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SEE Markets Closed Mixed




Hypo Alpe-Adria-Bank


24 May 2013





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The largest maker of home appliances in Slovenia, Gorenje posted pre-tax loss of EUR1m in 1Q13 (vs EUR5.3m pre-tax profit in 1Q12). The overall topline came in at EUR289m (-1.4% yoy) while segment analysis shows that decline was driven by subdued performance of Ecology (-13.4% yoy) and Portfolio Investments (-5.9% yoy). Meanwhile, the most important segment Home grew 0.5% yoy thanks to increased sales volume in Eastern Europe. On profits, Gorenje’s EBIT halved hurt by 61% yoy decline in other operating income, mostly on higher 1Q12 base given the last year’s positive one-offs from provision reversal in Sweden and received subsidies in Serbia. Furthermore, cost of services grew 2,9% yoy as a result of changed transport routes given production facilities movement, while COGS stayed virtually the same. Consequently, operating margin halved to 2% while EBITDA margin settled at 5.6% (vs 8.1% in 1Q12). The bottom line was further affected by 5.9% yoy increase in net financial loss that amounted to EUR6.7m due to lower FX gains. A look at balance sheet reveals deterioration in leverage position as net debt grew by 19% ytd due to unfavorable FCF movement, as well as less favorable maturity structure (the share of long-term financial liabilities fell to 57.2% in total fin. liabilities). Net debt/EBITDA increased to 5.3x from 4.9x in 1Q12. The restructuring of manufacturing operations that started last year will continue throughout 2013. After the launch of new plant in Serbia and sale of unprofitable furniture manufacturing segment in February, next on the agenda is movement of dishwasher production from Sweden to Slovenia in 2H13. The latter will put significant pressure on company’s performance. It is estimated that overall restructuring processes will result in EUR15m-worth annual savings while full positive effect should be manifested in 2014. The leading Slovenian insurance company Triglav Group delivered 29.9% yoy higher net profit of EUR22.9m through 1Q13. Better bottom line primarily was result of lower expenses from financial assets and liabilities (impairments and losses) by 70% yoy. Namely, through impairment of financial assets in 2012 Triglav Group managed to effectively adjust the value of its portfolio, which had a favourable influence on its performance in 1Q13. Company managed to charge EUR258.7m in gross insurance and co-insurance premium in 1Q13 which is 5% yoy lower, impacted primarily by new corporate bankruptcies, reduced purchasing power of households in region and higher unemployment. Namely, collected gross premium in non-life and life decreased both by 8% and 7% yoy, respectively. Nevertheless, health insurance premium growth of 20% yoy softened the fall of total gross premium. On a more negative note, gross claims paid amounted EUR157.3m, which is 4% yoy higher. Consequently, Group’s combined ratio worsened from 84.9% in 1Q12 to 90.3% in 1Q13. As at 31 Mar 2013, the total assets of the Triglav Group stood at EUR 3.2bn, which is 2% higher than at the 2012 year end.

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