HK seems to be performing well operationally despite various headwinds in the operating environment, and the market seems to like it too, at least today.
However, I’m puzzled by the modification gain from repurchasing the old bond. This “gain” is EUR 11.2m and will be amortized as an expense over the next four years, i.e., 2.8m per year. This will presumably reduce EPS by about 3c per share in the years 2027–2030? Since a one-off gain of roughly 12c per share has now been recognized.
The market hardly gives any weight to the one-off 12c gain, but when earnings are reported from 2027 onward, that 3c/year will probably hit all reported EPS figures, right? Or will the company start reporting some adjusted EPS figure?
The result of this amortization is that every year EUR 2.8m and the amortized portion of the EUR 5.4m bond rollover fee will be reported in financial expenses, totaling about EUR 4.2m in non-cash financial expenses, is that correct? And with the cash-flow impact of the new 90m bond being around 5.7m now, the company’s P&L will still show interest expenses of 5.7 + 4.2 = 9.9m? Meaning the 90m loan will burden the P&L with an annual cost of 11% going forward?
And one more point: does this also affect the ROE calculation? Now, with the one-off gain, equity increased by about 12c, and when net profit is reported 3c lower in the future because of this, ROE will naturally be much lower. Will they present some sort of adjustment calculation for this as well?
In my opinion, this is strange; even though accounting law allows it, it muddies transparency.