AB bonds worth PLN 100 mln listed on the Catalyst market

AB bond trading has taken off with interest payments every six months. As a result, debt securities of the regional market leader in IT distribution can be acquired by any investor. Except, of course, if they are available which is not the case at the moment.

During the first two weeks of trading bonds of the largest IT distributor in Central and Eastern Europe – AB Group, there was no transaction due to the lack of sales offers. The possibility in trading of AB’s debt securities ensured their debut on the Catalyst (WSE), which took place on 20 November 2014.

– This situation confirms the enormous success of our bond issuance program. At the order book building for the first tranche, the value of orders exceeded PLN 160 mln, which caused to exhaust the whole bond issue program, and we still had to reduce the amount of orders.  Financial institutions have showed the highest confidence in our strategy and safety of business as well as in our development -says Andrzej Przybyło, CEO of AB SA.

– We’ve diversified the external sources of finance in a significant way, which before had been based on short-term bank loans. What is extremely important is that we have acquired bond financing on very attractive terms. Besides, investors can collect a higher return than in bank deposits, with the warranty of our stability. It is the classic situation of a „win-win” – adds Grzegorz Ochędzan, a member of the Board of Directors, specializing in finance at AB SA.

ABE0819 bonds have a single nominal value of PLN 10 000 (there are 10 000 shares on the market), and their maturity date is 12 August 2019.  The interest rate is 1.6 percentage points above the WIBOR 6M – therefore in the current interest period, the gross interest is 4.29 percent. The coupon is paid every half year (the nearest payment will occur on February 12, the right to acquire the interest on February 4). It is worth noting that although the original offer of AB SA’s bonds was intended for institutional investors, on the secondary market – Catalyst, the bonds can be also acquired by individual investors.

AB Group maintains a highest-ever level of activity in a comprehensive development
and keeps the promises made with regard to the pace of development of its core business and outside of IT (household appliances/electronics, franchise, e-commerce). In recent months, the Company has signed new direct distribution agreements with major manufacturers of domestic appliances (e.g. Amica, Beko), the e-commerce segment has increased, there has been a further dynamic development of the new franchise networks – Optimus (system integrators), Digimax (mobile solutions, smart home), and Kakto (domestic appliances / electronics). AB Group has strengthened its number 1 position in terms of IT distribution in CEE. The Company has also gained the prestigious contracts to distribute iPhone smartphones in Poland, the Czech Republic and Slovakia, becoming the only broad line distributor of Apple devices (including iPod, iPad and Mac) in these countries.

In the third quarter of this year, AB’s consolidated revenues increased by 19% YOY, to PLN 1.5 bln, EBITDA by 10%, to PLN 22.7 mln, and the net profit by 16% to PLN 15.1 mln.  Debt ratios have fallen significantly, including the net financial debt ratio to EBITDA (on 30 September 2014, it had the value of 1.6, 2.2 the year before). Simultaneously, the selling, general and administrative ratio (S&GA) remains below 3%

– Our general debt and cost ratios are at the lowest level in the industry, which guarantees a high level of operational and financial safety. Generating higher and higher scores on the net level, along with a safety net in terms of foreign exchange and credit risk give a strong warranty for further growth in financial performance and strong positive cash-flow – emphasizes Grzegorz Ochędzan.