In its first quarterly report of the year, Waberer’s detailed a significant increase in revenue but faced a nearly 90% decline in taxed earnings. The company’s management insisted that the quarterly performance was in line with expectations, and no adjustments to the annual forecast are planned.
Waberer’s latest numbers show that revenue rose by 11.3% in the first quarter to EUR 196.7 million compared to the same period in 2023, setting a new quarterly record for the company. However, EBIT fell significantly, with a 24.1% decrease compared to the same quarter last year.
While the contract logistics and insurance segment saw an improved performance, the international transport and freight forwarding segment’s EUR 2 mln loss significantly worsened the results.
The decline in EBIT can partly be attributed to decreased industrial production volumes in key markets such as Germany, Italy, and Hungary at the beginning of the year. Additionally, retail also performed weakly on both international and Hungarian levels. Significant increases in road tolls in several countries relevant to transportation also contributed to the EBIT decline.
However, the company expects significant improvements in the international transport and freight forwarding segment in the second half of the year, which could positively influence the group’s results.
“The Waberer’s Group has been through a significant quarter in terms of strategy execution. We closed acquisitions aligned with our defined growth directions [PSP Group and MDI], started developing a new logistics center in Debrecen, and are in the final stages of constructing our warehouse in Ecser,” commented Zsolt Barna, president and CEO of Waberer’s.
“We initiated an ESO [Employee Stock Ownership] program; thus, the company group’s upper and middle management became directly interested in the stock price changes. Based on approval at the general meeting, our company will pay a dividend of HUF 120 per share, 20% higher than last year, and now three analysts (Concorde, Equilor, MBH) are also following Waberer’s stock, thus providing credible and independent information to current and potential investors,” he added.
Waberer’s net quarterly result was EUR 1.1 mln, representing a decrease of EUR 9.3 mln, or 89.5%. The decline was blamed on the lower EBIT and the unrealized non-cash foreign exchange effects resulting from the weakening of the forint against the euro, which resulted in a EUR 3.9 mln decrease compared to the first quarter of 2023.
Additionally, there was higher latent tax and lower interest income available on a lower cash balance due to investments and acquisitions, which together resulted in a EUR 2.7 mln decrease.
Q1 revenues in the contract logistics segment (RCL) increased by 16.9% to EUR 58.5 mln, transport and freight forwarding rose by 6.4% to EUR 118.4 mln, and the insurance sector was up by 21.4% to EUR 23 mln, year-on-year.
The revenue growth in the RCL line was due to the impact of price increases and the effect of new projects that started at the end of last year and the beginning of 2024, affecting transportation, warehousing, and manufacturing support logistics activities.
The growth in transport and freight forwarding was attributed to the expansion of subcontracted services, representing a lower business risk, while revenue from own fleet transportation activities did not change.
Revenue in the insurance segment, calculated in forints, increased by 21.3% and is primarily due to the growth of the contractual portfolio.
The company group’s EBITDA reached EUR 22.1 mln in Q1, a decrease of EUR 1.5 mln, or 6.4%. The growth in the RCL and insurance segments could not offset the EUR 2.4 mln EBITDA fall in the ITS segment.
A similar situation is apparent at the EBIT level; RCL improved 14.8% to EUR 4.6 mln. The core activity maintained its profitability despite stagnant domestic consumer demand. The acquisition of the Serbian MD International was closed at the end of the quarter, and its results will appear in the group figures from Q2 on.
The EBIT result was minus EUR 2 mln, a y.o.y. weakening of EUR 3.8 mln. At the beginning of the first quarter of 2024, Waberer’s closed the acquisition of the rail logistics firm PSP Group. The proportionate EBIT consolidation of the ownership stake (51%) improved the segment’s EBIT performance by EUR 0.3 mln.
The insurance segment’s EBIT increased by EUR 0.5 mln, reaching EUR 5.9 mln with an EBIT margin of 25.8%. This is primarily due to high investment results, and the insurance client portfolio also grew by 15% over the past year. This is expected to expand further thanks to recent strategic sales agreements that have been concluded.
The company’s consolidated revenue is expected to approach EUR 800 mln this year, compared to EUR 711 mln in 2023. EBIT is expected to exceed EUR 40 mln, similar to last year.
Szabolcs Tóth, Waberer’s deputy CEO for economics and strategy, stated that profitability is likely to remain lower compared to the base period in the second quarter, but growth is expected in Q3 and Q4. He said that the drastic increases in road tolls (which burdened the ITS segment in the first quarter) could be incorporated into annual contracts later; additionally, European industrial production and Hungarian consumption may stabilize in the second half of the year.
“While Waberer’s has been through a volatile period characterized by market pressure, I am pleased to report that this was followed by a very active negotiation period. In the last quarter of last year and the first months of this year, Waberer’s participated in tenders that closed in March-April, and the company group performed well. We can ensure in terms of price and volumes for the second half of the year that our international segment will again generate results. In the segments with higher added value, which play a key role in our strategy, we achieved further victories,” said Tóth.
He also mentioned that operations can begin in the new Ecser warehouse complex this summer, so the impact on results will be visible from August to September. Preparation for a Debrecen warehouse development is also underway, with the site next to the BMW factory paid for in the first quarter. The warehouse could be handed over in the second half of next year, Tóth said.
This article was first published in the Budapest Business Journal print issue of May 31, 2024.
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