Gradus 2018 individual net profit reached BGN 26.7m, dividend distribution target confirmed (NEUTRAL)

Gradus net profit reached BGN 26.7m in its first full financial year since the restructuring and listing on the Bulgarian Stock Exchange. The result came on the back of BGN 27.2m dividend income and BGN 0.3m interest income from loans, extended to subsidiaries. In line with its dividend policy Gradus’ Board of Directors confirmed its intentions to propose at least 90% of 2018 net profit to be distributed at the company’s next AGM. The above equals BGN 0.099 dividend per share (5.5% dividend yield at the current price). Q4 stand-alone net profit was BGN 2.6m on BGN 2.5m pre-announced additional dividend income from Gradus-98. On the balance sheet proceeds from the IPO and dividends from subsidiaries were extended as BGN 55.4m loans to subsidiaries to support implementation of latter’s investment programs. Dividend receivables were BGN 9m. Financial leverage was 0 in line with management policy.