Warsaw Stock Exchange – Selena FM (WSE:SEL) – Q222 Results
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ANALYST COMMENT – SELENA FM Q2’22 RESULTS
Last recommendation BDM: BUY with target price 30,0 PLN/share (2022/06/27) LINK
- Revenues in Q2'22 amounted to PLN 499.2m (+14% y/y), slightly above our expectations. A record quarter in the company's history.
- Weak revenues growth in Poland (+3%), strong in other EU markets (+19% y/y). Very good performance in North and South America (+61% y/y). Sales growth also in the Eastern Europe and Asia segment (+12%), despite large exposure to Russia.
- Subsidiaries based in Eastern Europe realised revenues of PLN 115.3m in H1'22 (PLN 114.5m a year ago). As at the balance sheet date, inventories located in Eastern Europe was PLN 49m and receivables from customers of non-related companies from the region was PLN 37m.
- Gross margin (28.3%) at similar y/y level, but weaker than in Q1'22 (32.1%) and below our assumptions. The ratio of SG&A costs to revenues increased slightly y/y.
- The impact of the other operating activities not significant in Q2'22 (PLN +0.2m).
- EBITDA amounted to PLN 38.8m in Q2'22 (vs. PLN 39.5m a year ago). Slightly weaker than we had anticipated (we expected PLN 39.8m).
- EBITDA by segment: EU (PLN 39.4m vs. PLN 58.1m a year ago), Eastern Europe and Asia (PLN 30.2m vs. PLN 18.0m), North and South America (PLN 7.5m vs. PLN 3.4m). Nonallocated results PLN -38.3m (PLN -40.0m in Q2'21).
- Financial activities with a positive impact of PLN +3.1m (clearly positive impact of foreign exchange differences, not assumed in our forecasts).
- Q2'22 net profit at PLN 23.4m (better y/y and above our assumptions). • Cash flows from operating activities amounted to PLN -31.9m in Q2'22. At the end of the period, the company had net debt of PLN 257m (PLN 199m after adjusting for loans extended to related parties).
- CAPEX in H1'22: PLN 15m.
BDM Comment: Neutral. The company's Q2'22 results are marginally below our expectations on EBITDA, while net income was supported by positive foreign exchange. We note the strong performance in the Eastern Europe and Asia segment (both revenues and EBITDA), despite exposure to Russia, Turkey and China. The strong positive trend is maintained by the North and South America area. Good sales in Q2'22 in the rest of the EU, while the Polish market looks weak with only 3% sales growth, which, with significant inflation in the construction chemicals category (+21% y/y according to PSB), implies a clear decline in volumes. Also notable is the significant decline in EBITDA profitability in the EU segment. Net debt at the highest level in the company's history (PLN 257m, of which PLN 58m finances loans to entities related to the main shareholder). Net debt/EBITDA still at safe level of 1.8x
Analyst: Krzysztof Pado krzysztof.pado@bdm.pl tel.: (+48) 512 338 250
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