Steel radiator producer Korado proposed BGN 0.26 DPS and expects new contracts from Germany, the Company announced at meeting with investors on 29th March, 2018 where it presented its audited results for 2017.
Korado plans to start 6-months dividend distribution
In 2017, Korado booked revenues of BGN 42.4m and a net profit of BGN 4.8m of which it proposes to distribute 72% or BGN 0.26 DPS. The latter is 11.5% lower than ELANA Trading Research team estimate, yet it should be taken into account that the proposed dividend is the same as last year’s but after a 1-for-2 stock dividend from August 2017. Thus, the proposed dividend represents a 50% increase in proposed distributable profit.
Additionally, the Company plans to start interim 6-month dividend payments after a change in the Articles of Association to allow it.
New market opportunities in Germany for Korado
Another key takeaway from the meeting includes new market opportunities in Germany. Korado is finalizing a contract with a big existing client from Germany which has been buying 15% of Korado’s bath radiators in the past couple of years.
Korado’s CEO Vojtech Chamek said that the contract was for the sale of larger volume of panel radiators, the majority of which to be produced in Bulgaria. Chamek also shed light on pending new painting facility investment in Bulgaria with the process being postponed again as no final technology is decided on yet. The Company is still in the process of choosing the most suitable technology, in relation to which it entered into two strategic alliances with peers selling on premium segment markets of the UK and Germany. No further information concerning the amount of the investment or its start date was disclosed.
Possible capital increase to expand free-float
Finally, the Company considers entrance into the SOFIX index which would, however, require to increase its free float. Asked on possible steps in this direction, Chamek, said there was a possibility to repeat the capital increase from 2017.