Korado Bulgaria

Steel radiators manufacturer Korado posted 10% y/y growth in revenue to BGN 10.4m and 21% surge in net income to BGN 1.6m in Q1’18, according to Company’s published financial statements for Q1’18.

Korado has expanded its bottom line on substantial revenue growth, driven by higher sales prices, while keeping its OPEX in check, the latter growing by only 7.7% y/y to BGN 8.9m.

In Q1 2018, the Company produced 111k radiators, which is 1%y/y higher. For the same period it sold 130.4k radiators, which is 2.2% y/y less, the number of sold radiators dropping in all markets.

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 in 2018. 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

At an Investor Day in the end of March 2018 Korado management announced new market opportunities in Germany. The company 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.

More from Investor Day 2018 and videos from the meeting

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