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 and the debt to equity ratio improved year on year. This was due to a lower net debt and a higher EBITDA of the Group combined with a stable level of borrowed capital compared to 2013. The Company did not raise additional borrowed capital in 2014.
LIQUIDITY RATIOS
The current liquidity ratio was 7.0 in 2014 and 7.7 in 2013, which demonstrates high liquidity of the Group. A dividend of PLN 2.40 per share is expected to be paid in 2015, which will gradually reduce the ratio.
The coverage ratio of interest costs under the bond issue was 17.3 in 2014 and 12.9 in 2013. Consequently, the Company generates cash flows from operating activities which are more than sufficient to cover current liabilities under the bond issue.
PROFITABILITY RATIOS
An analysis of a set of profitability ratios suggests that the Group’s operating efficiency in 2014 was similar to 2013. The main drivers of the decrease in net profit margin include a lower share of profit of associates and a higher income tax.
The lower level of return on assets (ROA) and return on equity (ROE) in 2014 compared to 2013 was due to higher cash of the Group (for ROA) and higher retained earnings (for ROE) while the Group’s net profit level was stable. The dividend payment expected in 2015 will have a positive impact on the ratios in the future.
Key financial indicators
| As at / For the 12-month period ended | ||||
|---|---|---|---|---|
| 31 December 2014 | 31 December 2013 | 31 December 2012 | ||
| Debt and financing ratios | ||||
| Net debt / EBITDA | 1) 2) | -0.9 | -0.6 | -0.2 |
| Debt to equity | 3) | 34.9% | 38.3% | 43.9% |
| Liquidity ratios | ||||
| Current liquidity | 4) | 7.0 | 7.7 | 9.6 |
| Coverage of interest cost under bond issue | 5) | 17.3 | 12.9 | 9.1 |
| Profitability ratios | ||||
| EBITDA margin | 6) | 51.7% | 50.9% | 51.8% |
| Operating profit margin | 7) | 42.6% | 41.8% | 45.7% |
| Net profit margin | 8) | 35.4% | 40.0% | 38.8% |
| Cost / income | 9) | 57.2% | 58.6% | 54.2% |
| ROE | 10) | 16.8% | 19.0% | 19.7% |
| ROA | 11) | 11.5% | 12.8% | 13.5% |
1) Net debt = interest-bearing liabilities less liquid assets of WSE Group (as at balance-sheet date)
2) EBITDA = WSE Group operating profit + depreciation and amortisation (for a period of 12 months) (not including share of profit/loss 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 cost under bond issue = EBITDA / interest cost under bond issue (for a period of 12 months)
6) EBITDA margin = EBITDA / WSE Group revenue (for a period of 12 months)
7) Operating profit margin = WSE Group operating profit / WSE Group revenue (for a period of 12 months)
8) Net profit margin = WSE Group net profit / WSE Group revenue (for a period of 12 months)
9) Cost / income = WSE Group operating expenses (for a period of 12 months) / WSE Group revenue (for a period of 12 months)
10) ROE = WSE 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 = WSE Group net profit (for a period of 12 months) / Average total assets (excl. WCCH guarantee system) at the beginning and at the end of the last 12 month period
Source: Consolidated Financial Statements, Company