Waberer’s International has published its financial results regarding the first quarter of 2020. Its net loss was 2.5 million during this period which wouldn’t sound very bad compared to the 4,4 million euros loss of last year’s same period. However, the company’s shares are now sold for half of last year’s maximum price – 752 Hungarian forints (approx 2, 15 euros).
The company’s revenue decreased by 5% year-on-year in the first quarter of 2020 to 174 million euros. Compared to the first quarter of last year, revenue was 17% lower in the International Transportation Segment (ITS) as a result of the fleet reduction programme, partly offset by the impact of slightly higher prices. In the Regional Contract Logistics (RCL) segment, revenue grew by 33% in the first quarter as a result of a new large automotive in-house logistics operation that started in December 2019.
Regular EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 1 percent compared to the same period last year. Regular EBIT (earnings before interest and taxes) became positive after one and a half years of losses, regular net profit improved by 1.9 million euros.
International freight still at a low ebb
The report explains that the coronavirus epidemic has had a severe impact on the group’s operations since the second half of March. Management believes that demand in the European international freight market will be significantly lower than expected in the second quarter as well.
International Transportation Segment revenue decreased by 17% to 111 million euros in the first quarter of 2020 compared to the same period last year. The company says, that the fleet reduction programme, leading to a 17% year-on-year decrease in the number of trucks, was the main reason for the decrease in revenue. Additionally, the drop in orders in the last two weeks of the quarter due to the coronavirus crisis also contributed to the decrease in revenue.
Gross profit in the first quarter of 2020 decreased by 21% year-on-year to 16 million euros, with gross margin indicating a 0.6 percentage point decrease to 14.1%. Although the utilisation of trucking capacities increased considerably year-over-year as 10% fewer orders were executed with 17% fewer trucks, the extra expenses related to the repatriation and halting of vehicles in the last two, crisis-hit weeks of the quarter had unfavourable effects on gross profit and gross margin.
Regional logistics still thrives
It is worth mentioning that while the international freight department of the company has met significant difficulties, the domestic freight department is again and again successful. Revenue in the Regional Contract Logistics segment rose by 33% year-on-year to 46 million euros in the first quarter of 2020. The increase in revenue was mainly due to a large contract in the automotive sector where Waberer’s provides in-house logistics services.
According to the financial report, starting in mid-March, the coronavirus had a serious impact on the structure of the activities of the segment shifting towards the logistics and transportation orders of consumer staples, replacing services related to the manufacturing sector as factories shut down especially in the automotive industry. These effects were broadly neutral on total volumes in the first quarter of 2020. Gross profit grew by 40% year-on-year to 13 million euros with gross margin increasing by 1.3 percentage points to 27.3%, reflecting the positive effects of the repricing efforts among key clients, while the fuel and transit prices also moved favourably during the quarter. EBITDA increased by 54% year-on-year to 7 million euros, corresponding to a margin of 15.2%.
Is the company financially stable?
The management ensures investors that the financial stability of the group is still ensured, as the company has taken special cost-cutting measures within days of noticing a drop in orders, and a debt moratorium has been enacted in Hungary, which also applies to financial leasing schemes behind the financing of the group’s vehicles.
Waberers’s shares with a nominal value of 0.35 euros are traded in the premium category of the Budapest Stock Exchange, the closing price of the share on Thursday was 716 Hungarian forints – which was 12 forints or 1.65 percent lower than the previous closing price.
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