The Polish Deep Value Week – 2024/47
Weak reports, tough markets, rising costs and geopolitical uncertainty. On the positive side, some buyback activity.
Companies mentioned
· Amica (AMC)
· Action (ACT)
· Atlanta Poland (ATP)
· Bowim (BOW)
· Dekpol (DEK)
· Debica (DBC)
· Drozapol-Profil (DPL)
· ERG (ERG)
· Fasting (FSG)
· Hydrotor (HDR)
· Helio (HEL)
· Izolacja Jarocin (IZO)
· Izostal (IZS)
· Libet (LBT)
· Lena Ligthing (LEN)
· MFO (MFO)
· Monnari Trade (MON)
· Mercator Medical (MRC)
· Mostostal Zabrze (MSZ)
· Patentus (PAT)
· Pepees (PPS)
· Prochem (PRM)
· Polwax (PWX)
· Relpol (RLP)
· Remak (RMK)
· Stalprofil (STF)
· Stalprodukt (STP)
· Tesgas (TSG)
· Vindexus (VIN)
· Wasko (WAS)
Benjamin Graham famously suggested that one way to measure the valuation of the overall market was to assess the number of net-nets available. The prevalence of net-nets serves as a barometer for market valuation. When many such opportunities exist, it indicates a cheap market overall, while their absence suggests that the market is expensive.
Below is this week’s net-net screen from Stockopedia. Note though that today’s net-nets are not the same as Graham’s net-nets. We view many of these as un-investable being loss-making biopharma’s etc. But even though we would not invest in a large part of today’s crop we think it could be interesting to follow this number over time, and what percentage of total listed stocks qualify as a “naked” net-net without any type of quality adjustments to make then investable. So each week, we plan to hold “Graham’s Geiger counter” over our markets.
Amica –Layoffs amid declining demand
AMC │ Layoffs│ P/TB 0.54 │ Homewear Appliances│ URL
Amica SA, one of Poland's largest household appliance manufacturers, has signed an agreement with the Employees' Trade Union to carry out collective redundancies involving 39 employees. The layoffs will be implemented from November 20, 2024, to December 20, 2024, with the last employment contracts ending in March 2025 after the notice period. The agreement specifies criteria for selecting employees affected by the layoffs and outlines severance benefits and other employer obligations.
The company explained that the layoffs are necessary due to a continued decline in demand across both domestic and European markets. This downturn has resulted in lower-than-expected sales volumes and revenue. Amica stated that restructuring the workforce is essential to adapt to the current economic environment and maintain operational stability.
Amica's management board noted that the full savings from reduced personnel costs will be estimated after completing the restructuring process. The decision follows earlier announcements in October regarding consultations with trade unions, during which the potential layoffs were projected to affect up to 49 employees.
Action - Announces admission and first listing of series ad shares on WSE main market & buyback
ACT │ List Change│ P/TB 0.70 │ Electronics Distribution│ URL / URL / URL
ACT is a Polish company specializing in the distribution of IT equipment, consumer electronics, and office supplies, offering a wide range of products through both B2B and B2C channels. The company has announced the admission and introduction to stock exchange trading of 107,184 ordinary bearer shares of series AD (previously series D) on the Warsaw Stock Exchange (WSE) Main Market. The shares will be introduced to trading on November 22, 2024. These are likely held by anyone of the insiders, or larger shareholders, wanting some liquidity in part of their holding. It is very common, often for historic reasons, that Polish companies have several series of shares – often with the same rights.
ACT has acquired additional shares as part of its ongoing share buy-back program. Between November 14 and 20, 2024, the company purchased a total of 18.4k shares on the WSE through Ipopema Securities SA (another company often trading significantly below tangible book). The total value of these transactions was 322k pln, representing 0.1% of NOSH. As of November 20, 2024, ACT holds a total of 1.17m treasury shares, representing 7.1% of NOSH.
Atlanta Poland - Proposes dividend payment from 2023/24 net profit & AGM notice
ATP │ Dividend│ P/TB 0.92 │ Food & Nutrition│ URL / URL
ATP specializes in the import, processing, and distribution of nuts and dried fruits for the confectionery and bakery industries. The company reported a net profit of 25.4 mpln (10.1 mpln) for the financial year. The Management Board recommends allocating 4.0 mpln for dividend payments (0.65 pln per share – 3.8% yield) setting March 7, 2025, as the dividend record date and April 3, 2025, as the dividend payment date. The AGM will be held on December 18, 2024, at the company’s office in Gdańsk. There does not seem to be any unusual matter to be decided on during the AGM.
Bowim - Challenging quarter amid market pressures and uncertain outlook
BOW │ New Report│ P/TB 0.25 │ Steel Processing │ URL
BOW is specializing in the distribution of carbon steel products, including sheets, bars, tubes, and prefabricated reinforcement units, serving various industries across Poland. In Q3 2024, BOW reported a 12.8% drop in consolidated revenues compared to the same period in 2023, amounting to 1,375 mpln, due to declining steel prices and weak demand across key sectors such as construction and automotive. This was despite a 4.7% increase in sales volume in tonnage. EBIT fell sharply by 98.7%, reaching 0.4 mpln, while net income plunged to a loss of 13.8 mpln, reflecting the ongoing challenges from geopolitical tensions and rising energy costs.
Looking ahead, BOW forecasts continued volatility in steel prices and persistent challenges from currency fluctuations and high interest rates. Management emphasizes the importance of diversifying operations and expanding their distribution network while remaining cautious about geopolitical risks and tightening economic conditions in Europe.
Dekpol - Updates agreement for production plant in kuyavian-pomeranian voivodeship
DEK │ New Order│ P/TB 0.66 │ Construction│ URL
DEK specializes in general contracting, steel structure manufacturing, and property development, offering comprehensive investment implementation services. Dekpol Budownictwo Sp. z o.o. (a subsidiary), has signed an annex to the general contractor agreement for a production plant in the Kuyavian-Pomeranian Voivodeship. This annex, concluded on November 15, 2024, introduces additional and replacement works to the ongoing project.
As a result of the annex, the net lump-sum remuneration for the contract has increased by approximately 10% compared to the original value, now amounting to over 7% of Dekpol Capital Group’s 2023 sales revenues. Additionally, the deadline for completing the project has been extended from the first quarter of 2025 to the second quarter of 2025.
Mattdeepvalue wrote shortly about Dekpol on X.
Debica - Reduced capacity and fire recovery costs weigh on results
DBC │ New Report │ P/TB 0.81 │ Rubber Tires│ URL
DBC is a tire manufacturer producing a wide range of tires for passenger cars, vans, and trucks, primarily under the Dębica and Goodyear brands. During Q3 2024, DBC reported a net profit of 8.7 mpln, contributing to a YTD profit of 67.8 mpln, a significant decline from 200.6 mpln in the same period last year. Revenues for the first nine months totaled 1,852 mpln, down by 21% year-on-year, mainly due to lower sales prices and reduced production capacity caused by the August 2023 fire.
In August 2023, a fire occurred at DBC’s tire manufacturing plant in Poland. The fire caused significant damage to the production facility, leading to temporary halts in production and disruptions in the company’s supply chain. DBC managed to resume production within a few weeks after the incident.
Key factors impacting the results include ongoing recovery costs from the fire, totaling 104.8 mpln for the year, and the receipt of a 151 mpln insurance advance, partially offsetting operational losses. Margins have also contracted, with the gross profit margin at 1.4% compared to 12.6% last year.
The outlook remains cautious, with reconstruction efforts ongoing and full production capacity yet to be restored. Although cost reductions have been observed, challenges persist in regaining pre-fire profitability levels.
Drozapol-Profil - Strategic adjustments amid financial challenges
DPL │ New Report│ P/TB 0.34 │ Steel Processing │ URL
DPL is specializing in the distribution of metallurgical products, including ribbed bars, steel sheets, and sections, and also offers steel processing and transportation services. During 3Q24, DPL reported revenues of PLN 20.0 mpln (14.4 mpln), reflecting steady operational performance compared to earlier quarters. However, the company faced a net loss of 0.8 mpln (-4.9 mpln), primarily driven by operational challenges, including increased cost structures and negative adjustments in inventory valuations. Management remains cautiously optimistic about 2025.
The company continued its strategic stock buyback program, acquiring 1.1m treasury shares during the period, representing an impressive 18.5% of its share capital. This initiative aligns with efforts to consolidate ownership and streamline operations ahead of a planned delisting from the Warsaw Stock Exchange.
ERG - Reports declining revenues amid financial adjustments
ERG │ New Report│ P/TB 0.93 │ Plastic Films│ URL
ERG specializes in the production and wholesale distribution of plastic products, including various types of films, injection-molded items, and adhesive tapes, serving industries such as food and beverage, automotive, industrial, and printing. The company reported revenues of 58.5 mpln for 3Q24, marking a notable decline compared to 74.4 mpln during the same period in 2023. The reduction in sales was attributed to a softer demand for the company’s products amidst ongoing economic uncertainties. Operating profit also dropped significantly to 0.2 mpln, down from 4 mpln a year earlier. Looking ahead, ERG acknowledges continued challenges linked to macroeconomic headwinds, including fluctuations in demand and rising cost pressures, particularly in the European market.
Fasing – Declining revenues and profitability in tough market
FSG │ New Report│ P/TB 0.25 │ Industrial Chains│ URL
FSG is a manufacturer specializing in industrial link chains and accessories, primarily serving mining, energy, and transportation industries. During 3Q24, FSG reported net sales of 62.1 mpln, a slight decline from 65 mpln in 3Q23, mainly due to decreased demand in key segments. Cost of sales was reduced to 36.1 mpln, leading to an increase in gross profit margin to 41.8% (39.7%). EBIT stood at 4.8 mpln (11.1 mpln).
Net profit for the quarter was 1.1 mpln, a significant drop from 8.2 mpln in 3Q23, primarily driven by increased financial costs and reduced other income. The company expects continued pressure on sales in the coming quarter but plans to focus on operational efficiencies and cost management to sustain profitability. Investments in long-term assets and inventory adjustments remain part of its strategic initiatives.
Hydrotor - Reports declining sales and financial challenges
HDR │ New Report │ P/TB 0.53 │ Hydraulics│ URL
HDR specializes in the production and regeneration of hydraulic components, including gear pumps, oil pumps, distributors, cylinders, valves, and hydraulic power units, serving industries such as agriculture, construction, and machinery manufacturing. In the third quarter of 2024, HDR reported revenues of 27.2 mpln reflecting a 7% year-on-year decline. EBIT was -4.0 mpln (-1.0 mpln) for the quarter and -8.6 mpln year-to-date, compared to -0.3 mpln in the same period last year. Key drivers of the decline included reduced orders and macroeconomic headwinds in domestic and export markets, particularly in agriculture. Despite some stabilization in subsidiary Wizamor, other units, including Agromet, experienced deepening losses.
Looking forward, the group plans restructuring measures to reduce operational costs, optimize financial flows, and assess price adjustments. Management emphasized liquidity stabilization but noted potential risks, particularly in the Agromet subsidiary. Expansion strategies include increasing domestic and international sales to mitigate ongoing market pressures. The company has a strong financial history and is currently having its worst time during the 21th century. On the positive side net gearing is just 30% and the current ratio is a healthy 1.8x.
Helio – AGM Notice
HEL │ AGM│ P/TB 0.53 │ Food & Nutrition│ URL
HEL specializes in the production, import, and distribution of dried fruits, nuts, seeds, and grains, as well as the manufacturing of poppy seed products. The AGM of HEL will be held on December 16, 2024, with shareholders expected to decide on quite standard matters. The agenda includes reviewing and approving the annual financial statements for the 2023/2024 fiscal year, as well as reports from the management board, supervisory board, and a remuneration report for the board and executives. The meeting will also decide on granting discharge of duties to the members of the management board and supervisory board for their work during the same period.
Additionally, the AGM will address the allocation of the company’s net profit and consider potential changes to remuneration policies for the board and executives. Proposals to amend the company’s Articles of Association will also be discussed. Furthermore, decisions regarding the dissolution of a previously reserved fund and the potential buyback of the company’s own shares, including the creation of a new reserved fund for this purpose, are on the agenda. The company has in the past never made any buybacks and the founder owns 81% of the shares.
In the Articles of Association, amendments are proposed to § 18.1 and § 19. According to the proposal, the General Meeting shall be considered quorate only if at least 20% of the share capital is represented, and resolutions shall be adopted by an absolute majority, unless otherwise specified in the Articles or by law. Additionally, the scope for holding General Meetings is expanded to include the company’s registered office, Brochów, or Warsaw. Since Leszek Wasowicz controls 81.3% of the shares, the 20% amendment would in fact make it impossible for a minority holder to call for an EGM and get it completed, if Wasowicz did not decide to show up – since less than 20% of the shares then would be attending the meeting.
It will be interesting if we see some buyback activity in the near term, and then after that an attempt to take the company private. Unfortunately, when that happens in Poland, quite often there is no premium offered to the shareholders but simply the 90-day average, or similar – what the law states needs to be the minimum level for a bid.
Izolacja Jarocin - Resilient performance amidst market challenges
IZO │ New Report│ P/TB 0.68 │ Building Products│ URL
IZO specializes in the production of waterproofing and sealing materials for the construction industry, including asphalt membranes, bituminous roofing membranes, and building putties. For the year’s first three quarters, the company reported revenues of 26.9 mpln, a decrease compared to 27.6 mpln in 3Q23. EBIT rose to 2.1 mpln (2.0), while net profit remained stable at 1.5 mpln (1.5 mpln).
The company highlighted key risks affecting future performance, including volatile raw material prices, uncertainties in the oil market, and currency fluctuations impacting procurement costs and competitiveness. Challenges in the construction market, influenced by weather-dependent demand and heightened competition, continue to shape the business environment.
Looking ahead, the management remains cautious. Seasonal factors and unpredictable economic conditions could pressure margins and revenue stability. However, strategies focusing on competitive pricing, customer retention, and cost optimization are expected to sustain operational efficiency.
Izostal - Sales decline and profit margin challenges
IZS │ New Report│ P/TB 0.34 │Steel Processing│ URL
IZS specializes in the production and distribution of steel pipes and anti-corrosion coatings, primarily serving the gas, oil, and water transmission industries. During 3Q24, IZS reported revenue of 152.8 mpln, reflecting a 15% year-over-year decrease due to weaker demand in the gas transmission infrastructure segment. EBIT for the quarter reached 5.7 mpln, down from 4.6 mpln a year earlier, with margins slightly pressured by rising material costs. The net profit stood at 2.1 mpln, also down from 3.1 mpln in 3Q23. The company emphasized better inventory management and a 17% reduction in inventory write-downs compared to Q2, which supported cash flow generation.
Management maintains a cautious stance for 4Q24, expecting continued challenges in its core infrastructure market. While diversification efforts in steel processing are gaining traction, they are unlikely to offset revenue losses fully in the short term. Inflationary pressures and fluctuating demand remain key risks. The company aims to optimize its cost structure and improve receivable collections to sustain liquidity.
Libet – “Costless” buyback & EGM
LBT │ EGM│ P/TB 0.87 │ Building Material│ URL / URL
LBT specializes in the production and distribution of concrete paving stones, slabs, and architectural elements for the construction and landscaping industries. On November 19, 2024, the company acquired 4.7m of its own shares, representing 9.4% of the total share capital and voting rights, from Jendava Polska sp. z o.o at a cost of zero (!). This transaction was part of a mutual settlement agreement between Libet S.A. and its former CEO, Thomas Lehmann, finalized on September 18, 2024. This transaction was executed for the purpose of share cancellation. Before the acquisition, Libet S.A. held no own shares. During the EGN of LBT on November 20, 2024, several resolutions were passed. Firstly, the 4.7m of the company’s own shares, representing approximately 9.4% of total voting rights, were canceled.
There is a first day for everything, and today was the first during which we saw a buyback at a price of zero!
Lena Lighting - Mixed performance with declining revenues but stable profitability
LEN │ New Report│ P/TB 0.74 │ Lightning Products│ URL
LEN specializes in the design, manufacture, and sale of high-quality LED lighting systems and luminaires for various applications, including architectural, industrial, and street lighting. During 3Q24, LEN reported a significant decline in revenues, down 19.3% YoY to 32.8 mpln (40.6 mpln), attributed to weaker domestic and international sales. However, the company maintained a strong gross margin at 35.7% (31.4%). Net profit for the quarter was 1.15 mpln, a sharp decline from 2.26 mpln in 3Q23.
The company remains cautious about future performance, citing persistent market uncertainty and a challenging macroeconomic environment. However, Lena Lighting plans to continue focusing on cost management and operational efficiency to sustain profitability in upcoming quarters.
MFO - Profit recovery and strategic challenges ahead
MFO │ New Report│ P/TB 0.67 │Steel Processing│ URL
MFO specializes in the production of steel profiles, including reinforcements for PVC windows, roller shutter profiles, and sections for drywall constructions, serving both domestic and international markets. MFO reported revenues of 468 mpln for the first nine months of 2024, marking a 9% increase compared to the same period in 2023. Operating profit reached 12.4 mpln, up significantly from 1.4 mpln in the previous year. Net profit for the period stood at 5.8 mpln, reversing a net loss of 5.7 mpln recorded in the corresponding period of 2023. Improvements were driven by higher sales volumes and an optimized cost structure.
Looking ahead, the company anticipates sustained revenue growth, particularly in construction and automotive profiles, but acknowledges risks tied to steel price volatility and macroeconomic conditions in Poland and the EU. Strategic investments in production capacity are expected to enhance competitiveness and capture market share in the medium term.
Monnari Trade – New analysis on Turning Rough Stones
MON │ Analysis│ P/TB 0.48 │ Apparel Retail│ URL
See analysis here.
Mercator Medical - Reports preliminary q3 2024 results
MRC │ New Report│ P/TB 0.59 │Medical Devices│ URL
MRC specializes in the manufacture and distribution of disposable medical gloves, dressings, and non-woven fabric products, serving healthcare and various other industries. The company announced preliminary financial results for the third quarter of 2024. The company reported consolidated sales revenues of 139.5 mpln, an increase from 118.1 mpln in 3Q23. Consolidated EBITDA improved to 1.4 mpln, up from -1.4 mpln in 3Q23. The company recorded a consolidated net loss of 25.3 mpln, compared to a 20.1 mpln loss in 3Q23. The final results will be disclosed in the consolidated quarterly report for 3Q23, scheduled for publication on November 29, 2024.
Mostostal Zabrze – 3Q24
MSZ │ New Report│ P/TB 1.12 │ Construction│ URL
MSZ is an industrial group specializing in design, production, construction, and assembly services across sectors such as chemical and petrochemical industries, metallurgy, energy, environmental protection, and public facilities. The company reported sales of 249 mpln (365.9 mpln) for 3Q24. EBIT increased to 41.1 mpln (20.0 mpln), corresponding to an EBIT margin of 16.5% (5.5%). However, the company had a one-time effect of 27.3 mpln related to the investment in Polwax. So adjusted for that the EBIT margin was instead 5.5%.
Looking ahead, management provided a cautiously optimistic outlook, citing a robust pipeline of new contracts and partnerships expected to bolster revenue in the upcoming quarters. However, uncertainties in macroeconomic conditions and geopolitical factors remain key risks to sustained growth.
Patentus - Challenging quarter with focus on operational continuity and risk management
PAT │ New Report│ P/TB 0.51 │Steel Processing│ URL
PAT specializes in the production and servicing of heavy electrical equipment, including scraper conveyors, belt conveyors, coal crushers, haulage platforms, and drift platforms, primarily serving the mining industry. For the quarter, sales decreased by 16.5% to 22.3 mpln (26.7 mpln). EBIT decreased to 3.2 mpln (5.8 mpln), corresponding to an EBIT margin of 14.3% (21.8%). The company has been on a tear the last few years, peaking at unheard of EBIT margins of close to 30%.
The outlook remains uncertain due to potential impacts from geopolitical and economic instability, particularly the conflict in Ukraine. Management emphasized monitoring risks such as contract execution challenges, order reductions, and disruptions to service operations. Despite these risks, the company reaffirmed its commitment to operational continuity and transparent reporting.
Pepees - Announces preliminary financial results for 3Q24
PPS │ New Report│ P/TB 0.53 │ Food & Nutrition│ URL
PPS is specializing in the processing of starch potatoes, producing products such as potato starch, crystalline glucose, maltodextrin, glucose syrups, potato flakes, and potato protein for various industries, including food, pharmaceutical, feed, chemical, textile, and paper. The company has published its preliminary financial results for the first three quarters of 2024, revealing declines in profitability compared to the same period in 2023. The company reported consolidated sales revenues of 174 mpln, slightly down from 176 mpln in 2023. The operating result showed a loss of 10.2 mpln compared to a profit of 15.2 mpln the previous year, while the net result reflected a loss of 16.0 mpln, down from a profit of 6.0 mpln in 2023.
The company attributes the declines to low starch production during the 2023 campaign, driven by insufficient starch potato availability, along with a decline in potato starch prices and a strong PLN. However, since September 2024, market conditions have improved, with higher starch prices and a stronger EUR and USD benefiting the business.
Looking ahead, the company is optimistic about continued improvement in 4Q24 and into 2025. In the 2024 potato campaign, PPS purchased and processed 40% more starch potatoes than the previous year, which significantly reduced production costs and improved margins. Plans for 2025 include increasing raw material contracting by another 40%, as agricultural producers shift cultivation toward starch potatoes due to declining sugar beet and grain prices. Additionally, the company is set to launch a new starch modifier production line in early 2025, allowing the company to enter new sales markets, including the food and pharmaceutical sectors. These developments are expected to drive higher revenues and profits in 2025, with the Management Board anticipating that the company will close 2024 with a smaller loss than recorded at mid-year.
Prochem - Declining revenue and persistent losses amid operational challenges
PRM │ New Report│ P/TB 1.12 │ Engineering│ URL
PRM is a engineering company offering comprehensive design and construction services for industrial, environmental, and general infrastructure projects. In 3Q24, PRM reported a significant drop in consolidated revenues to 36.3 mpln (66.8 mpln), a 46% decrease compared to the same period last year. EBIT was -2.9 mpln (-12.7 mpln), corresponding to an EBIT margin of -8% (-19%). The company cited seasonality in construction activities as a major factor, alongside broader economic challenges.
The outlook for 2024 remains cautious, with management focusing on stabilizing cash flow and reducing operational inefficiencies. Despite the ongoing challenges, there are no immediate concerns regarding the company’s ability to continue as a going concern. The group aims to improve its revenue streams within the engineering and technical consulting sectors.
Polwax - Challenging market conditions and strategic adjustments
PWX │ New Report│ P/TB 1.46 │ Chemicals│ URL
PWX is specializing in the production and distribution of refined and deodorized paraffin, waxes, and specialty industrial paraffin compositions, serving industries such as candle-making, wood processing, varnishes and paints, explosives manufacturing, paper and packaging, rubber, and food. In 3Q24, PWX faced a significant decline in operational performance due to reduced demand for paraffin products and lower sales volumes. Revenues dropped by 33.8% compared to 3Q23, amounting to 65.8 mpln (99.5 mpln). Net loss for the quarter was 1 mpln, a sharp contrast to the 2.3 mpln profit in Q3 2023.
Strategically, the company progressed with initiatives like securing a strategic investor, MSZ, which acquired shares in a private placement, providing 30.8 mpln in funding. This bolstered PWX’s liquidity and enabled the increase of credit limits with financial partners, vital for operational stability. The company also concluded a comprehensive financing review aimed at achieving sustainable operations.
Looking ahead, PWX anticipates continued challenges in demand but remains focused on exploring renewable raw material alternatives and stabilizing its financial base to mitigate market pressures. These adjustments are expected to align the company with evolving industry trends and ecological standards.
Relpol - Reports weak results but signals optimism for 2025
RLP │ New Report│ P/TB 0.62 │ Electronic Components│ URL / URL
RLP specializes in the production and distribution of electromagnetic relays and related components, serving industries such as industrial automation, power electronics, telecommunications, and household appliances. The company reported weak financial results for 3Q24, with revenues falling to 24.3 mpln (32.9 mpln), a 26% year-on-year decline and 10% lower than 2Q24, missing analyst forecasts by 9%. Sales in Poland decreased by 4% year-on-year, while export sales dropped by 35%, including a 39% decline in Germany. These figures mark the lowest quarterly revenue for the company in 11 years, reflecting challenges in the industrial and investment sectors.
Gross sales profitability also declined, standing at 10.6% in 3Q24, down from 16.2% a year earlier and slightly below 11.4% in H1 2024. EBITDA was PLN 0.0 mpln, improving from a loss of -1.6 mpln in 3Q23 but slightly below expectations of +0.2 mpln. The company reported a net loss of 2.2 mpln, compared to a loss of 1.1 mpln a year ago.
The company has launched new production lines, financed by a grant from NCBiR, and is currently calibrating its long-series production chain for full efficiency. Net debt increased to PLN 14.6 million, up from PLN 12.8 million in Q2 2024, though still below PLN 18.8 million a year ago. RLP has secured waivers for financing covenants from ING and adjusted agreements with BNP, ensuring compliance.
While no significant improvement in financial results is expected for 4Q24, RLP sees early signs of a market recovery in 2025. The company highlights shrinking customer inventory levels, which could drive new orders. Management remains cautiously optimistic, expecting gradual improvement in the market situation, aligning with earlier forecasts of recovery in the coming quarters. Analysts also believe that 2025 could be a better year for RLP as the industrial sector stabilizes.
Remak - EGM
RMK │ EGM│ P/TB 0.50 │ Engineering│ URL
RMK specializes in the modernization, repair, and assembly of steam and water boilers, as well as the installation of power engineering equipment, flue gas desulphurization systems, electrostatic precipitators, industrial installations, and pipelines. At the EGM held on November 19, 2024, RMK approved the 2023 Remuneration Report for the Management Board and Supervisory Board. The report had previously been assessed by an independent auditor, who confirmed its compliance with regulatory requirements. The report highlighted the total compensation of key executives, consisting primarily of fixed components with some performance-related bonuses.
Members of the Supervisory Board primarily received fixed compensation, with minimal variations arising from additional benefits such as healthcare coverage. Shareholders voted to approve the report, although 18.4% opposed it, reflecting some disagreement among stakeholders.
Stalprodukt - Challenging quarter with focus on stabilization
STP │ Xx│ P/TB 0.34 │Xx│ URL
STP specializes in highly processed steel products, including transformer sheets, cold-rolled sections, and road barriers, serving both domestic and international markets. In 3Q24, STP faced a challenging environment, with net revenue from product sales dropping to 957 mpln compared to PLN 1,065 mpln in 3Q23. EBIT reached -6.1 mpln, a significant downturn from the profit of 4.1 mpln in the same quarter last year.
Despite the weak quarter, STP emphasized ongoing efforts to optimize its operations and maintain liquidity. Investment cash flow was negative at -150 mpln, attributed mainly to capital expenditure on equipment upgrades and maintenance. Management reaffirmed its focus on streamlining operations across subsidiaries, particularly in the zinc segment, which showed some signs of recovery through cost reductions. Looking forward, STP anticipates continued volatility but remains optimistic about the long-term potential of its diversified business portfolio.
Tesgas - Challenging quarter with focus on recovery and strategic goals & share conversion
TSG │ New Report│ P/TB 0.32 │ Industrial Services│ URL / URL
TSG specializes in the construction, maintenance, and design of gas infrastructure, including high, medium, and low-pressure gas networks, boiler rooms, pressure vessels, and microgeneration systems. During the third quarter of 2024, TSG reported significant declines in revenues, amounting to 19.8 mpln, compared to 35.2 mpln in the same period last year. EBIT, however, increased to 1.1 mpln (0.7 mpln), corresponding to an EBIT margin of 5.6% (2.0%).
The company outlined a clear challenge in rebuilding its order portfolio, especially in its key gas services segment, which saw the largest revenue contraction. The renewable energy subsidiary, piTERN, remains a strategic focus, benefitting from EU and Polish initiatives to boost green energy adoption.
Looking ahead, the management aims to secure more contracts in its gas services segment to stabilize revenues and improve profitability. Strategic investments in renewable energy and efficiency improvements are expected to support the group’s long-term growth and resilience against market fluctuations.
The Management Board announced the adoption of a resolution on November 4, 2024, approving the conversion of 820k privileged registered Series A shares (c. 7.5% of NOSH) owned by Marzenna Barbara Kocik into ordinary bearer shares. This decision was made in response to a formal request submitted by the shareholder on the same day. Kocik previously was a director of the company and has at least been a shareholder since the company’s listing in 2008. This conversion facilitates greater tradability of the shares in the market – we will see if there will be any additional volumes in the market in the near future.
Vindexus - Revenue decline amid cost adjustments and strategic positioning
VIN │ New Report│ P/TB 0.38 │ Financial│ URL
VIN specializes in debt management, including the purchase, sale, and collection of various types of receivables. For the first nine months of 2024, VIN reported a decline in revenues from core operations, down 10.8% year-on-year to 76.8 mpln (86.2 mpln), driven by lower returns from acquired receivable portfolios. EBIT for the same period was 21.6 mpln (32.0 mpln), corresponding to an EBIT margin of 28.1% (37.1%).
Vindexus strengthened its financial position with cash reserves surging to PLN 101.8 million by September-end, largely supported by a series of bond issuances worth PLN 66.4 million. This funding aims to bolster liquidity and prepare for potential portfolio acquisitions, though no new receivable portfolios were purchased during the quarter due to unfavorable market conditions.
The company is strategically focused on maintaining liquidity while exploring opportunities for portfolio expansion. Management anticipates sustained cost pressures from rising employment costs but remains committed to balancing operational efficiency with growth objectives.
Wasko - Steady recovery and optimistic outlook
WAS │ New Report│ P/TB 0.67 │Consultant│ URL
WAS is an Information and Communication Technology (ICT) company specializing in the development and manufacture of software, as well as the provision of services within the implementation, maintenance, and operation of IT systems, including IT audits, training, software installation, and system integration. The company reported consolidated revenue of 144.4 mpln in Q3 2024, up 28.6% compared to 112.3 mpln in 3Q23. The group achieved a net profit of 3.2 mpln for the quarter, a notable recovery from the net loss of 14.6 mpln in the same period last year. Looking ahead, management expects sustained revenue growth, supported by a strong pipeline of orders in its core IT and telecommunications divisions.
The writer may own shares of the companies mentioned. This communication is for informational purposes only.