Gradus

Poultry producer Gradus (GR6 BU) reported standalone net profit of BGN 11.9m, down more than twice y/y, for FY2019, according to the Company’s unaudited individual financial statements for Q4’19.

Part of the considerable difference compared to the previous year, is a result of Gradus receiving in 2018 dividends from subsidiaries both from the latter’s 2017 and 2016 net profits. Given the Company’s previously announced decision to distribute min. 90% of its net income, shareholders could expect to receive a DPS of BGN 0.049 for 2019, entailing a dividend yield of 2.9% at current quotes.

It should be noted that Gradus is distributing interim dividends and thus has already paid out BGN 0.022 for H1’19.

Poultry producer reported boost in dividend from subsidiaries in December

Gradus received BGN 2m in dividend from subsidiary Gradus-98, the Company announced in a filing to the Bulgarian Stock Exchange in mid-December 2019. Gradus-98 distributed BGN 2m of its FY2018 net profit to its majority shareholder. Please, note that Gradus has so far received BGN 4m from other subsidiaries, which boosts the total amount of dividend from subsidiaries to BGN 6m.

9M 2019 reports highlighted improvement in all operating segments

For 9M 2019 Gradus reported 23% y/y boost in consolidated sales on improvement in all operating segments, net profit surged 24.3% y/y – according to 9M’19 reports. Operating expenses added 18.6% y/y to BGN 123.6m in line with increased production and higher labor costs. As sales’ growth outpaced costs, profitability improved, net income margin expanding 0.27 p.p. y/y to 15.3%.

Dividends

Although Gradus did not manage to reach its pre-IPO targets, the management kept its promise to deliver high return to its investors. The proposed DPS for 2018, which was based on subsidiaries’ FY2017 results, was BGN 0.10, yielding 5.68% at quotes at the time and 5.56% at IPO price. This yield is among the highest on the BSE market.

Not to forget the interim dividend in 2019 – the poultry producer distributed to shareholders BGN 5.4m or 89% of H1’19 holding company’s net profit. It represented 7.16% yield at current quotes and 6.78% at the IPO price.

ELANA Trading Research reports on the company can be accessed in ELANA Online Investor Hub online.elana.net if one has a contract with ELANA Trading.