Adris’ companies recorded double-digit growth, dividend HRK 17.5, strong investment cycle continues

The General Assembly of Adris grupa held today in Rovinj completed the annual general Assemblys of companies within the Group. General Assemblys of Maistra, Cromaris and Hilton Imperial also took place during the day, while Croatia osiguranje held its General Assembly on Tuesday, 19 June. 

While presenting last year’s business results and the business plan for this year, President of the Management Board of Adris grupa, Ante Vlahovic MSc referred to the socio-economic, legal-political and psychological circumstances in which we live and do business. He pointed out that, in the circumstances of decreased  competitiveness, lack of necessary structural reforms and general negative attitude towards entrepreneurship, Adris continued with strategic moves at Group level after the completed system transformation.

The key event that will, as he pointed out, contribute to further growth and development of Adris is the decision to purchase and the signing of the agreement on the purchase and sale of share and strategic partnership with HUP Zagreb. By preparing the acquisition in late 2017 and formally completing it in the first part of 2018, Adris grupa continued with its strategy of investments in the highest segment of the hotel offer. Preconditions for year-round operations and increase in operating, financial and other synergic effects have been created, through which Adris will strengthen its core business. By expanding its tourism portfolio to the growing Croatian destinations, one of the leading hotel companies has been created and is doing business in the most attractive tourist destinations in the country.

As reported by the company management, in 2017 Adris grupa recorded total revenue of HRK 5.54 billion. The operating revenue amounted to HRK 4.99 billion, while the revenue from the sale of goods and services amounted to HRK 4.37 billion. Revenue of HRK 3.03 billion was recorded on the Croatian market, and HRK 1.35 billion was recorded on foreign markets. Net profit amounts to HRK 374 million, with profit after minority interest amounting to HRK 293 million. This includes additional provisions based on exposure to Agrokor. Thus, the performed provisions amount to 60 percent of total receivables. In 2017 Adris’ companies achieved double-digit growth in net profit, that in total amounts to 33 percent.

In the continuation of the General Assembly, presidents of the management boards of Adris’ companies presented the achieved results in tourism, mariculture and insurance to the shareholders. 

Maistra achieved double-digit growth of key performance indicators

Former Adris’ investments in the highest segment of services and destination development, worth more than HRK 4 billion, along with further increase in efficiency, resulted in a double-digit growth in all key performance indicators of Maistra in 2017. 3.5 million overnight stays have been recorded, which is a ten-percent increase compared to the previous year, with an increase in the average price of overnight stay by five percent. The operating revenue amounts to 1.14 billion, up 13 percent from last year’s. EBITDA (earnings before interest, taxes, depreciation, and amortisation) amounts to HRK 400 million, up 21 percent. EBIT (earnings before interest and taxes) grew by 27 percent to HRK 229 million. Recorded net profit amounts to HRK 162 million, which is an increase of 14 percent compared to the previous year.

Investments in 2017 amounted to HRK 510 million. At the beginning of the year, the reconstruction of the accommodation part of the Eden hotel worth HRK 66 million was completed. Investments in campsites, worth almost HRK 200 million, which mostly concerned the development of infrastructure and raising the quality of  common facilities, were also completed. The renovation of the Hilton hotel in Dubrovnik started in late 2017. The newly renovated hotel was open once again in April this year. During 2017, works on the construction of the new Park hotel started. This hotel is the key product in the process of rounding up the top hotel offer in Rovinj and its completion is expected at the end of this year. Apart from investments in raising the quality of its own products Maistra is continuously working to increase the recognisability and shaping the tourist offer of Rovinj as a destination. In addition to other events, in May 2017 Maistra once again organised the prestigious international sporting event, the Beach Polo Tournament.

Low total indebtedness of the tourist part of the Group allows for the continuation of the investment cycle which is the foundation of further growth and development of the company. By 2021, additional HRK 2 billion will be invested in the tourist part of the Group, with which 95 percent of the hotel capacities will be at the highest level of the offer.  

Cromaris – further growth in export

During 2017, Cromaris continued to work on the internationalisation of its business and the premiumisation of its portfolio. An increase in export, which accounts for 77 percent of the sales revenue, an increase in the value-added products with the positioning in the highest price segment marked Cromaris’ business over the past year. During 2017, the sale of 7,334 tonnes was recorded, which is 6.5 percent more than in the same period last year. Quantitative sales in export markets grew by nine percent, but the business year was certainly marked by a 20 percent growth on the largest and most significant Italian market.

In the conditions of strong damping by the competition in key export markets, average prices grew by two percent. A growth in sold quantities and prices in 2017 was accompanied by a growth in sales by eight percent. At the same time, revenue from the sale of high value-added products, the key element of differentiation with regard to the competition, increased by as much as 43 percent. In line with the differentiation strategy, the objective in the next five years is to generate 45 percent of the revenue from value-added products. The growth of revenue, change in the sales structure and cost efficiency impact the strong growth in operating profit from regular business by 57 percent. Net profit amounted to HRK 23.1 million, up 76 percent from 2016.

The achieved business results are the consequence of Cromaris’ growth and development strategy based on top quality products with the shortest possible  period from the catch to the final consumer. The proximity of key markets and organisation of the logistics system enable products to reach the Italian, Slovenian and Croatian market within 24 hours, i.e. 48 hours from the catch to other key markets. The quality of the products, with continued investment in the development of the brand, keeps Cromaris in the position of premium products in Italy. In the category of fresh gilthead seabream and sea bass, the price is positioned around 20 percent above the reference market average.

Cromaris is on a stable path to reaching the economy of scale. Since its establishment in 2008, sales have increased almost seven times. Over the past ten years, around  HRK 900 million has been invested in Cromaris, which resulted in high rates of  growth in sales and revenue by an average of 23 percent a year. The economy of scale, with the development of brand and high value-added portfolio, is the basis of Cromaris’ viability and profitability, in which the company will invest another HRK 400 million over the next five years.

Croatia osiguranje – market leader

Croatia osiguranje once again maintained its leading position in the Croatian market in 2017, with a total share of 28.5 percent. It is the market leader in the segment of non-life insurance with 33.6 percent. It also maintained the leading position in life insurance, with a market share of 17.9 percent. Total gross written premium in the amount of HRK 2.62 billion was achieved in Croatia, which is two percent more than last year. Gross written premium at the Group level amounts to HRK 3.14 billion and is four percent higher than last year. The combined ratio from regular business, as one of the key indicators of business efficiency, has been slightly improved compared to last year’s and amounted to 96.7. These are the results of the successfully conducted organisational and process transformation of the business. During 2017, Croatia osiguranje carried out a number of activities aimed at increasing the business efficiency, especially in the field of sales network  improvement, the creation of a lean and efficient organisation, as well as the continuation of digitalisation of operations. Existing products have been improved and new ones have been designed and adapted to target groups of business users. The process of restructuring the corporate culture is also giving positive results. Measuring the “health of the organisation”, with the help of the so-called OHI index (Organizational Health Index) shows positive trends in all areas of business, and key moves were made in the field of ​​innovation and knowledge sharing, customer orientation and employee motivation. At the beginning of July 2017, Croatia zdravstveno osiguranje d.d. was merged, and at the end of September regulatory authorities approved the takeover of Cardif osiguranje. This continued the process of organisational and market consolidation. Stable and strong market position, high organisational and cost efficiency will enable long-term business sustainability. Potential sources of growth in the future are a combination of organic growth and acquisitions. New acquisitions are aimed at strengthening insurance business and  further development of the healthcare offer by using synergies with the insurance offer.

In 2017, CO group achieved profit before tax of HRK 304 million, which is an increase of 18 percent. Net profit amounted to HRK 254 million and was 45 percent higher than last year.

During the discussion on business results and plans of the company, questions were raised about the possibilities of expanding the insurance business in Slovenia, possible acquisitions, the operation of Cromaris, and the takeover of HUP Zagreb.

Growth in dividend, HRK 17.50 per share will be paid on 20 July 2018

In accordance with the published agenda, after the financial statements for 2017 were adopted at the General Assembly, a decision was made on the use of the profit from 2017.

When it comes to the dividend policy and further growth of the company’s value, President of the Management Board Ante Vlahovic MSc pointed out that, apart from the strengthening and growth in all businesses, Adris maintains a balanced dividend policy which enables further growth and development of the company. In the past five years, the dividend has grown by an average of 25 percent per year (without the extraordinary dividend).

Unlike the average of the companies in the Croatian market, the indebtedness ratio shows the Group’s high investment potential, which allows it to continue investing in growth and development of operations and the implementation of, as he said, the growing dividend policy of the company.

Ending his presentation on the plans of Adris, Vlahovic said: “In Croatia, success has never been associated with the prevailing Croatian mentality. We will continue to  invest, choose the best people and follow the best business practices. Instead of  mediocrity, Adris chooses excellence!”

Pursuant to the decision made at the General Assembly on the payment of dividend of HRK 17.5 per share, the amount of HRK 287 million of undistributed retained profit of the Company will be set aside for the payment of dividends. The dividend will be paid on 20 July 2018 to the accounts of the holders of shares according to the situation and the statement of the Central Depository and Clearing Company on 29 June 2018. The calculated amount of dividend on own shares will be retained in undistributed profit. 

Finally, clearances were given to members of the Management Board and Supervisory Board. 

• Adris grupa General Assembly presentation 27062018 PDF — 1.34 MB