Opus did good business with the energy sector, the newest branch of business is bringing good results

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By RockedBuzz 33 Min Read

The main impacts in 2022

The defining strategic objective of the year 2022 has been achieved, after the construction of the energy segment in 2021, its integration was successfully completed – is stated in the annual report of Opus. Today, the group’s energy portfolio is one of the domestic energy providers with the largest geographic coverage, the service area covers a total of 40 percent of Hungary: Opus Tigáz supplies gas to 1.26 million users in seven counties, while Opus Titász supplies electricity to 782,000 customers in three counties. .

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Among the strategic segments, the situation of the tourism business was made more difficult by the energy price shock and rising inflation. In the construction industry, the order book remained balanced and although there were delays in project completions and with suppliers, the profit-generating capacity of the companies under the business remained and they are solid dividend payers for the company group – Opus Global summarized the main effects of last year.

The fourth quarter

Opus Global increased its operating income by more than 50 percent in the fourth quarter of 2022 compared to the same period of the previous year, according to the company’s annual report. The company reported double-digit growth at the EBITDA level, which is the most characteristic of the company’s operations, although the expansion lagged behind the rate of revenue growth, it increased by 19 percent. The after-tax result and the comprehensive result, on the other hand, halved from the level of a year earlier.

Quarterly evolution of the main profit lines (HUF billion)
4Q 214Q 22change (year/year)
total operating income119.0183.254.0%
EBITDA18.822.419.1%
EBITDA margin15.8%12.2%-3.6pp
profit after tax17.98.2-53.9%
total comprehensive income18.07,8-56.4%
Source: Opus, Portfolio

Among the strategy segments industrial production achieved outstanding income growth, in the fourth quarter, the operating income of the business increased by nearly 60 percent on a year-on-year basis. Tourism and energy were able to increase their income by a third, while the income of agriculture and the food industry jumped by 47 percent.

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However, at the EBITDA level, industrial production suffered a significant decrease, the result fell to a third, and tourism ended the period with a loss. The agriculture and food industry posted a profit of nearly HUF 2.9 billion compared to the loss in the base period. Energy, which is the group’s main profit driver in the fourth quarter at the EBITDA level, was the largest profit-producing segment Also in the fourth quarter of 2022, and ended the period with a result of over HUF 13 billion, similar to the level of a year ago.

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Annual numbers

Consolidated financial data of the company group base year comparability point of view, it is important to note that in the consolidated profit and loss account, the acquisition of the energy supply companies took place in the reporting period of 2021, so the acquisition of Opus Tigáz Zrt. was completed on March 31, and of Opus Titász Zrt. on August 31, so in the case of these companies In 2021, the 9-month result of the gas distribution activity, while the 4-month result of the electricity distribution activity, was included in the consolidated result of the Opus Group.

Annual evolution of the main results (billion HUF)
20212022change (year/year)
total operating income307.9535.373.9%
EBITDA45.374.464.4%
EBITDA margin14.7%13.9%-0.8pp
EBIT17.134.199.1%
EBIT margin5.6%6.4%+0.8pp
profit after tax41.722.2-46.6%
total comprehensive income41.622.5-45.8%
Source: Opus, Portfolio

In 2022 it is total operating income increased by 74 percent at the company group. Among the strategic segments, the industrial production segment gave the largest share, 39 percent, energy accounted for 29 percent, and agriculture and food industry 26 percent. The tourism segment, which fluctuated during the coronavirus epidemic, contributed only 6 percent of the operating income in the closed year.

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EBITDA increased by 64 percent, while operating profit almost doubled compared to 2021.

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THE operational costs among them, the material expenditures with the greatest weight increased the most, by nearly 80 percent. Personal expenses increased by 45 percent and depreciation by 43 percent from the previous year. The increase in personnel expenses was primarily caused by the increase in the wage level, and to a lesser extent by the increase in the number of employees, the annual report reads. In its consolidated books, the group accounts for two significant depreciation items compared to the individual books of the companies: the first item is the contract portfolios identified during the acquisition of companies belonging to the construction industry segment, while the other is the depreciation accounted for after correcting the fair value of distribution assets related to the acquisition of energy companies.

The after-tax result was worsened by the HUF 3.3 billion loss recorded in the financial result line in 2022, compared to the positive result of HUF 28.7 billion in the base period.

Compared to last year, the significant decrease is partly due to increased interest expenses, and partly to the fact that Opus Global accounted for about HUF 30 billion in badwill in 2021 in connection with energy acquisitions.

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As a result of the financial line’s much weaker result than last year, the after-tax result and the total comprehensive income decreased significantly, falling to HUF 22 billion, which is half of the level of a year earlier.

Among the segments, energy grew dynamically in 2022, which can also be attributed to the development of the division, since the results of Tigáz and Titász, which were 100 percent consolidated for last year, were not included in the 2021 figures. Agriculture and the food industry, as well as tourism, which was still affected by the coronavirus epidemic in 2021, recorded a significant increase in income in 2022 (66 percent and 73 percent), while the income of the industrial production segment increased by 37 percent.

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At the EBITDA level, energy contributed the most to growth, as well as agriculture and the food industry, which closed with a result of HUF 11 billion in 2022 after the previous year’s loss. The EBITDA of the tourism business stagnated, while industrial production registered a moderate, 11 percent decrease.

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The industrial segment the ongoing Russo-Ukrainian war has a significant impact on the activities of his companies, construction materials have become extremely expensive, the runaway energy prices, inflation and the associated wage spiral make management difficult, the deadlines for construction projects are delayed in several cases due to disruptions in supply chains and lack of raw materials.

THE agricultural and food industry segment Among the impacts, it can be highlighted that the year 2022 began and continued with a significant rainfall deficit, so that by the end of the first semester there were already signs of a significant drought, which significantly reduced the growth of field crops, autumn and then spring sowings. The drastic increase in the prices of input materials (fertilizer, pesticides, seeds) and energy prices caused significant difficulties both for crop growers in the field and, through feed prices, for animal breeders as well. The Russo-Ukrainian war constantly carries a high risk for producers, it is questionable how much damage the grain production of Ukraine – as a major grain exporter – will suffer, and to what extent the clear decrease in output will cause a price increase on the international and domestic markets.

THE tourism segment was characterized by the recovery from the coronavirus epidemic, but the business sector is also negatively affected by the rise in energy prices and soaring inflation. From the end of February 2022, the Russian-Ukrainian war initially reduced the willingness to travel, in several cases it led to cancellations for Western European tourist groups, and it also temporarily had a perceptible effect on the willingness of domestic guests to book. As for the outlook, the company expects significant domestic tourism as a result of increased fuel prices and volatile exchange rates.

The with energy segment In connection with this, the annual report of Opus mentions that in 2022 the Russian-Ukrainian war brought huge fluctuations and a significant price increase in the energy sector throughout the year.

The main balance sheets

The balance sheet total increased compared to 2021, which is largely the result of organic growth, as no significant business share acquisitions took place in 2022 – can be read in the quick report. Observing the distribution within the liabilities, a shift can be seen, while at the end of 2021, the company group’s liabilities were 64 percent long-term and 36 percent short-term, until the end of 2022, the short-term liabilities increased by 60 percent, while the long-term liabilities remained at roughly the same level. This was due to the increase in advances received in connection with the construction industry.

Changes in the main balance sheet lines at Opus (billion forints)
201720182019202020212022change
Funds5.198.679.4127.8133.7174.230%
Long-term liabilities18.9111.7147.8172.1370.9373.71%
Short-term liabilities14.2184.6210.9160.4204.2325.659%
Equity15.0280.4287.6227.6314.5343.39%
Balance sheet total48.1576.7646.2560.1889.51,042.617%
Source: Opus, Portfolio

The company group’s loan portfolio decreased slightly and the distribution of short-term and long-term loans did not change compared to the level of a year earlier. Within the group, the agricultural and food segment accounts for the largest proportion of the loan stock, nearly half of the loans, while the second largest weight is given to the energy segment.

Funds increased significantly by 30 percent by the end of 2022 compared to 2021.

The exchange rate

Of the shares of Opus Global its exchange rate has decreased over the past yearwhich is a weak performance compared to the Hungarian market, because BUX is currently almost at the level of a year ago.

Development of the Opus exchange rate

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