Monbat’s Jan-Feb 2017 top line surges on LME advance



Leading car batteries producer Monbat (5MB BU) books 23.7% y/y surge in Jan-Feb’17 top line, bottom line adds 3% y/y, according to preliminary monthly data published by the Company.

LME increase is the driver

Sales expanded 29% y/y in February alone adding to a total of BGN 51.7m of sales for the Jan-Feb.’17 period or 23.7% y/y surge. Key growth driver is continuing LME price expansion, which added 30% y/y in EUR terms by the end of Feb’17.

The Company’s management has projected a modest 4.7% y/y volumes growth in the car batteries units in 2017 after double digit growth in 2016. In 2017, Monbat is expected to start its tin extraction operations, which should add to both the top and bottom line.

The top line surge, however, has been only moderately passed to the bottom line as LME price advance has been quite steady over the last 12 months. Accordingly, Jan-Feb. 17 EBITDA added 9.3% y/y to BGN 8.3m while earnings before taxes grew only 3% y/y to BGN 5.5m.

In FY2016, Monbat delivered 8% y/y top line expansion to BGN 267m, EBITDA added 25.9% y/y to BGN 47.2m and net income grew 28.5% y/y to BGN 28.3m.

Av. 10% annual revenue expansion till 2021

Earlier in March Monbat published its 2017 – 2021 Development Plan , which showed the Company aims to double EBITDA by 2021 on volumes, new technology and business diversification. Average volume growth for the forecasted period is expected at 6%, which would translate into 10% y/y average revenue expansion. The forecasts are based on a EUR 2 000/ton LME with consolidated EBITDA growth for the period of 2019 – 2021 also reflecting incremental EBITDA impact of intended business extension and diversification, Monbat explained in the note to investors.

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