The lead acid batteries producer Monbat booked best 9M earnings in seven years. Preliminary earnings announcement by the company reveal 9M16 EBITDA up 8.7% y/y to BGN 33m and earnings before taxes up 7.6% to BGN 21.6m.
9M16 sales reverse the negative trend and are up 1.4% y/y to BGN 179.4m. All data the best in seven years. On a quarterly basis, sales are up 37.8% y/y to BGN 66.9m while EBITDA is up 35.2% to BGN 12m.
The top line inflection point in Q3’16 is due to rising volume sales as well as advancing LME prices in line with the company’s sales seasonality. So far average LME price per ton in Euro is flat to FY2015 average quotes. However, the curve is moving the opposite way from what happened last year – lower LME prices in the lower Monbat season, and higher LME prices in the higher lead acid batteries season.
Record dividend made financial investors happy
With financial investors on board for a 6th consecutive year, Monbat declared record dividend – BGN 10.9m or BGN 0.28 gross DPS, yielding 3.9% at current quotes. Nevertheless, the stock trades at YTD lows as it has been under pressure partially from MSCI’s review of Bulgaria in its frontier index. However, local demand improved with pension funds adding positions in the stock, including from majority owner Prista Oil Holding.
Expected boost of liquidity for Monbat stock
New ETF on SOFIX to add demand and liquidity on the stock as Monbat is a key component of SOFIX.