Tailwind trends carry over into the second quarter

KONČAR revitalization of HPP Haditha reference

On the back of the historic 2021 and following the record-breaking first quarter of 2022, we have continued our growth trajectory in the second quarter of this year, achieving excellent business results. Primarily, we have improved our operating income by 20.5 percent and boosted our order intake by 20.2 percent. Our reports for the first time integrate consolidated results of Dalekovod Group. An agreement worth EUR 65 million that we signed for the revitalization of Haditha HPP marks a new global advance and a return to the Iraqi market. Notwithstanding a positive growth trajectory and great financial indicators, we end the first half of the year wary of the unpredictable and uncertain global circumstances.

“In addition to excellent results in order intake that are a tailwind of further business growth, we have also delivered great financial results. However, a likely new economic crisis exerts exceptional pressures on operational efficiency and necessitates an appropriate response with consistent communication with customers and suppliers. Over the last two years, we have significantly developed the volume of business and recorded an all-time high order intake at the start of this year. But we could not have predicted this surge in energy prices which will certainly impact our processes and costs. We expect that a mid-term effect of this situation will drive down profit margins as it will not be possible to incorporate all cost elements into the final price of the products. Moving forward, in the wake of all the instabilities and barriers we have been facing, the priority is to maintain export orientation and an upward growth trajectory while boosting profitability, continuing investments and furthering integration of Dalekovod into KONČAR’s operations”, says Gordan Kolak, KONČAR’s CEO.

Despite all the unpredictable and unfavourable circumstances, the order book continues to expand. New order intake amounts to HRK 2.624,6 million in H1 2022, which is a year-over-year rise of HRK 446.4 million or 20.5 percent. The leading-edge order is an agreement worth EUR 65 million that we signed with Iraq’s Ministry of Electricity for the revitalization of Haditha hydropower plant in June. The plant built in the 1980s is one of KONČAR’s flagship projects.

The book-to-bill ratio is exceedingly favourable and amounts to 1.37. Backlog at the end of June amounted to HRK 5,717.6 million, representing a 14.2% growth compared to the value at year-start and is HRK 904.0 million higher year-over-year. The merger of Dalekovod has additionally increased backlog by nearly HRK 1 billion, totalling HRK 6,707.0 million.

Consolidated income generated from sales of products and services amounts to HRK 1,915.6 million, representing a year-on-year increase of HRK 322.5 million (20.2%). Following the integration of Dalekovod in KONČAR’s Financial Statements, income increased by an additional HRK 261.4 million and amounts to HRK 2,177.0 million. This includes only the income of Dalekovod Group for Q2. The consolidated net profit of KONČAR Group amounts to HRK 224.6 million, up by HRK 150.7 million. EBITDA amounts to HRK 284.6 million, representing an increase of HRK 154.9 million compared to H1 2021. EBITDA margin is 14.9 percent (compared to 8.1 percent in H1 2021). Normalized EBITDA amounts to HRK 140.1 million and is HRK 23.6 million higher year-on-year.