Končar Records Revenue Growth in the Third Quarter, Sales Revenue Increased by 26.4 Percent

Končar, the largest Croatian exporter and regional leader in the electrical engineering sector, achieved an increase in revenue from the sale of products and services of 635.9 million kuna in the third quarter, which is 26.4 percent higher compared to the same period in the record year 2021, as stated in the announcement.

Of this, as much as 61.1 percent of revenue was generated in foreign markets, while there was also an increase in newly contracted jobs and orders, which instills optimism for the upcoming period. Along with excellent results in the commercial part of the business, good financial results were also achieved, with the consolidated net profit of Končar’s companies amounting to 277.3 million kuna, which is an increase of 123.9 million kuna or 80.7 percent compared to the same period last year.

Despite unprecedented global challenges and uncertainties in world markets, the Končar Group ended the third quarter of 2022 with very good business results, primarily reflected in increased revenue, a significantly increased number of new orders, higher net profit, and achieved EBITDA indicators.

With the inclusion of Dalekovod, sales revenue increased by 524.3 million kuna, totaling 3,562.7 million kuna.

Furthermore, in the domestic market, Končar’s companies achieved revenues of 1,184.2 million kuna, which is 268.1 million kuna or 29.3 percent higher compared to the same period last year, while the share of the domestic market in total revenue from the sale of products and services amounts to 38.9 percent.

When it comes to exports, the backbone of Končar’s business, the most significant results were achieved in the German market, amounting to 332.7 million kuna, which represents an increase of 40.0 million kuna compared to the same period last year. Goods and services worth 238.8 million kuna were exported to Sweden, and 95.7 million kuna to Austria.

Additionally, in the European Union market, exports increased by 215.9 million kuna, totaling 1,343.4 million kuna, representing 72.1 percent of total exports achieved. In the period from January to September 2022, there was also a significant increase in contracted jobs in foreign markets, creating conditions for further export growth in the upcoming period. Specifically, new jobs worth 3,993.0 million kuna were contracted.

The ratio of contracted to realized jobs, book-to-bill ratio, remains high at 1.31, while the backlog at the end of September amounts to 5,955.0 million kuna, which is an increase of 946.4 million kuna or 18.9 percent compared to the end of 2021. With the inclusion of Dalekovod, the backlog further increased by 1 billion kuna, totaling 6,971.7 million kuna for the Končar Group.

Finally, EBITDA amounts to 373.7 million kuna, which is an increase of 144.8 million kuna compared to the results in the first three quarters of 2021. The EBITDA margin is 12.3 percent, while it was 9.5 percent in the same period last year. Normalized EBITDA amounts to 219.5 million kuna, which is an increase of 26.2 million kuna compared to the period from January to September 2021. The normalized EBITDA margin is 7.2 percent. With the inclusion of Dalekovod, EBITDA increased by 24.6 million kuna, totaling 398.3 million kuna.

The achieved results are a continuation of the positive business trend despite all the negative and complex macroeconomic conditions that have accompanied business operations over the past three years, says Gordan Kolak, President of the Management Board of Končar.

– The war in Ukraine and economic sanctions against Russia have compounded the still-present disruptions in supply chains. In such an uncertain environment, the management of the Končar Group had to react quickly and organize business activities as efficiently as possible to absorb such an extreme shock to operations, unprecedented in the last few decades.

The growth of newly contracted jobs and the state of orders are indicators that instill optimism that we will achieve good results in the upcoming period as well. Therefore, although in conditions of significantly narrowed forecasting possibilities, we expect that Končar will end the business year in line with planned results. In the next year, the priority is to maintain focus on export markets and the trend of business growth along with increased profitability, and to continue with a significant investment cycle that began this year, emphasizes Kolak.