Elana Agrocredit registers a 16.5% slowdown in sales in Q4'19 and a 26.4% YoY lower EPS (NEUTRAL)

Elana Agrocredit Q4’19 revenue amounted to BGN 4m, which represented a 16.5% YoY drop. Total OPEX (BGN 3.6m) for the last quarter of the year also shrank 14.5% YoY, mainly due to the 21.8% YoY decrease in cost of materials (BGN 2.5m), which lowered the relative share of cost of materials in OPEX to 61.8% (-4.2 p.p). All that led to an EBITDA of BGN 0.4m (-30.3% YoY) with a 10.3% margin (-2 p.p). Net income for Q4’19 stood at 262k (-26.4% YoY), or BGN 0.01 per share. 2019 results revealed a 42.4% YoY surge in revenue (BGN 11.9m) and a 73.4% YoY surge in OPEX (BGN 8.3m). The latter increased as all its components grew and the cost of materials doubled to BGN 6.8m (+107.4% YoY). Consequently EBITDA inched forward by 0.5% YoY, while the margin lost 12.6 p.p to 30%. However below the EBITDA line, total financial expenses (BGN 503k) shrank almost to half of what they were in 2018 and thus led to a net income of BGN 2.8m or an EPS of BGN 0.08 (+17.1% YoY). On the balance sheet it is visible that the company decreased both short-term and long-term loans by 14.6% YoY and 34.9% YoY, respectively, which resulted in a 16.6 p.p. decrease in IB Debt/Equity ratio to 35.6% at the end of 2019.