Nova Poshta Y2021 financial report

28 November 2022

In Y2021 Nova Poshta increased its consolidated revenues by 24% y-o-y up to UAH 25.5 bln.

During Y2021 Nova Poshta increased number of its own outlets from 1769 to 1822, number of partners outlets (franchise) from 6 365 to 8 171. Number of deliveries grew as well by 14% y-o-y up t0 UAH 372 mln.

As a result consolidated revenues of Nova Poshta in Y2021 made UAH 25.5 bln, by 24% higher y-o-y.

The share of revenues from postal services made 82% of total or UAH 21 bln (+23% y-o-y), while revenues from financial services made UAH 4.6 bln.

Financial services have been more marginal operating income from financial services exceeded the one from pure postal services.

Total consolidated operating income of Nova Poshta in Y2021 made about UAH 3.5 bln (vs. UAH 3 bln a year ago), net income UAH 2.5 bln, operating cash flow UAH 4.7 bln (taking into account rental payments, which nominally relate to financing activity as per IFRS, UAH 3.6 bln). Mainly generated cash was directed to investment activity.

As for balance sheet structure and quality according to consolidated financials as of 31.12.21, main source of financing for Nova Poshta was Equity in amount of UAH 5.6 bln and bank loans of UAH 1.9 bln.

During Y2021 debt burden increased by UAH 1.6 bln, along with it the company paid UAH 706M of dividends (another UAH 250M was paid as dividends in the beginning of Y2022). It formally worsened balance sheet quality of Nova Poshta, which in general remains quite good.

Half of credit portfolio of the company was short-term, another important point is that Nova Poshta took loans in UAH, so its FX risk is low.

In assets we note UAH 3 bln of cash (thereof UAH 1.6 bln cash belonging to its clients).

As for the russian invasion impact on Nova Poshta activity, we note that by information of the company as of July 2022 volumes of services reached 80% of pre-war level.

We also note that in the autumn 2022 Nova Poshta entered the Polish postal services market, having opened first branches in Warsaw and Krakow. In the beginning of Y2023 Nova Poshta plans to start operations on the Czech market. Firstly the company mainly plans to provide services to Ukrainian which were forced to flee their country because of the war.

In general despite negative impact of the war and increase of debt burden in Y2021, we estimate financial standing of Nova Poshta as good. We estimate that in H1 2021 financial performance of the company worsened, but in H2 it should start to recover. The company keeps its development and remains the leader of Ukrainian postal services market.

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