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Key stock for the week
- Apranga, Lithuania’s apparel retailer, will be announcing its preliminary 2006 results this week. It is estimated that the Company should show a net profit of LTL20.2mln for 2006 and a profit exceeding this amount may make the Company’s share attractive once more. Such a result would reduce the P/E from the current level of 30.1x to a more attractive and lower level of 26.9x
- It is believed that Estonia’s brewery, Saku Olletehas, presents an opportunity with its high proposed dividend payment. The Company has proposed a dividend this year of EUR1.60, which implies a current dividend yield of 10% (relative to the 6.7% dividend yield proposed in 2006). To merely equal last year’s proposed dividend yield, the share price must rise to EUR23.88. Shareholders listed on 19 April, 2007 will be eligible for the dividend.
- It is in our opinion that Kalev, Estonia’s confectionery, may be over diversifying with its recent 100% acquisition of the publishing company and the acquisition of the TV production company. Further, it is believed that the price of EEK54.8mln for the publishing company, which generates a net profit of EEK2.3mln, may be
slightly high.
- Although the initial reaction to the 2006 results of Merko Ehitus, Estonia’s construction company, have not been positive, it is believed that the share price is currently attractive. The preliminary results reduce the Company’s P/E from 17.2x to 11.1x. The 32.6% increase in net profit has also resulted in the share price
appearing to be relatively cheaper than that of Eesti Ehitus, which historically has been cheaper than Merko Ehitus.
Last week events and facts
Lithuania’s Limarko Laivininkyste Kompanija, a shipping company, Zemaitijos Pienas, a dairy company, and Lietuvos Elektrine, a power plant, announced their preliminary results.
Limarko Laivininkyste Kompanija announced sales of LTL115.7mln (which it projects will increase to LTL140.7mln in 2007) and net profit of LTL11.7mln (which it projects will remain constant in 2007). The share price fell by 6.1% to LTL1.54 on the news. Similarly, the share price of Zemaitijos Pienas, fell after it announced a 18.1% rise in its sales and a 39.3% rise in its net profit. The share price fell by 0.4% to LTL25.50.
Lietuvos Elekrtine, though, marginally gained support by its investors when it announced that it had increased its revenues and net profit from LTL205.3mln and LTL17.2mln in 2005, respectively, to LTL264.1mln and LTL25.0mln in 2006, respectively.
Estonia’s entertainment group, Olympic Entertainment Group, construction company, Merko Ehitus, and department store, Tallinna Kaubamaja, all experienced declines on the announcement of their 2006 results.
The share price of Olympic Entertainment Group fell 3.2% to EUR10.50 after the Company announced a revenue for 2006 of EEK1,669.2mln (up 89.7%) and net profit of EEK388.3mln (up 87.5%). The best growth was experienced in Latvia (320.1%) and Ukraine (199.3%). The net profit margin, though, has declined marginally from 23.5% to 23.3%.
Estonia’s brewery, Saku OlletehaSaku Olletehas, announced a solid 19% increased in its 2006 sales to EEK772mln and an impressive 57% increase in its 2006 net profit to EEK118mln. This growth was concurrent with an increase in market share. To reward the investors, the Company announced a proposed dividend of EUR1.60 per share. The share price leapt 7.1% to EUR15.85 on the news.
Further diversification for Kalev: Estonia’s confectionery, Kalev, announced that it has acquired the remaining 80% of Uniprint, a publishing house that prints advertisements, small publications, professional certificates and quality newspapers. The Company is paying EEK54.8mln for the publishing house, which, in 2006, earned a revenue of EEK75.2mln and profit of EEK2.3mln. The share price fell 3.6% to EUR1.35.
Merko Ehitus announced that the Company’s revenues rose by 36.6% to EUR282.1mln and net profit rose by 32.6% to EUR37.8mln. The Company also disclosed that the net profit margin rose from 9.0% to 10.2%, despite the rise in costs. The share price, though, fell by 1.2% to EUR23.38.
Tallinna Kaubamaja saw its share price fall 1.9% to EUR9.60 (before falling 8.6% over the entire week). This followed the announcement that the Company had increased its sales by 47% to EUR271mln and nearly tripled its net profit from EUR6mln in 2005 to EUR17mln in 2006.
- Apranga, Lithuania’s apparel retailer, will be announcing its preliminary 2006 results this week. It is estimated that the Company should show a net profit of LTL20.2mln for 2006 and a profit exceeding this amount may make the Company’s share attractive once more. Such a result would reduce the P/E from the current level of 30.1x to a more attractive and lower level of 26.9x
- It is believed that Estonia’s brewery, Saku Olletehas, presents an opportunity with its high proposed dividend payment. The Company has proposed a dividend this year of EUR1.60, which implies a current dividend yield of 10% (relative to the 6.7% dividend yield proposed in 2006). To merely equal last year’s proposed dividend yield, the share price must rise to EUR23.88. Shareholders listed on 19 April, 2007 will be eligible for the dividend.
- It is in our opinion that Kalev, Estonia’s confectionery, may be over diversifying with its recent 100% acquisition of the publishing company and the acquisition of the TV production company. Further, it is believed that the price of EEK54.8mln for the publishing company, which generates a net profit of EEK2.3mln, may be
slightly high.
- Although the initial reaction to the 2006 results of Merko Ehitus, Estonia’s construction company, have not been positive, it is believed that the share price is currently attractive. The preliminary results reduce the Company’s P/E from 17.2x to 11.1x. The 32.6% increase in net profit has also resulted in the share price
appearing to be relatively cheaper than that of Eesti Ehitus, which historically has been cheaper than Merko Ehitus.
Last week events and facts
Lithuania’s Limarko Laivininkyste Kompanija, a shipping company, Zemaitijos Pienas, a dairy company, and Lietuvos Elektrine, a power plant, announced their preliminary results.
Limarko Laivininkyste Kompanija announced sales of LTL115.7mln (which it projects will increase to LTL140.7mln in 2007) and net profit of LTL11.7mln (which it projects will remain constant in 2007). The share price fell by 6.1% to LTL1.54 on the news. Similarly, the share price of Zemaitijos Pienas, fell after it announced a 18.1% rise in its sales and a 39.3% rise in its net profit. The share price fell by 0.4% to LTL25.50.
Lietuvos Elekrtine, though, marginally gained support by its investors when it announced that it had increased its revenues and net profit from LTL205.3mln and LTL17.2mln in 2005, respectively, to LTL264.1mln and LTL25.0mln in 2006, respectively.
Estonia’s entertainment group, Olympic Entertainment Group, construction company, Merko Ehitus, and department store, Tallinna Kaubamaja, all experienced declines on the announcement of their 2006 results.
The share price of Olympic Entertainment Group fell 3.2% to EUR10.50 after the Company announced a revenue for 2006 of EEK1,669.2mln (up 89.7%) and net profit of EEK388.3mln (up 87.5%). The best growth was experienced in Latvia (320.1%) and Ukraine (199.3%). The net profit margin, though, has declined marginally from 23.5% to 23.3%.
Estonia’s brewery, Saku OlletehaSaku Olletehas, announced a solid 19% increased in its 2006 sales to EEK772mln and an impressive 57% increase in its 2006 net profit to EEK118mln. This growth was concurrent with an increase in market share. To reward the investors, the Company announced a proposed dividend of EUR1.60 per share. The share price leapt 7.1% to EUR15.85 on the news.
Further diversification for Kalev: Estonia’s confectionery, Kalev, announced that it has acquired the remaining 80% of Uniprint, a publishing house that prints advertisements, small publications, professional certificates and quality newspapers. The Company is paying EEK54.8mln for the publishing house, which, in 2006, earned a revenue of EEK75.2mln and profit of EEK2.3mln. The share price fell 3.6% to EUR1.35.
Merko Ehitus announced that the Company’s revenues rose by 36.6% to EUR282.1mln and net profit rose by 32.6% to EUR37.8mln. The Company also disclosed that the net profit margin rose from 9.0% to 10.2%, despite the rise in costs. The share price, though, fell by 1.2% to EUR23.38.
Tallinna Kaubamaja saw its share price fall 1.9% to EUR9.60 (before falling 8.6% over the entire week). This followed the announcement that the Company had increased its sales by 47% to EUR271mln and nearly tripled its net profit from EUR6mln in 2005 to EUR17mln in 2006.