Billboard posts 9.6% YoY consolidated revenues growth in Q3 2013, margins falls and 85% of EBT turns to be minority interest (NEUTRAL)

Billboard reported a 9.6% YoY consolidated revenues growth or BGN 7.3m in Q3 2013. While material costs fell by 2 pp YoY to 43.5% and compensation costs remained stable as a percentage of sales, the costs of hired services notably increased - by 43% YoY - and reached 21% of revenues (16% in Q3 ’12). Consequently, EBITDA fell by 10% over the year to BGN 1.1m, and EBITDA margin came to 15.6%, down from 19.2% in Q3’12. Even though financial costs remained flat YoY at BGN 0.4m, the bottom line further worsened to BGN 40K from BGN 184K in the corresponding year-ago period, as 85% of the profit turned out to be minority interest. On cumulative basis revenues were up by 7.6% YoY to BGN 22m. The slight increase of materials and hired services costs as % of sales - by 1pp and 1.4 pp respectively, pressed EBITDA down by 6.3% YoY to BGN 3.5m. Despite the decrease of depreciation costs by 11% YoY, BGN 0.43m were accounted as minority interest and the company’s net income fell to 40% YoY to BGN 0.24m. Billboard’s net debt remained unchanged QoQ as of end Sept at BGN 23.5m as or 37% of total assets with LT debt exceeding ST debt more than 2x (1.5x before debt restructuring). The company has invested almost BGN 2m in fixed assets since the beginning of 2013 as the 9mo CFO was stable at the last years’ level of above BGN 3m.