MONBAT – 2025 Q3 Consolidated Review

Q3 2025 consolidated results

• Monbat’s Q3 of 2025 appears to an improvement compared to previous quarters. While at YE 2024 investors hoped for a structured approach, the signs for that appeared in Q1 and grew slightly in Q2. The third quarter was a time, when revenues increased at a higher rate than the previous quarters and a large portion of the debt maturing in Q3 2025 was restructured for Q3 2026. On the other hand, overall debt levels remained the same and the indicated sales structure was ambiguous, perhaps creating more questions about the company’s future.
• The same problems persist: A) growing the sales and B) coping with the suffocating debt levels.
• Sales increased 4.56% (better than the Q2’2025 YoY increase of 3.56%) to BGN 291.1 mln. OPEX increased more (6.62%) driven by the rise in cost of materials (8.63% rise adding BGN 13.6mln to BGN 171.4mln), Payroll (12.4% to BGN 48mln, in line with inflation indexing trends) and Hired services (10.5% rise to BGN 35.6mln).
• The breakdown of sales in terms of industry groups reveals that the sales of lead-acid batteries have decreased by 7.9% to BGN 192mln. The drop of BGN 16.5mln was compensated by the rise of recycling of industrial materials, which is lead recycling and lead production, which marked a 78.7% increase to BGN47mln, adding BGN 20.7mln. Lithium-ion batteries dropped nearly 11% to BGN 5.7mln. Industrial Group NUR, responsible for the Tunisia and north African markets grew 15.4% to BGN 34.3mln adding BGN 4.5mln to the P&L and Other grew 47% to BGN 14mln adding BGN 4.5mln. According to the risk disclosures, the lower prices of lead on the international markets have resulted in lower sales value of their batteries business. Additionally, there were less batteries sold, which is clearly a sales / organizational problem. The causational relationship of that is unclear and it is possible that it is a mix of issues, such as the FIFO accounting approach and organizational problems. We will wait for confirmation and/or clarification from the Director of Investor Relations.
• Among the geographical markets South Africa and Hungary are the champions, which pushed sales up more than the next 4 – Israel, Romania, Serbia and Germany. Major contracting countries were Spain, Ukraine, United Kingdom, Netherlands and Italy. The company does not specify the reason for over or underperformance of each geographical market.
• While Sales increased 4.45% to BGN 291mln, OPEX increased 6.6% to BGN 287mln. On a positive note, the Q2 growth for sales was 3.25% and for OPEX 6.55%, which could indicate that OPEX have reached a plateau and a better sales strategy is in place.
• Depreciation increased 4.23% to BGN 18.7mln. While inventory dropped by 3.2% to BGN 90.8mln from 93.8mln last year, Intangible assets marked a 46.6% spike to BGN 29mln. The largest push here comes from R&D products (55% increase) and trademarks (30%). Such moves can be indicative of forward planning to position favorably in changing macro environment, which is a positive sign that there is a clear idea where the company is going. It is yet to be seen.
• Due to the higher expenses, EBIT marked a decline of 46.7% to BGN 5.9mln. On the other hand, the greater depreciation drove EBITDA to drop by just 15.3% to BGN 24.6mln. The EBITDA margin dropped 2% to 8.4%. Note that it slightly increased from Q2 when it was 8.3%.
• Even if the decreased debt resulted in decreased financial costs (BGN 9mln vs BGN 11.3mln last year), the decrease in EBIT and the significantly less financial income (BGN 1.8mln vs BGN 5.3mln last year) outweighed this positive move and Earnings before taxes went from positive BGN 4.9mln to a loss of BGN 1.3mln. Note that the loss in Q2 was BGN 2mln. The resulting Net Profit went from BGN 3.5mln to a Net Loss of BGN 2.7mln. Q2 had the same Net Loss. The dynamics of the income statement over the last 3 quarters indicate that Monbat is perhaps doing the right things, but it is possible that it will take time to reach confident positive territory.
• The elephant in the room for Monbat over the last couple of years has been its debt. It is still spread out in 35 facilities and 13 banks. We have covered the problem of debt maturity in the previous reports. Clearly, the insufficient EBITDA could not meet these payments, which left the only option to renegotiate maturity terms. Q2 saw Monbat with BGN 41mln maturing in Q3, but from the Q3 reports it is clear that they have managed to extend maturity to Q3 2026. This way, while there was no decline in the total debt, the amount of BGN 86.3mln, which was due in the next 4 quarters looking from Q2 with half of it due immediately, now is due in the next 4 quarters looking from Q3 with half of it due at in a year. On the negative side, we did not see a decrease in the balances in Q3. Monbat repaid some of its debt to Fibank, Raiffeisen Romania and ProCredit Serbia as well as the Tunisian STB, but attracted a chunk of new debt from another Tunisian bank Amen and Banca Popolare Pugliese.
• Q3 vs Q2, total debt remained the same – BGN 182.3mln vs BGN 182.5mln, but Net Debt dropped from BGN 173mln to BGN 166 indicating the increased cash reserves – a change from BGN 9.5mln to BGN 15.5mln.
• Too big to fail? The exposures to some of the banks are big and failure would get the banks into a territory they don’t want to get in – lower quality assets (NPLs) for their reporting, court proceedings, bad publicity, etc. Instead, banks could push for partial repayment to decrease exposure and negotiate a repayment plan with extended maturity date, while in the meantime collecting penalty fees and interest on the outstanding debt.
  • United Bulgarian Bank – their main banking partner with the largest exposure of BGN 55.3mln (a marginal increase of BGN 67 thousand). The majority of this debt (BGN 41mln) is now due in Q3 2026.
  • DSK Bank – remaining at the same level of BGN 11.9mln. Considering previous behavior of the bank, it is likely that they want to stick around and collect fees and interest on servicing the debt. It can be a positive sign, because their debt matures in Q2 2026, which is right after the BGN 19.6mln maturing for Investbank in the previous quarter.
  • Investbank – fully utilized (EUR 10mln), maturing in Q1 2026. It is interesting to see how this bank with significant exposure behaves about renegotiation considering the clear inability of Monbat to repay everybody when needed.
  • Raiffeisen Serbia – the same BGN 3.9mln exposure, maturing Q4 2025. Restructuring is possible considering the excellent performance of the Serbian market.
  • Raiffeisen Romania – BGN 7.5mln, a marginal decrease in Q3 of BGN 116 thousand. Debt maturing in Q1 2026, which will clearly require debt restructuring.
  • ProCredit Serbia – BGN 1.7mln maturing in Q4 2025. Possible repayment.
  • STB (Tunisia) – exposure decreased significantly from BGN 14.6mln in Q2 to BGN 7.5mln. Liquidity came from the new loan from Aman bank.
  • Fibank – currently the second largest banking partner after the extended massive facilities last year. Exposures almost fully utilized, BGN 2mln was repaid in Q2 and BGN 1.6mln repaid in Q3, which could serve as a bargaining point to restructure the debt in 2027 and 2028 if needed (which is a likely outcome).
  • Aman bank – a new Tunisian banking partner allowed them to withdraw BGN 9.2mln, BGN 7.1mln of which was used to repay half of the STB debt.
  • Mediocredito Italiano – exposure in Q2 decreased slightly to BGN 2.5mln.
  • Banca del Mezzogiorno – exposure in Q2 increased slightly to BGN 329 thousand.
  • Intesa Sanpaolo – debt tripled to BGN 1mln, debt maturing in Q4 2025.
• Maturities calendar and exposures in next year:
  • Q4 2025 – BGN 6.7mln – Raiffeisen Serbia, ProCredit Serbia and Intesa Sanpaolo.
  • Q1 2026 – BGN 27.1mln Investbank and Raiffeisen Romania
  • Q2 2026 – BGN 12.5mln – DSK Bank and Procredit Serbia
  • Q3 2026 – BGN 41.1mln – United Bulgarian Bank
• The Cash at the end of Q3 was BGN 15.5mln.
• Receivables from related parties – BGN 63mln, increased from BGN 62.4mln in Q2 and BGN 61mln in Q4 2024. It is likely that practically nothing of this account can be used to repay debt as 61% of that account (BGN 38mln) is receivables from Prista Oil Holding AD, Monbat’s main shareholder with 42.73% of the shares. According to Prista Oil Holding AD 2024 financial statements, which are public, we can conclude that the majority of the cash (BGN 8.3mln out of BGN 10.4mln) is blocked servicing LGs for suppliers and LGs needed for participation in auctions. Other receivables of Monbat are from the owners of Prista Oil Holding AD and associated companies owned by the same people.
• The decreasing profitability can play a harsh joke. In Q1 2025 we expected the annual EBITDA for 2025 to be between BGN 45mln and BGN 50mln. Q2 results showed results, which questioned if even annual EBITDA for 2025 of BGN 30mln was possible with the existing Q2 EBITDA of BGN 15.7mln. Q3 EBITDA was BGN 24.5. Considering the trend, annual EBITDA of BGN 30mln is possible, but surpassing the BGN 35mln mark would be a challenge. We hope that an accounting approach to amortization is not used to influence it.
• Expansion of sales will be the other important task. We are not sure how successful they are as there are clearly large fluctuations in each country and by business lines. They managed a double-digit increase in Q1, but the Q2 performance was below expectations. In the same time Q3 performance surpassed the Q2, so we a positively looking for better days ahead.

Full report can be downloaded from here.