RAIFFEISEN BANK S.A.

  |  2013-02-15

Romanian Daily Report - February 15

Romania's real GDP expanded by 0.2% qoq in 4Q 2012, above market consensus; Transelectrica - 2012 results close to expectations; Banca Carpatica’s 4Q 12 net profit surging

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Romania's real GDP expanded by 0.2% qoq in 4Q 2012, above market consensus
Romania’s real GDP expanded by 0.2% qoq seasonally adjusted in 4Q 2012, above the market consensus, which was expecting a marginal contraction (-0.1%). This was only a flash estimate, while detailed GDP data will be announced on 6 March. During 2012, economic activity expanded by merely 0.2% as a poor agricultural output took its toll on economic activity. This comes after 2.2% growth in 2011.

 

Transelectrica - 2012 results close to expectations (neutral)
Transelectrica reported its preliminary 2012 IFRS results, stand-alone. The figures are thus not fully comparable with the quarterly results prepared according to local standards or with our figures. We computed the 4Q results by deducting the 1-3Q results under local standards from the reported 2012 figures.
Quantities transported for the quarter reached 13.8 TWh, 2.7% lower yoy and 1.4% higher than our estimate. Costs were not adjusted for the drop in quantities so the operating profit was negative at RON 14.4 mn. Some of the losses recorded at the end of 3Q from the revaluation of the FX denominated debt reversed due to RON appreciation over 4Q. Overall the company recorded a minor net profit of RON 7.8 mn.
Over 2012, quantities transported dropped by 3.8% yoy and the net profit stand-alone under IFRS reached RON 27 mn, compared with RON 114 mn in 2011.
We had adjusted our estimates to include RON 56.3 mn revenues and net profit recognised in 1H under IFRIC 18 from the commissioned investments for connection to the grid subsidized by third parties. However, the company did not apply this policy and will recognize these revenues over the life of the asset (similar to the policy applied so far under Romanian Accounting Standards). This distorts the comparison to our estimates. If we take out the RON 56 mn the results are relatively close to our expectations. So we see the results as neutral.
It is not clear at the moment what would be the profit used for the payment of dividends, but if it will be the presented profit, using the dividend pay-out ratio of 85% required by the state, the dividend would come close to RON 0.313, providing a dividend yield of 2.2%. Other options would be to use the consolidated results or the figures prepared for fiscal authorities, but we do not expect large discrepancies.

 

Banca Carpatica’s 4Q 12 net profit surging
Banca Carpatica’s (BCC) assets have increased 10% qoq in 4Q 12 to RON 4.7 bn, driven by a 15% qoq jump in AFS portfolio while net loans contracted 3% qoq. Securities portfolio has now a weight of 55% in total balance sheet. As 2012 was the first year when quarterly figures are reported under IFRS, BCC has not published the 2011 quarterly results under IFRS and therefore, we are not able to comment on the quarterly evolution. NII for FY 2012 stood at RON 84.6 mn, up 30% yoy, driven by interest revenues from T-bills portfolio. NIM for the year seems very low at 2.2%. Annual F&C amounted to RON 36.3 mn, up 35% yoy while trading and gains from AFS portfolio amounted to RON 92 mn, up 42% yoy. Non-interest expenses jumped 35% yoy to RON 152 mn, driven by salaries and general expenses and C/I ratio remains constant at around 71%. Provision charges came in at RON 49 mn, 62% yoy higher, implying a risk cost of around 420 bps. Net profit for the year stood at RON 25 mn, swinging from a loss of RON 32 mn, a year ago. Net profit for the quarter stood at RON 12 mn.

 

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