Tadiran: Annual profit jumped 42.6%; But the stock is trading at a high multiplier – the capital market

Tadiran again publishes good reports, when 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. This is ultimately an air conditioner company and not a high-tech company. So these are definitely good results, but is the stock price attractive right now? Not sure.

Air conditioning company

Tadiran Holdings
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Reports a weakness in the net profit for the fourth quarter of 2020, which stood at 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 explains that “the decrease is mainly due to a decrease in income from taxes in the fourth quarter of 2019, which amounted to NIS 2.3 million, as well as an increase in taxable income compared to tax expenses of NIS 3.5 million recorded in the fourth quarter of 2020.”

The company announces the advance of the expected 2 billion revenues in two years For 2023 compared to the original date reported – 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 NIS 5.9 per share, to be paid on 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.”

The company’s shareholders’ equity at the end of 2020 amounted to NIS 398.5 million, compared with NIS 342.1 million at the end of 2019. In June 2020, the company raised debt by issuing NIS 120 million in NIS bonds.

In a recent interview with BizPortal, the company’s CEO Moshe Mamrod said: “We want to be an international company – this is my dream, it burns in me.” Mamrod deserves all the praise when he managed to improve Tadiran from tens of millions to NIS 2.3 billion. His next goal Is new areas – air purification and solar energy and being also big in the world – watch a TV interview.

Following the reports, says Moshe Mamrod, the company’s CEO and controlling shareholder“We sum up 2020 as a record year with excellent results with the continued upward trend in air conditioner sales. A few weeks ago we launched an innovative product that includes a unique patent for air treatment that purifies the air and kills about 99.999% of bacteria and viruses indoors. The new technology has been tested and approved by a laboratory “FDA registered and its effectiveness has been proven to be high compared to existing products on the market. We entered the field of renewable energy this year with the acquisition of 75% of Tadiran Solar. The company announces the advance of the strategic plan target date by two years – 2023”.