|Friday, May 11, 2012||Publisher: Íslandsbanki Research - firstname.lastname@example.org - Resp.Editor: Ingólfur Bender|
Hagar: earnings in line with expectations
Hagar has released its operating results for the final quarter of the 2011-2012 fiscal year. The company's accounting year extends from the beginning of March to the end of February; therefore, the earnings report published yesterday is for the period December 2011- February 2012. Goods sales totalled ISK 18.6 bn during the quarter. Revenues grew by 6.1% year-on-year, and revenue growth is virtually on a par with price increases over the same period. EBITDA was ISK 1.1 bn during the period, and the EBITDA margin was 5.9%. EBIT was ISK 723 m and the EBIT margin 3.9%. The low EBIT margin is due mainly to the fact that goodwill was written off in the amount of ISK 173 m during the period. The profit for the period was ISK 477 m. Sales totalled ISK 68.5 bn in the last operational year, an increase of 5.3% YoY after adjusting for the exclusion of the 10-11 grocery store chain. EBITDA for the last operational year was just under ISK 4.2 bn, as opposed to ISK 4.4 bn the year before. At 6.1%, the EBITDA margin has contracted YoY, due primarily to rising input prices and a weaker króna, as well as the departure of 10-11. Profit for the last operational year totalled ISK 2.3 bn, or 3.4% of turnover. The group's total assets amounted to ISK 23.4 bn at the end of the period. Equity was ISK 6.2 bn at the end of the operational year, and the equity ratio was 26.6%.
Hagar's operating performance last year was strong, and in line with projections and expectations. The majority of its turnover is from groceries; therefore, performance depends somewhat on the general economic situation and on how the recovery progresses. The outlook for the company is excellent. According to a recent press release, the projection for the coming operational year is for results comparable to last year. Hagar management does not anticipate strong growth in the current operational year, owing to the high level of uncertainty in Iceland, which affects households' disposable income and therefore the company's revenues.
Hagar shares are currently trading at ISK 18.5, an increase of 8% year-to-date and 22% since the company was listed on the OMXI exchange in mid-December 2011.
GDM: halfway mark reached
In the Central Bank of Iceland (CBI) foreign currency auction held on Wednesday, participants whose bids were accepted were given the option of selling Treasury bills and bonds maturing before year-end 2013 in order to finance their foreign currency purchase. According to a press release issued by Government Debt Management (GDM) yesterday, no bonds were bought on behalf of the Treasury. Actually, owners of offshore krónur have demonstrated little interest in using this avenue for participation in CBI auctions, and the majority of the krónur the CBI has bought in the auctions have come from deposit accounts.
Two Treasury bond series are scheduled to mature before 2013: RIKB12, which matures in August 2012, and RIKB13, maturing in May 2013. The majority of these bonds are owned by non-residents, who held over 69% of outstanding RIKB12 bonds (including loaned securities) and 78% of RIKB13 bonds as of end-April. Non-residents are also by far the largest owners of Treasury bills, and even though they bought no bills at all in the April auction, they owned over 69% of the outstanding stock at the end of the month.
Non-residents starting to buy RIKB14
Almost half of planned 2012 issuance already
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