New Risk • Jun 17
New major risk - Market cap size The company's market capitalization is less than US$10m. Market cap: zł26.2m (US$7.07m) This is considered a major risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Share price has been highly volatile over the past 3 months (39% average weekly change). Negative equity (-zł1.4b). Earnings have declined by 18% per year over the past 5 years. Revenue is less than US$1m. Market cap is less than US$10m (zł26.2m market cap, or US$7.07m). New Risk • Jun 09
New major risk - Financial position The company has less than a year of cash runway based on its current free cash flow trend. Free cash flow: -zł43m This is considered a major risk. With less than a year's worth of cash, the company will need to raise capital or take on debt unless its cash flows improve. This would dilute existing shareholders or increase balance sheet risk. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-zł43m free cash flow). Share price has been highly volatile over the past 3 months (38% average weekly change). Negative equity (-zł1.4b). Earnings have declined by 6.7% per year over the past 5 years. Revenue is less than US$1m. Minor Risk Market cap is less than US$100m (zł112.7m market cap, or US$30.0m). New Risk • May 05
New major risk - Revenue and earnings growth Earnings have declined by 6.7% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-zł43m free cash flow). Share price has been highly volatile over the past 3 months (38% average weekly change). Negative equity (-zł1.4b). Earnings have declined by 6.7% per year over the past 5 years. Revenue is less than US$1m. Minor Risk Market cap is less than US$100m (zł221.2m market cap, or US$58.5m). New Risk • Dec 19
New major risk - Market cap size The company's market capitalization is less than US$10m. Market cap: zł24.2m (US$5.89m) This is considered a major risk. Companies with a small market capitalization are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-zł68m free cash flow). Share price has been highly volatile over the past 3 months (31% average weekly change). Negative equity (-zł1.2b). Revenue is less than US$1m. Market cap is less than US$10m (zł24.2m market cap, or US$5.89m). New Risk • Nov 24
New major risk - Revenue size The company makes less than US$1m in revenue. This is considered a major risk. Companies with a small amount of revenue are most likely businesses that have not yet released a product to market or are simply a very small company without a wide reach. Either way, risk is elevated with these companies because there is a chance the product may not come to fruition or the company's addressable market or demand may not be as large as expected. In addition, if the company's size is the main factor, it is less likely to have many investors and analysts following it and scrutinizing its performance and outlook. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-zł68m free cash flow). Share price has been highly volatile over the past 3 months (17% average weekly change). Negative equity (-zł1.2b). Revenue is less than US$1m. Minor Risk Market cap is less than US$100m (zł43.5m market cap, or US$10.5m). Reported Earnings • Oct 01
Second quarter 2024 earnings released: zł1.68 loss per share (vs zł0.03 profit in 2Q 2023) Second quarter 2024 results: zł1.68 loss per share (down from zł0.03 profit in 2Q 2023). Revenue: zł6.92m (down 90% from 2Q 2023). Net loss: zł271.3m (down zł276.2m from profit in 2Q 2023). Over the last 3 years on average, the company's share price growth rate has exceeded its earnings growth rate by 42 percentage points per year, which is a significant difference in performance. New Risk • Jun 14
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Polish stocks, typically moving 6.9% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-zł73m free cash flow). Negative equity (-zł553m). Minor Risks Share price has been volatile over the past 3 months (6.9% average weekly change). Market cap is less than US$100m (zł158.4m market cap, or US$38.7m). Announcement • May 31
Rafako S.A., Annual General Meeting, Jun 25, 2024 Rafako S.A., Annual General Meeting, Jun 25, 2024. Reported Earnings • May 04
Full year 2023 earnings released: zł1.88 loss per share (vs zł0.30 loss in FY 2022) Full year 2023 results: zł1.88 loss per share (further deteriorated from zł0.30 loss in FY 2022). Revenue: zł335.2m (up 26% from FY 2022). Net loss: zł302.0m (loss widened zł253.6m from FY 2022). Over the last 3 years on average, earnings per share has fallen by 7% per year whereas the company’s share price has fallen by 8% per year. Reported Earnings • Nov 24
Third quarter 2023 earnings released: zł0.27 loss per share (vs zł0.009 loss in 3Q 2022) Third quarter 2023 results: zł0.27 loss per share (further deteriorated from zł0.009 loss in 3Q 2022). Revenue: zł81.6m (down 30% from 3Q 2022). Net loss: zł42.7m (loss widened zł41.3m from 3Q 2022). Over the last 3 years on average, earnings per share has increased by 31% per year but the company’s share price has fallen by 6% per year, which means it is significantly lagging earnings. New Risk • Nov 24
New major risk - Financial position The company has less than a year of cash runway based on its current free cash flow trend. Free cash flow: -zł91m This is considered a major risk. With less than a year's worth of cash, the company will need to raise capital or take on debt unless its cash flows improve. This would dilute existing shareholders or increase balance sheet risk. Currently, the following risks have been identified for the company: Major Risks Less than 1 year of cash runway based on free cash flow trend (-zł91m free cash flow). Negative equity (-zł484m). Minor Risks Share price has been volatile over the past 3 months (9.5% average weekly change). Market cap is less than US$100m (zł134.7m market cap, or US$33.7m). Reported Earnings • Sep 24
Second quarter 2023 earnings released: EPS: zł0.03 (vs zł0.057 loss in 2Q 2022) Second quarter 2023 results: EPS: zł0.03 (up from zł0.057 loss in 2Q 2022). Revenue: zł68.6m (down 35% from 2Q 2022). Net income: zł4.90m (up zł14.1m from 2Q 2022). Profit margin: 7.1% (up from net loss in 2Q 2022). The move to profitability was driven by lower expenses. Over the last 3 years on average, earnings per share has increased by 64% per year but the company’s share price has only increased by 4% per year, which means it is significantly lagging earnings growth. Announcement • Sep 12
UAB Vilniaus Kogeneracine Jegaine Signed A Settlement Agreement with Its Former Contractor, Rafako S. A UAB Vilniaus kogeneracine jegaine has signed a settlement agreement with its former contractor, a Polish company Rafako S. A. As announced previously, the Arbitration Institute of the Stockholm Chamber of Commerce ruled partially in favour of Vilnius CHP. According to the arbitration rules of the Arbitration Institute of the Stockholm Chamber of Commerce, a mandatory settlement period has been set for the parties to the dispute. Considering a multitude of circumstances, including the ones related to the financial position of Rafako, a settlement agreement was concluded between the parties agreeing to a monetary compensation of nearly EUR 30 million to Vilnius CHP, a part of which (EUR 14,965,000) Vilnius CHP had already received, and the other part (EUR 15 million) will be paid by Rafako to Vilnius CHP in instalments over five years. According to the settlement agreement, Vilnius CHP is to receive all the equipment and the documents necessary for the biomass project that were in possession of Rafako. Considering the value of the equipment and the documents, Vilnius CHP will additionally recover nearly EUR 2 million and will ensure the continuity of the biomass project’s development. The settlement agreement is still pending for approval from the Arbitration Institute of the Stockholm Chamber of Commerce. The Group will not inform about this in a separate notification. Despite the replacement of the main contractor, Vilnius CHP’s management was able to ensure the project's continuity. Currently, the Vilnius CHP biomass unit is in its final construction and commissioning stages. Valuation Update With 7 Day Price Move • Jul 17
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to zł1.18, the stock trades at a trailing P/E ratio of 3.5x. Average trailing P/E is 10x in the Machinery industry in Poland. Total loss to shareholders of 13% over the past three years. New Risk • Jul 13
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Polish stocks, typically moving 7.5% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (16% operating cash flow to total debt). Negative equity (-zł114m). Minor Risks Share price has been volatile over the past 3 months (7.5% average weekly change). Market cap is less than US$100m (zł199.5m market cap, or US$50.2m). Announcement • Jun 04
Rafako S.A., Annual General Meeting, Jun 29, 2023 Rafako S.A., Annual General Meeting, Jun 29, 2023, at 12:00 Central European Standard Time. Valuation Update With 7 Day Price Move • Apr 04
Investor sentiment improves as stock rises 15% After last week's 15% share price gain to zł1.48, the stock trades at a trailing P/E ratio of 4.4x. Average trailing P/E is 9x in the Machinery industry in Poland. Total returns to shareholders of 179% over the past three years. Valuation Update With 7 Day Price Move • Feb 24
Investor sentiment improves as stock rises 17% After last week's 17% share price gain to zł1.49, the stock trades at a trailing P/E ratio of 4.4x. Average trailing P/E is 10x in the Machinery industry in Poland. Total returns to shareholders of 199% over the past three years. Valuation Update With 7 Day Price Move • Jan 16
Investor sentiment deteriorated over the past week After last week's 28% share price decline to zł1.16, the stock trades at a trailing P/E ratio of 3.5x. Average trailing P/E is 10x in the Machinery industry in Poland. Total returns to shareholders of 47% over the past three years. Reported Earnings • Nov 24
Third quarter 2022 earnings released: EPS: zł0.24 (vs zł0.64 in 3Q 2021) Third quarter 2022 results: EPS: zł0.24 (down from zł0.64 in 3Q 2021). Revenue: zł364.7m (up 169% from 3Q 2021). Net income: zł38.5m (down 53% from 3Q 2021). Profit margin: 11% (down from 60% in 3Q 2021). Over the last 3 years on average, earnings per share has increased by 79% per year but the company’s share price has only increased by 16% per year, which means it is significantly lagging earnings growth. Reported Earnings • Oct 05
Second quarter 2022 earnings released: zł0.057 loss per share (vs zł0.70 loss in 2Q 2021) Second quarter 2022 results: zł0.057 loss per share (improved from zł0.70 loss in 2Q 2021). Revenue: zł105.4m (up 4.0% from 2Q 2021). Net loss: zł9.16m (loss narrowed 90% from 2Q 2021). Over the last 3 years on average, earnings per share has increased by 58% per year but the company’s share price has only increased by 10% per year, which means it is significantly lagging earnings growth. Valuation Update With 7 Day Price Move • Aug 30
Investor sentiment deteriorated over the past week After last week's 17% share price decline to zł1.36, the stock trades at a trailing P/E ratio of 6.3x. Average trailing P/E is 12x in the Machinery industry in Poland. Negligible returns to shareholders over past three years. Announcement • May 31
Rafako S.A., Annual General Meeting, Jun 23, 2022 Rafako S.A., Annual General Meeting, Jun 23, 2022, at 12:00 Central European Standard Time. Reported Earnings • May 02
Full year 2021 earnings released: EPS: zł0.021 (vs zł2.49 loss in FY 2020) Full year 2021 results: EPS: zł0.021 (up from zł2.49 loss in FY 2020). Revenue: zł537.0m (down 56% from FY 2020). Net income: zł3.34m (up zł320.2m from FY 2020). Profit margin: 0.6% (up from net loss in FY 2020). The move to profitability was driven by lower expenses. Over the last 3 years on average, earnings per share has fallen by 6% per year whereas the company’s share price has fallen by 4% per year. Reported Earnings • Nov 24
Third quarter 2021 earnings: EPS in line with analyst expectations despite revenue beat Third quarter 2021 results: EPS: zł0.64 (up from zł0.089 in 3Q 2020). Revenue: zł135.4m (down 55% from 3Q 2020). Net income: zł81.1m (up zł69.8m from 3Q 2020). Profit margin: 60% (up from 3.7% in 3Q 2020). Revenue exceeded analyst estimates by 7.3%. Over the last 3 years on average, earnings per share has fallen by 34% per year but the company’s share price has only fallen by 9% per year, which means it has not declined as severely as earnings. Is New 90 Day High Low • Mar 01
New 90-day high: zł1.40 The company is up 41% from its price of zł0.99 on 01 December 2020. The Polish market is up 7.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Machinery industry, which is up 32% over the same period. Is New 90 Day High Low • Jan 07
New 90-day high: zł1.16 The company is up 34% from its price of zł0.86 on 09 October 2020. The Polish market is up 15% over the last 90 days, indicating the company outperformed over that time. It also outperformed the Machinery industry, which is up 22% over the same period. Reported Earnings • Dec 03
Third quarter 2020 earnings released: EPS zł0.089 The company reported a strong third quarter result with improved earnings, revenues and profit margins. Third quarter 2020 results: Revenue: zł301.6m (up 1.0% from 3Q 2019). Net income: zł11.3m (up zł36.0m from 3Q 2019). Profit margin: 3.7% (up from net loss in 3Q 2019). The move to profitability was primarily driven by lower expenses. Over the last 3 years on average, earnings per share has fallen by 116% per year but the company’s share price has only fallen by 39% per year, which means it has not declined as severely as earnings. Announcement • Oct 07
UAB Vilniaus Kogeneracine Jegaine Terminates the Contract with Contractor Rafako S.A AB Ignitis Grupe, informed that on 6 October 2020 its subsidiary UAB Vilniaus Kogeneracine Jegaine (hereinafter - Vilnius CHP Plant) decided to terminate the contract with contractor Rafako S.A. (hereinafter - Rafako or "the Contractor"). The decision to terminate was made after the Company on 5 October 2020 received a statement from the contractor Rafako declaring its intent to terminate the contract and after evaluation of the Contractor's technical and financial inability to fulfil the contract. It is notable that the Company does not accept the arguments presented in the statement and intends to protect its rights using measures provided in the contract. Announcement • Oct 02
Agencja Rozwoju Przemyslu S.A. entered into a preliminary agreement to acquire RAFAKO EBUS sp. z o.o from Rafako S.A. (WSE:RFK) for PLN 0.02 million. Agencja Rozwoju Przemyslu S.A. entered into a preliminary agreement to acquire RAFAKO EBUS sp. z o.o from Rafako S.A. (WSE:RFK) for PLN 0.02 million on August 5, 2020. An agreement was signed on September 28, 2020. In a related transaction, RAFAKO EBUS, with the participation of Agencja Rozwoju Przemyslu S.A. entered into an agreement to acquire Rafako Spólka Akcyjna Oddzial w Solec Kujawski (ZCP) from Rafako S.A. (WSE:RFK) for PLN 31 million. Upon the transfer of ownership of RAFAKO EBUS shares to Agencja Rozwoju Przemyslu, the owner of Rafako Spólka Akcyjna Oddzial w Solec Kujawski (ZCP) will be RAFAKO EBUS.
The transaction is conditional upon, obtaining a positive result of technological research of solutions members of the ZCP, obtaining appropriate corporate approvals, approvals of financial institutions, conclusion final ZCP sale agreement. The agreement provides for a condition precedent, which is the payment of the price for Rafako Spólka Akcyjna Oddzial w Solec Kujawski (ZCP) which will be paid from part of the funds obtained by RAFAKO EBUS from Agencja Rozwoju Przemyslu as a result of the undertaken resolutions on the increase of the share capital of RAFAKO EBUS as part of the closing action. The conditional promised agreement for the sale of EBUS shares will be concluded by September 10, 2020, provided that all conditions precedent are met by September 9, 2020. As of September 10, 2020, the conditional promised agreement for the sale of EBUS shares will be concluded by October 13, 2020, provided that by October 12, 2020, the conditions precedent set out in the preliminary sale agreement for shares. Announcement • Aug 28
Rafako to Lay Off Up to 400 Employees Rafako announced that, it will likely lay off up to 400 employees to cut employment costs and adjust them to the current market situation. Announcement • Aug 14
Rafako Appoints Mariusz Zawisza as New CEO Rafako appointed Mariusz Zawisza as new CEO. Announcement • Jul 09
Rafako S.A. Auditor Raises 'Going Concern' Doubt Rafako S.A. filed its Annual on Jun 30, 2020 for the period ending Dec 31, 2019. In this report its auditor, Grant Thornton, gave an unqualified opinion expressing doubt that the company can continue as a going concern.