According to Merav Fischer-Sharoni, senior analyst at Leumi Partners, “the company showed a 15.9% increase in revenue in 2020. The increase in revenue was due to a quantitative and financial increase in air conditioner sales, especially in the summer months, when there were records of consumption, especially in household appliances. In the past, during the Corona crisis, the length of stay in homes increased significantly, which led to increased use of household appliances, including air conditioning, which was also affected by the weather, resulting in increased wear and tear and consequent increases in replacements and upgrades of these products. “Seasonally, we saw a moderation in this trend compared to previous quarters, but an increase of over 20% compared to the corresponding quarter. The increase in revenue also led to an improvement in the company’s profitability indices, compared to the corresponding year.”
Allegedly then Leumi should have had bulls on the stock. But they explain: “We assume that 2021 will also be characterized by higher growth than we have seen in previous years, due to the continued use of air conditioning and an increase in wear and tear, as well as as a result of rising prices, but we believe growth will be more moderate.”
In the bottom line, Fischer-Sharoni notes that “Tadiran is a stable company, with a long-standing reputation and a strong brand, which has shown significant improvement in recent years in terms of market share and brand strength. It is clear that the company has growth engines for the coming years, entering new areas and new territories. . At the same time, we estimate that despite the engines of growth and the expected improvement in the company’s results in the coming years, the market price of the stock is high, embodying future growth, and even beyond. As a result, we are lowering the investment recommendation for the share to SELL, at a target price of NIS 280 per share, which is about 17% lower than the market value today (before a dividend of NIS 5.86 per share). ”
Good reports for the company with 47% growth in EBITDA
Despite a seasonal weakness in net income for the fourth quarter due to seasonal deductions, EBITDA grew by 38% in the quarter and by 47% for the year as a whole. But the company’s share, which has soared in the last 12 months by about 160%, and by about 11.4% since the beginning of the month, is trading at a high multiple of 28.5, and at a price of NIS 350 per share.
The net profit for the fourth quarter of 2020 was NIS 15.9 million, compared with NIS 20 million in the corresponding quarter in 2019, ie a decrease of about 20% in the quarterly profit. However, the company concludes 2020 with a jump of about 42.6% in annual profit, which amounted to about NIS 100.6 million, compared to about NIS 70.5 million in 2019.
The company announces the advance of the expected 2 billion revenues in two years for 2023 compared to the original reported date – 2025. In addition, the company’s board of directors decided to distribute a dividend to the company’s shareholders in the amount of NIS 50 million, ie 5.9 per share, to be paid in March 22. This year, the company distributed a dividend of approximately NIS 73.5 million, which constitutes approximately 73% of the company’s net profit in 2020.
EBITDA in the fourth quarter of 2020 grew by approximately 37.7% and amounted to approximately NIS 31.6 million, compared with approximately NIS 22.9 million in the corresponding quarter last year. EBITDA in 2020 grew by approximately 46.8% and amounted to approximately NIS 160.9 million, compared with approximately NIS 109.6 million in 2019.
The company’s revenues in 2020 amounted to NIS 989.5 million, compared with a total of NIS 853.6 million last year, an increase of 15.9%. The increase in the Group’s revenues was mainly due to a quantitative and financial increase in sales of air conditioners. In 2020, a quantitative and monetary record in sales in the air conditioners sector compared to similar periods. Sales turnover in the fourth quarter of 2020 grew by approximately 23% and amounted to NIS 199.4 million, compared with NIS 162.1 million in the corresponding quarter last year. According to the company, “This is a record quantitative and monetary record quarter in the sale of air conditioners compared to parallel quarters.”
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