vk.com/id446425943
Acron – HOLD
Renaissance Capital
6 February 2019
Metals & Mining
Figure 102: Acron, RUBmn (unless otherwise noted)
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Acron |
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AKRN.MM |
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Target price, RUB: |
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4,600 |
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Market capitalisation, RUBmn: |
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189,569 |
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Share price, RUB: |
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4,670 |
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Enterprise value, RUBmn: |
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270,446 |
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Potential 12-month return: |
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5.4% |
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Dec-YE |
2016 |
2017 |
2018E |
2019E |
2020E |
Dec-YE |
2016 |
2017 |
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2018E |
2019E |
2020E |
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Income statement |
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Balance sheet |
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Revenue |
89,359 |
94,342 |
109,410 |
121,593 |
135,403 |
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Net operating assets |
142,971 |
154,536 |
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155,994 |
162,006 |
170,645 |
EBITDA |
29,856 |
29,817 |
38,228 |
44,623 |
50,511 |
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Investments, net of rehab provision |
-3,266 |
-3,359 |
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-2,394 |
-2,394 |
-2,394 |
Underlying EBIT |
23,761 |
21,860 |
28,936 |
34,642 |
39,589 |
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Equity |
67,156 |
70,300 |
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58,296 |
67,526 |
80,069 |
Other items |
-2,863 |
-683 |
-72 |
0 |
0 |
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Minority interest |
20,566 |
20,656 |
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20,668 |
20,904 |
21,180 |
Net interest |
3,814 |
-3,752 |
-8,156 |
-5,130 |
-5,190 |
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Net debt |
51,983 |
60,221 |
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74,636 |
71,182 |
67,003 |
Taxation |
-5,962 |
-3,500 |
-4,327 |
-5,902 |
-6,880 |
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Balance sheet ratios |
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Minority interest in profit |
630 |
-828 |
-718 |
-1,180 |
-1,376 |
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Net profit for the year |
26,155 |
13,432 |
13,748 |
22,429 |
26,143 |
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Gearing (net debt/(net debt+equity)) |
43.6% |
46.1% |
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56.1% |
51.3% |
45.6% |
Basic EPS, RUB |
656 |
339 |
350 |
571 |
666 |
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Net debt to EBITDA |
1.7x |
2.0x |
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2.0x |
1.6x |
1.3x |
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RoCE |
15.0% |
14.2% |
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18.0% |
20.9% |
22.9% |
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Thomson Reuters consensus EPS, RUB |
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394 |
484 |
534 |
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RoIC (after tax) |
13.1% |
11.1% |
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14.7% |
16.9% |
18.5% |
DPS declared, RUB |
335 |
330 |
337 |
336 |
346 |
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RoE |
34.4% |
19.5% |
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21.4% |
35.7% |
35.4% |
Thomson Reuters consensus DPS, RUB |
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312 |
325 |
352 |
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Cash flow statement |
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Income statement ratios |
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Operating cash flow |
28,116 |
23,004 |
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27,836 |
37,856 |
40,212 |
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EBITDA margin |
33% |
32% |
35% |
37% |
37% |
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Capex (net of disposals) |
-12,128 |
-11,299 |
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-14,531 |
-16,155 |
-17,180 |
EBIT margin |
27% |
23% |
26% |
28% |
29% |
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Other cash flows |
-5,812 |
-2,534 |
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-6,305 |
0 |
0 |
EPS Growth |
79% |
-48% |
3% |
63% |
17% |
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Free cash flow |
10,176 |
9,171 |
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7,000 |
21,701 |
23,033 |
Dividend payout ratio (previous year) |
91% |
50% |
99% |
96% |
61% |
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Equity shareholders' cash |
15,127 |
6,144 |
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-774 |
16,653 |
17,780 |
Input assumptions |
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Dividends and share buy-backs |
-13,787 |
-14,382 |
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-13,641 |
-13,200 |
-13,600 |
67 |
58 |
63 |
67 |
68 |
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Surplus (deficit) cash |
1,340 |
-8,238 |
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-14,415 |
3,453 |
4,180 |
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RUB/$ |
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Cash flow ratios |
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Black sea 16-16-16, $/t |
324 |
321 |
318 |
340 |
347 |
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Black sea ammonia, $/t |
235 |
271 |
293 |
303 |
322 |
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Working capital turnover, days |
45 |
54 |
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64 |
58 |
59 |
Baltic sea Urea granular, $/t |
202 |
220 |
251 |
263 |
269 |
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FCF yield |
4.8% |
4.2% |
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2.6% |
7.9% |
8.5% |
MOP Potash FOB Saskatchewan, $/t |
228 |
230 |
261 |
289 |
283 |
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Equity shareholders' yield |
10.7% |
4.5% |
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-0.4% |
9.1% |
9.7% |
Sales volumes, kt |
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Capex/EBITDA |
40.6% |
37.9% |
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38.0% |
36.2% |
34.0% |
339 |
260 |
270 |
414 |
584 |
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Cash conversion |
0.6x |
0.5x |
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-0.1x |
0.7x |
0.7x |
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Apetite |
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Valuation |
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Ammonia |
269 |
556 |
418 |
322 |
475 |
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Ammonium nitrate |
1,527 |
1,233 |
1,387 |
1,224 |
1,224 |
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DCF fair value and calculation of target price |
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RUBmn |
RUB/sh |
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Urea |
299 |
450 |
413 |
592 |
654 |
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Operating value |
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254,859 |
6,484 |
Urea-ammonium nitrate |
935 |
1,036 |
1,312 |
1,400 |
1,400 |
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Financial instruments and rehab provision as at 31 December 2017 |
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-3,359 |
-85 |
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NPK |
1,953 |
2,076 |
2,284 |
2,112 |
2,112 |
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Enterprise value |
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251,500 |
6,399 |
Bulk blends |
107 |
685 |
222 |
400 |
400 |
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Net debt as at 31 December 2017 |
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-60,221 |
-1,532 |
Industrial products |
923 |
984 |
1,031 |
1,025 |
1,025 |
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Minority interest |
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-20,656 |
-546 |
Total merchant sales |
6,352 |
7,279 |
7,336 |
7,488 |
7,874 |
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Cash used in share buy-backs during 2018E |
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-369 |
-9 |
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Volume growth |
13.4% |
14.6% |
0.8% |
2.1% |
5.2% |
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Market value of investment in Grupa Azoty |
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12,837 |
327 |
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Equity value |
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183,091 |
4,638 |
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Rounded to |
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4,600 |
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Share price on 1/2/2019 |
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4,670 |
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Expected share price return |
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-1.5% |
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Plus: expected dividend yield |
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6.9% |
Contribution to FY18E revenue |
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Total implied one-year return |
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5.4% |
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Trading |
Logistics and other |
Ammonia |
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Phosrock 4% |
Industrial products |
1% |
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8% |
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7% |
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1% |
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AN |
Bulk blends |
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3% |
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16% |
Urea
8%
NPK |
UAN |
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13% |
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39% |
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Share price range, RUB: |
4,817 |
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3,715 |
12-month high on 20-9-2018 |
12-month low on 10-4-2018 |
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Price move since high |
-3.1% |
Price move since low |
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25.7% |
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Calculation of WACC |
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WACC |
13.0% |
Cost of debt |
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7.0% |
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Risk-free rate |
7.0% |
Tax rate |
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20% |
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Equity risk premium |
6.0% |
After-tax cost of debt |
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1.1% |
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Beta |
1.30 |
Debt weighting |
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20% |
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Cost of equity |
14.8% |
Terminal growth rate |
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4.0% |
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Valuation ratios |
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Dec-YE, RUBmn |
2016 |
2017 |
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2018E |
2019E |
2020E |
P/E multiple |
5.4x |
10.1x |
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8.7x |
8.2x |
7.0x |
Dividend yield |
9.5% |
9.6% |
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7.7% |
7.2% |
7.4% |
EV/EBITDA |
7.1x |
7.2x |
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7.0x |
6.2x |
5.4x |
P/B |
2.1x |
1.9x |
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3.0x |
2.7x |
2.3x |
NAV per share, RUB |
1,687 |
1,785 |
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1,483 |
1,718 |
2,037 |
NAV per share, USc |
2,518 |
3,060 |
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2,363 |
2,564 |
2,996 |
Source: Bloomberg, Thomson Reuters, Company data, Renaissance Capital estimates
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