PLN -64.4 million of timing effects in the ON+Bio segment and (ii) PLN 3.5 million of cost transfers in the natural gas segment. Ultimately, the Company’s adjusted EBITDA (as calculated by us) after excluding these items amounted to PLN 124.2 million vs. PLN 95.0 million expected by us initially (and vs. PLN 124 million indicated in the preliminary figures previously and PLN 120.7 million of final adjusted EBITDA calculated by management for the quarter).
The difference in our adjusted EBITDA and the management adjusted EBITDA lies in other operating income and different calculation of depreciation. The Company’s reported net income amounted to PLN 41.1 million, while the adjusted net income, as calculated by us amounted to PLN 92.0 million.
Results of segment. The Company’s ON/bio segment delivered adjusted EBITDA of PLN 122.3 million vs. PLN 90.0 million expected by us initially. The Company’s LPG segment recorded adjusted EBITDA of PLN 16.4 million vs. PLN 15.0 million expected by us. The natural gas segment’s adjusted EBITDA amounted to PLN 1.5 million vs. PLN 0.0 million expected by us. The electric energy segment delivered an adjusted EBITDA of PLN 5.4 million vs. PLN -3.0 million expected by us. The results of the photovoltaic segment with adjusted EBITDA at PLN -1.7 million (vs. PLN -1.0 million expected by us).
The Company mentioned that the quarterly results had been particularly impacted by the war in Ukraine, and by the resultant instability of energy markets caused by introduction of sanctions on Belarus and Russia. The Company also mentions very high sale volumes generated on diesel, petrol and LPG products and logistical constraints that limited the utilization of market opportunities. Furthermore, The Company generated PLN 23 million on the sale of obligatory reserves (vs. PLN 25 million expected by us and vs. PLN 30 million declared by the Company to be generated in 2H22).
Cash flow. The Company’s 3Q22 operating cash flow amounted to PLN 49 million vs. PLN -81 million recognised a year ago. The cumulative operating cash flow for 1-3Q22 amounts to as much as PLN 182 million (vs. PLN -146 million delivered a year ago). The strong drop in inventories has been confirmed in the quarter (a drop in inventories of PLN -153 million this year). The operating cash flow is negatively affected by a significant increase in trade receivables (of PLN -449 million recognised this year) – a figure which is likely to partly reverse in the next quarters, in our view.
Net debt. The Company’s net debt at the end of the quarter amounted to PLN 228 million vs. PLN 337 million recognised a year ago. We were hoping for a greater decrease in net debt in the quarter. There are chances for a drop in trade receivables and a significant drop in net debt in the next quarters.
Analyst: Åukasz Prokopiuk, CFA
GPW’s Analytical Coverage Support Programme 3.0
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