Končar Group Revenues Amount to 601.1 Million Euros, Increased by 27.1 Percent

The largest Croatian net exporter, the KONČAR Group, is on the verge of its third consecutive record year, as confirmed by the business results in the first nine months of 2023, with a special emphasis on newly contracted jobs and the order book. Consolidated revenues from the sale of products and services amounted to 601.1 million euros, which is an increase of 128.2 million euros or 27.1 percent compared to the same period last year. In this amount, 67% comes from export revenues, which have increased by as much as 34% this year. High expectations are justified by the state of open orders, backlog, which has increased by 45% to a record 1,412.7 million euros.

All business segments of the KONČAR Group achieved revenue and profit growth, particularly the business segment of electricity transmission and distribution. In this area, KONČAR successfully maintains its status as a regional leader and strengthens its role as a relevant European manufacturer of high-tech products and solutions for implementing the green energy transition across the European Union. In addition to accounting for a high 67% of total sales revenue, export results have further grown in all markets, with the most significant revenue increase recorded in the European Union market, where exports increased by 60.1 million euros. Specifically, exports to EU countries amounted to 283.5 million euros or 70.2% of total exports achieved.

Excellent sales results have enabled further growth in KONČAR’s profitability, with the reported net profit for the first nine months of this year amounting to 48.3 million euros, which is 29.8% higher than last year’s achievement. Normalized net profit increased by 23.7 million euros and is more than double compared to the observed period from last year, with a total value of 40.4 million euros. Furthermore, normalized EBITDA amounts to 56.1 million euros and is higher by 23.8 million euros or 73.7% compared to the normalized EBITDA achieved in the first nine months of 2022. Additionally, the normalized EBITDA margin stands at 9.3%, while it was 6.8% in the same period last year.

– With excellent financial results, we are particularly pleased with the state of newly contracted jobs that have exceeded one billion euros, primarily in markets outside Croatia. The reliability and trust built over decades have secured us a record amount of new orders, especially in the demanding markets of Germany, Sweden, and Austria.

Strategic Investments

The state of open obligations, backlog, amounts to 1,412.7 million euros, with the amount of contracts that will generate revenue in the following year reaching 741 million euros by the end of September. The achieved progress is the result of changes and activities we have initiated over the past four years, with an emphasis on adapting to market trends and needs and investing in people, and by the end of the year, we expect revenues to exceed planned levels – emphasizes Mr. Gordan Kolak, President of the Management Board of KONČAR.

Among significant contracts concluded in the third quarter, KONČAR particularly highlights an important success on home soil, namely the contract for the procurement of new low-floor trams for the modernization of the tram fleet in Osijek with the City Transport of Passengers Osijek. The contract is worth 18.5 million euros and pertains to the delivery of the first 10 low-floor trams and was signed as part of the project Implementation of Green Technologies in Railway Passenger Transport from the National Recovery and Resilience Plan 2021 – 2026 (NPOO). Regarding exports, it should be noted that a larger portion of the tender has been secured in the competition among renowned European manufacturers of energy transformers for the German and Swedish branches of the E.ON Group, valued at 50 million euros.

At the meeting of the Supervisory Board and the Management of the Company held on October 31, in addition to accepting the business results for January – September 2023, the offer from Construction Line Limited (CL) for the purchase of shares in Advanced Energy Solutions Ltd. (NER), which owns 75.16% of the shares of Dalekovod, was also accepted. In line with KONČAR’s strategy of consolidating ownership and achieving control for the complete integration of the DALEKOVOD Group into the KONČAR Group, as well as the fact that KONČAR is primarily a strategic investor looking to leverage the potential synergies between the Groups, the purchase of shares in NER represents an opportunity for the KONČAR Group for further growth.