Korado Bulgaria net profit boosted 20% in H1 2018



Radiators producer Korado net profit boosted 20% y/y to BGN 3.2m in H1’18, according to the Company’s latest financial statements. Korado managed to deliver an exceptionally good result despite the 4.4% y/y decrease in the top line which dropped to BGN 20.6m. The latter was due to Korado selling fewer radiators, the total number dropping by 14% y/y or 251k pieces in H1’18.

However, Korado managed its operational expenses quite well despite the increase in steel prices, which is its main production material. As a result, OPEX dropped 9.4% y/y to BGN 17.2m. Accordingly, margins expanded with operating margin adding 350 bps to 17.8% and net profit margin increasing by 310 bps to 15.8% in H1’18 compared to their H1’17 levels.

Korado first interim dividend announced

In addition, Korado’s management announced that it would distribute ca. 40% of its interim net profit as dividend, translating into DPS of BGN 0.10. This is possible due to the Company’s adopting changes in its Articles of Association after shareholders voted in favor of interim dividend distribution earlier this year.
The dividend for FY2017 came at BGN 0.26. Although the same in absolute value as the 2016 one, the return for investors is 50% higher, considering the stock dilution which followed the 2017 capital increase.

Expansion plans

At a special meeting with investors on 29th March, 2018, Korado Bulgaria management announced new market opportunities in Germany where 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.

Check more in the video from the meeting