About Inter Cars we wrote lately at the beginning of June, analysing the results for the first quarter. They were not bad: there was a substantial growth in revenues, which was resulting in increase of profit, which was big enough to be able to say that profitability of the company was improved.
We can say the same abut the results for half-year. As we can see, the consolidated sales revenues for the period between January till the end of June 2014 amounted to PLN 1.85bn, that is an increase of 14% in comparison to a year ago. The company managed to work out a net profit of PLN 85.7m (4.62% margin), whilst in the first six months of 2013 it had been just PLN 61.55m (3.78%). Operating profitability went up from 5.31% to 5.98%, and the whole situation is presented in below chart.
We can see on the share price of Inter Cars a trial of getting back to high levels - after some months of reduction in share price which was ended on testing a bottom line of PLN 160. The recovery took the price back to around PLN 180 and this is an open way for getting to PLN 191.50. Another strong pivot points are PLN 200 and PLN 206.
Getting back to financial analysis, we can say that revenues and profit are not all as we should also be interested by balance and cash flow statements. We can say that cash flow from operating activities in the first half year were in plus, similarly to those on financial activity - in minus were the cash flows on investment activity. In total the change in balance of cash was in plus (PLN 5.63m). A year ago it was PLN 36.78m.
Financial statement positions and ratios based on them can be seen below:
The assets are dominated by current assets, clearly higher than current liabilities, thanks to this the current ratio was at the level of around 1.59 points. Debt to equity ratio is not exceptionally high, also the golden rule of balance sheet is kept. Coverage of current liabilities with cash is at quite a low level (lately 6%), but this may be caused by the specific of business activities. The company is a trading firm, distributing a wide variety of goods (and large number) for passenger cars, commercial vehicles and trucks.
Inter Cars is a capital group (we have analysed its results, i.e. consolidated results), which has its subsidiaries not only in Poland, but also in Hungary, Croatia, the Czech Republic and Republic of Slovenia. The newest report showed us that sales increase realized by foreign subsidiaries is much higher than export sales performed by the parent entity. In total the domestic market brought 67& of consolidated revenues. This means that Polish market is basic, but not strong enough to disregard other countries.
EBIT and NET profit went up much, whilst margin on sale of goods itself stayed at the level of 31.5%, recorded also a year ago.
The Board declared that "the Company has been consistently expanding its business in Central and Eastern Europe." "This market displays a large potential of growth and a net profitability higher than the domestic market." Latvia (an increase of 143%) and Hungary (an increase of 100%) recorded the biggest growth. Of course Inter Cars Ukraine had negative influence on the results of the group because of political crisis and weaker hryvnya. By now Inter Cars is not planning further expansion to our Eastern neighbours, awaiting the outcome of political conflict.
Adam Witczak
source: www.finweb.pl
29-08-2014
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