Goldring: "The budgets of BET companies reflect their visions in a changing economic landscape"

The budgets for this year of the companies that are part of the BET index are not just a simple accounting exercise, but a reflection of their strategies and visions in a constantly changing economic landscape, according to a report of the Department of Analysis and Strategies of Goldring Brokerage Market.

"From a macroeconomic point of view, the outlook is generally optimistic, with moderate economic growth and some imminent risks. The main threats that could influence Romania's economic course in 2024 are related to the uncertain geopolitical context and financial market fluctuations. The conflict in Ukraine has created significant uncertainties and may further negatively affect the economy through lower exports, higher inflation and instability in financial markets. Measures to increase interest rates, taken to counter inflation, can negatively influence investment and consumption, reducing the pace of economic growth. Also, domestic political instability could dampen investor confidence and delay the implementation of necessary reforms, jeopardizing long-term growth potential," the report said.

According to Goldring analysts, TeraPlast stands out in the top of the budget figures for 2024, with its goal of having a significant increase both in terms of turnover and net result.

"Also, Fondul Proprietatea and MedLife are directing their efforts towards achieving a positive net result, aiming to return to favorable ground after the significant losses recorded in the previous year," the document states.

OMV Petrom, a major player in the energy field, has set a target of 33.34 billion lei in turnover, reflecting a modest 1% increase over the previous year. On the other hand, regarding the net result, the company aims to register a substantial advance, with an increase of 31% compared to 2023. "On the other hand, other companies, such as Nuclearelectrica and Hidroelectrica, have adopted more conservative approaches, reflecting changes in the energy mix and other factors specific to the sector", say the analysts.

About Romgaz, the Goldring team shows that the individual budgeted net profit is 2.57 billion lei for 2024, representing a moderate increase of 2.4% compared to 2023.

"The evolution of natural gas prices, production volume and future investments will be important factors that will influence the company's profitability," the report states. "Out of the total investment budget, the sum of 3.29 billion lei, equivalent to 70%, will be allocated to finance the subsidiary Romgaz Black Sea Ltd., which owns 50% of the deep-sea gas perimeter Neptun Deep".

Transelectrica estimates that total revenues for the current year will reach the amount of 5.3 billion lei, representing a potential increase of 14.21% compared to the preliminary results. "The increase in operating income is due to the combination of the 1.24% increase in the amount of energy estimated to be delivered to consumers, but also due to the tariffs for the transport service and the system approved by ANRE, increasing by 4.1%, respectively 32.7% compared to the weighted average prices recorded during 2023. For the years 2025 and 2026, it is predicted that the revenues will reach five billion lei. In terms of profitability, the company's management predicts a decrease of the net result, of approximately 33%, compared to the preliminary results, following the same trend in the year 2025", the report states.

BRD-Groupe Societe Generale proposes a moderate increase in net banking income, mainly determined by the increase in net interest income. "Banking expenses will be influenced by the introduction of the new 2% turnover tax, inflation and investments in information technology, but these will be mitigated by increased operational efficiency. The average loan balance is expected to grow by around 7%, while the deposit advance is expected to be 2%," the report said.

Related to Sphera Franchise Group, the Goldring team shows that total revenues are estimated to increase by 12.2% compared to the previous year (up to almost 1.65 billion lei), a phenomenon fueled both by the increase in revenues from comparable restaurants and sales expansion in new opened units.

"Also, a significant increase in traditional sales channels is anticipated, reaching 83% of total sales in 2024, in parallel, sales through delivery channels will represent approximately 17% of total sales. In addition, the opening of six KFC restaurants in Romania, investments in the renovation of restaurants and the implementation of digital ordering solutions, such as digital kiosks, are being considered," according to the document.

Other companies whose Income and Expenditure Budgets were exposed by the Goldring team in the report are: Transgaz, Electrica, Conpet, Bursa de Valori Bucharest, One United Properties, Aquila and Transport Trade Services.