Ratio analysis

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DEBT AND FINANCING RATIOS

In the period under review, the debt of the Group posed no threat to its going concern and capacity to meet liabilities on time. The ratio of net debt to EBITDA remained negative, the same as in 2015, due to negative net debt (cash exceeds interest-bearing liabilities), combined with an increase of EBITDA. The debt to equity ratio decreased year on year in 2016 due to an increase in equity. The Group did not raise additional borrowed capital in 2016 but GPW started to issue series D and E bonds. However, the issues were not registered and the debt under the bonds was not recognised until January 2017. On 2 January 2017, series A and B bonds were redeemed, and so the debt remained stable.

LIQUIDITY RATIOS

The current liquidity ratio was 2.1 as at 31 December 2016. The decrease was due to an increase in current liabilities following the reclassification of GPW’s liabilities under series A and B bonds to current liabilities (the bonds are due for redemption on 2 January 2017). However, the ratio remained safe.

The coverage ratio of interest costs under the bond issue increased in 2016 year on year mainly due to the Group’s higher EBITDA. Consequently, the Group generated cash flows from operating activities which were several times higher than necessary to cover current liabilities under the bond issue.

PROFITABILITY RATIOS

The profitability ratios improved year on year in 2016 driven by lower operating expenses, as reflected in the improving return and cost/income ratios as well as ROE and ROA of the Group.

Key financial indicators of GPW Group

  As at / For the 12-month period ended
  31 December 201631 December 201531 December 2014
     
Debt and financing ratios    
Net debt / EBITDA1), 2) (1,1) (0,6) (1,0)
Debt to equity3)33,1%34,3%35,2%
Liquidity ratios    
Current liquidity4) 2,1 4,9 4,7
Coverage of interest on bonds5) 24,3 23,5 17,0
Return ratios    
EBITDA margin6)59,1%54,9%50,7%
Operating profit margin7)50,8%46,8%41,7%
Net profit margin8)42,2%37,1%33,8%
Cost / income9)48,3%53,2%57,2%
ROE10)18,0%17,3%16,1%
ROA11)11,8%11,4%10,7%
[1] Net debt = interest-bearing liabilities less liquid assets of GPW Group (as at balance-sheet date)
[2] EBITDA = GPW Group operating profit + depreciation and amortisation (for a period of 12 months; net of the share of profit of associates)
[3] Debt to equity = interest-bearing liabilities / equity (as at balance-sheet date)
[4] Current liquidity = current assets / current liabilities (as at balance-sheet date)
[5] Coverage of interest on bonds = EBITDA / interest on bonds (interest paid and accrued for a period of 12 months)
[6] EBITDA margin = EBITDA / GPW Group revenue (for a period of 12 months)
[7] Operating profit margin = GPW Group operating profit / GPW Group revenue (for a period of 12 months)
[8] Net profit margin = GPW Group net profit / GPW Group revenue (for a period of 12 months)
[9] Cost / income = GPW Group operating expenses / GPW Group revenue (for a period of 12 months)
[10] ROE = GPW Group net profit (for a period of 12 months) / Average equity at the beginning and at the end of the last 12 month period
[11] ROA = GPW Group net profit (for a period of 12 months) / Average total assets at the beginning and at the end of the last 12 month period

Source: Company