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.
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.
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 2016||31 December 2015||31 December 2014|
|Debt and financing ratios|
|Net debt / EBITDA||1), 2)||(1,1)||(0,6)||(1,0)|
|Debt to equity||3)||33,1%||34,3%||35,2%|
|Coverage of interest on bonds||5)||24,3||23,5||17,0|
|Operating profit margin||7)||50,8%||46,8%||41,7%|
|Net profit margin||8)||42,2%||37,1%||33,8%|
|Cost / income||9)||48,3%||53,2%||57,2%|