Q4’15 sales of Neochim declined with 12.2% YoY; EBITDA and bottomline improved, however remained seasonally in the red (NEUTRAL)

Q4 2015 revenue of Neochim decreased with 12.2% YoY to BGN 64.4m. At the same time, the materials’ expenses declined with 28.6% YoY to BGN 45.9m, which offset the 23.8% YoY increase in the compensation expenses and the growth of the other operating expenses, and led to a 19.1% YoY decrease in OPEX to BGN 69.7m. As a result, the EBITDA remained negative at BGN 5.3m, but better relative to the negative BGN 12.9m accounted in Q4 2014. The D&A expenses remained flat YoY and the net financial income dropped with 76.2% on an annual basis to BGN 511k, resulting in a net loss of BGN 7.6m vs. a net loss of BGN 12.1m in the corresponding year-ago period. On a cumulative basis, revenue rose with 22.3% YoY, while OPEX increased with 7.8% on an annual basis, netting an EBITDA of BGN 17.6m vs. negative 15.4m in 2014. With lower FX gain and no income from investment the 2015 net income was BGN 6.0m vs a net loss of 24.4m in 2014. On the balance sheet, the WC declined with 46.3% YTD to BGN 3.7m, as receivables and inventories decreased with 69.4% and 18.3%, respectively, which offset the 39.4% drop in payables. BGN 11.7m short term IB debt was repaid, as well as BGN 4.2m long-term debt, which reduced the IB Debt/ Equity to 35.7% vs 60.6% as of end-2014.