Enemona’s Q3’14 unconsolidated core revenues added 4% YoY to BGN 18.3m; bottomline is at break even, supported by reintegrated provisions (NEUTRAL)

Enemona reported BGN 19.8m unconsolidated revenues in Q3 2014, down by 6% YoY. However the core revenues represented BGN 18.3m and registered 4.3% growth over the year. The main increase of 31% YoY came from the contracts in Bulgaria where sales reached BGN 14.9m, while the revenues from the singed in the end of last year contract in UK were BGN 1.3m. The sales in Slovakia fell by 80% YoY to BGN 1m and in Germany - from BGN 1.3m to only BGN 34k. Additional revenues that supported the top line were mainly from reintegration of provisions. Material costs were significantly down – by 60% YoY to BGN 2.8m, 15.5% of core sales, while the costs for hired services increased mainly because of subcontracting for BGN 4m in Bulgaria and for BGN 0.8m in Austria. Adj. EBITDA came to BGN 0.6m compared to the adj. negative EBITDA of BGN 0.67m in the corresponding period. Financial costs of BGN 1.2m brought Enemona’s adj. EBT to a loss of BGN 1.5m compared to adj. negative EBT of BGN 2.3m in Q3’12. On cumulative basis Enemona registered BGN 42.7m core revenues, down by 24.5% YoY. Adj. EBITDA came to negative BGN 8.6m vs. BGN 1.1m in 9m 2013. Interest costs of BGN 1.9m, 4x higher YoY and financial costs on construction contracts for BGN 4m brought the company’s adj. EBT to a loss of BGN 15.5m. We noted the decrease of Enemona’s ownership in its subsidiary Energetics and Energy Savings Fund [6EE] by 37% to 51.1%, which, according to the management report, is a result of REPO-transactions. As a result LT investments in securities declined by BGN 1.9m to BGN 13.5m. In addition Enemona acquired a land plot near the port of Lom for BGN 6.8m - a collateral for unpaid receivables. As of end-Sept 2014 the company’s receivables reached BGN 110m, up 9% Ytd. Company’s IB debt fell by 5.5% Ytd to BGN 64m, but still 74% of it represented a ST-debt.