Biofarm - top line mainly in line with estimates, bottom line hurt by higher third parties expenses (negative)
Biofarm reported its 4Q 2012 results under IFRS, while until now reports were only issued under RAS. While turnover for the quarter increased by 6% yoy to RON 28 mn (3% lower compared to our forecast), we are disappointed by the operational performance. Third parties expenses, mostly marketing costs, rose by 39% yoy to RON 13 mn, (+34% compared to our estimate) partially explained by the intense TV campaigns. Thus, EBIT was seriously hurt and BIO reported its first time quarterly operational loss in the last five years at RON 1.7 mn, while we were expecting an operational profit. The revaluation of the shares portfolio (RON 3 mn gains vs. losses of RON 1.6 mn during 4Q 11) boosted the financial result (RON 4 mn +6x yoy and similar to our estimates). Thus, BIO reported a net profit of RON 3.7 mn, up 5x yoy given the special financial gains and also given a lower effective tax rate. Adjusted for the stock portfolio revaluation, bottom line decreased by 70% yoy to RON 0.6 mn, still positive due to interest revenues.
Over 2012, sales advanced by 12% yoy to RON 105 mn, 1% below our estimates, while net profit advanced by 45% yoy to RON 21 mn, 6% below our forecast.
The company recorded an upward adjustment of the share capital due to the convergence to IFRS. This was reflected in the balance sheet as a downward adjustment in the reported result which stands at RON 12.9 mn including 2012 profit. This result usually represents the maximum amount that the company may distribute as dividends. Thus, if dividends are paid from the IFRS result, the maximum amount available to be distributed (RON 13 mn) reflects a pay-out ratio of 61% of 2012 preliminary profit. This translates into a DPS of RON 0.011, up 10% yoy, while dividend yield, taking into consideration the latest closing price, is approx. 5%.
Given the lower than expected net profit and the IFRS convergence impact on dividends to be paid, we rate the results as negative and put under review our current "buy" recommendation and TP of RON 0.24. We will slightly revise downwards our estimates and given the rally of the stock price in the last period we will probably downgrade our recommendation.
SIF Banat Crisana intends to buy the asset manager of SIF Muntenia
Trough a release to the stock exchange, it was announced that SIF Banat Crisana (SIF1) intends to buy the asset manager of SIF Muntenia (SIF4) from its shareholders, mainly former and current employees of the latter. The negotiations between the two parties have been started. We remind that the current asset manager of SIF4 has been challenged by a group of shareholders which were trying to appoint the Board of Nominees. While in the short term this piece of news could be positive for SIF4 shares, we view it as negative if the transaction receives the regulatory approval. We remind that at SIF1 there has been a “behind the scene “change of management, with former management reaching a truce with the current one.
Sicomed reported a net loss for 4Q 2012, though lower yoy
Pharmaceutical producer Sicomed (SCD) reported a 13% yoy drop in its turnover to RON 46 mn. Raw material costs rose by 39% yoy to RON 17 mn, while labor costs increased by 19% yoy to RON 12.5 mn and third parties expenses augmented by 26% yoy to RON 20 mn. Other operational expenses dropped by 68% yoy to RON 5 mn. SCD also registered some gains from the revaluation of invetories worth RON 1.5 mn vs. a loss of RON 1 mn during 4Q 11. However, EBIT remained in red at RON 2 mn vs. an operational loss of RON 9 mn during 4Q 11. Financial gains almost halved at RON 0.7 mn, thus bottom line showed a net loss of RON 2.2 mn vs. a net loss of RON 8 mn during 4Q 11. Over 2012, sales advanced by 5% yoy to RON 248 mn, while net profit shrunk by 22% yoy to RON 30 mn.
We expect the majority shareholder, Sanofi-Aventis to request a payout ratio close to 100%, thus DPS should stand close to RON 0.069. Taking into consideration the latest closing price, the dividend yield stands close to 8%.
Fondul Proprietatea – CE Oltenia estimates sales of RON 4.1 bn and a net profit of RON 100 mn for 2013
According to media, the power generator CE Oltenia is estimating for 2013 sales of RON 4.1 bn and a net profit RON 100 mn. The tiny net profit is due to higher expenses with C02 certificates, as starting this year the company will not receive any free of charge CO2 allocations. Power production is seen at 18.5 TWh, out of which 26% is to be sold on regulated market. In 2012 the company produced 10 TWh, during the seven months since its establishing, with sales of RON 2.3 bn and a net profit of RON 242 mn. We view this piece of news as neutral for Fondul Proprietatea who is a minority shareholder, since the drop in profitability for CE Oltenia was expected.
Bermas - 4Q 12 sales up slightly but flat net result
Domestic beer producer Bermas (BRM) has reported a 6% yoy increase in its sales for 4Q 12 to RON 2.6 mn. Raw materials expenses jumped 7% yoy while labour ones increased 5% yoy. Operating result for the quarter was a loss of RON 0.89 mn, comparable with the result from a year ago of RON 0.87 mn. Net result was a loss of RON 0.83 mn, similar with a loss of RON 0.81 reported in 4Q 11. FY 2012 sales amounted to RON 23.9 mn, up 3% yoy while net profit stood at RON 1.6 mn, down 18% yoy.
Cemacon continues to report weak results
The building materials producer Cemacon (CEON) has reported some key figures for 4Q 12, still under RAS. Thus, turnover increased by 29% yoy to RON 7.3 mn. Operational losses deepened to RON 6 mn from approx. RON 3 mn during 4Q 11, but we can not asses the source of the loss given that the cost structure was not made public. Although CEON is highly indebted, RON appreciation during 4Q 12 allowed the company to book some gains from the revaluation of its Fx debt and thus CEON reported financial gains of RON 0.9 mn vs. financial losses of RON 1.5 mn during 4Q 11. However, net loss stood at RON 5.2 mn from a loss of RON 4.2 mn in the same period last year. Over 2012, sales advanced by 26% yoy to RON 35 mn, while volumes increased by 11% yoy. Bottom line remained in red and deepened to RON 11 mn from RON 7 mn during 2011, negatively impacted by the interest paid.
Broker Cluj swings to a loss in 4Q 12
The broker and investment house Broker Cluj (BRK) has reported sales of RON 0.92 mn for 4Q 12 (mainly brokerage fees), down 24% yoy. With third party expenses jumping 14% yoy to RON 1.8 mn, BRK’s EBIT for the quarter was a loss of RON 1.1 mn compared to a loss of RON 5.8 mn one year ago (when company booked large provisions for its investment portfolio). Financial result was a loss of RON 3.2 mn, lower than the corresponding result from a year ago. All in all, net result for the quarter was a loss of RON 4.4 mn, contracting from a loss of RON 15.6 mn in 4Q 11. For the whole year 2012, BRK reported a net profit of RON 0.8 mn.
Condmag – losses widened in 4Q 2012
Industrial contractor Condmag (COMI) reported its 2012 IFRS unaudited results. These are thus not fully comparable with the quarterly results reported so far under Romanian Accounting Standards. Revenues stood at RON 93 mn down 19% yoy. The main cost items (salaries, materials, third parties) went down but not enough to compensate the drop in sales plus the company recorded provisions worth RON 4.3 mn which brought an operating loss of RON 24.4 mn, from an operating loss below RON 1.8 mn 2011. The net loss stood at RON 22.4 mn, from a loss of RON 1 mn in 2011.
We do not believe the results will come as a major surprise after the RON 11.4 mn loss reported for 1-3Q 2012 under RAS.
