Today’s Headlines
· Banking System Interest Rates | July 2024
· Greek-Cypriot agreement on Great Sea Interconnector
· OPAP 2Q24 Results Review | Strong 1H24 performance, in line with our call; EUR 0.60/share interim dividend, above our estimate
· Aegean Airlines to invest EUR 25m in Volotea
· Sarantis Group CC highlights
· Alpha Services and Holdings issued new AT1 Notes
· Alpha Services and Holdings Share Buyback
· Attica Bank EGM approved merger with Pancreta
· Coca Cola HBC new shares to commence trading today
· Trade Estates 1H24 results out
Sector Headlines
Banking System Interest Rates | July 2024
|
New Production |
May’24 |
Jun’24 |
Jul’24 |
MoM |
|
Mortgage loans (fixed up to 1 yr) |
4.96% |
4.70% |
4.42% |
-0.28% |
|
Consumer loans |
14.99% |
14.92% |
14.93% |
0.01% |
|
Business (fixed maturity floating) |
5.39% |
5.41% |
5.63% |
0.22% |
|
(a) Average loans |
5.54% |
5.77% |
5.86% |
0.09% |
|
HH deposits (Overnight ) |
0.03% |
0.03% |
0.03% |
0.00% |
|
HH term deposits (up to 1 year) |
1.83% |
1.86% |
1.87% |
0.01% |
|
Corporate term deposits (up to 1 year) |
3.18% |
3.16% |
3.11% |
-0.05% |
|
(b) Average deposits |
0.56% |
0.57% |
0.57% |
0.00% |
|
Interest Rate Spread [(a) – (b)] |
4.98% |
5.20% |
5.29% |
0.09% |
|
Outstanding amounts (Back Book) |
||||
|
(a) Loans |
6.23% |
6.15% |
6.09% |
-0.06% |
|
(b) Deposits |
0.54% |
0.54% |
0.53% |
-0.01% |
|
Interest Rate Spread [(a) – (b)] |
5.69% |
5.61% |
5.56% |
-0.05% |
source: Bank of Greece
Facts: Bank of Greece announced that the average interest rate on new production of loans widened by 9bps m-o-m to 5.86% in July 2024, whilst the average interest rate on new production of deposits remained stable m-o-m at 0.57%. The rise in the average interest rate on new loan production by 9bps m-o-m is attributed to the higher interest rates on business (+22bps m-o-m), while the interest rate on mortgage loans squeezed by 28bps m-o-m. Thus, the interest rate spread for new production widened by 9bps m-o-m to 5.29%. On outstanding amounts, the interest rate spread squeezed by 5bps m-o-m to 5.56%.
Greek-Cypriot agreement on Great Sea Interconnector
According to Energypress.gr, following multi day negotiations between the Greek and Cypriot authorities, the two parties finally reached an agreement with regards to the Great Sea Interconnector, planned to link the Greek and Cypriot electrical grids, under the mediation of the EU DG for Energy. RAEK, the Cypriot energy regulatory authority, has agreed to approve the recovery of revenue during the project’s development, beginning 2025, until its launch, planned for 2030. The agreement essentially means that IPTO’s concerns over the project’s funding shortage have been accepted by the Cypriot government. Additionally, any remaining costs incurred by IPTO during the construction of the project that exceed EUR 125m will be recovered, again from Cypriot consumers, through capitalization after the interconnection begins operation. Also, RAAEY, the Greek regulatory authority for energy, needs to approve a WACC level for project revenues to be derived from regulated charges in Greece at 9%.
Company Headlines
OPAP || BUY | CP: EUR 16.10 | TP: EUR 19.30
2Q24 Results Review: Strong 1H24 performance, in line with our call; EUR 0.60/share interim dividend, above our estimate
Facts: OPAP released solid 2Q24 results, broadly in line with our estimates. In particular, revenues came in at EUR 532.8m (slightly above Optima, +7.0% YoY), EBITDA reached EUR 183.4m (beating our call, +3.11% YoY), and recurring net profits of EUR 106.4m (slightly above our call, -0.8% YoY). With respect to the dividend, OPAP declared an interim DPS of EUR 0.60/share (ex-date 4 November, DY: 3.7%), above our estimate. The company will hold a conference call today at 16:00 Athens time (Greek participants: +30 211 180 2000, UK participants: +44 (0) 800 368 1063, USA participants: +1 516 447 5632).
OPAP 2Q/1H24 Key P&L Results
|
EUR m |
2Q23 |
2Q24 |
YoY |
Optima |
Actual vs. Optima |
1H23 |
1H24 |
YoY |
|
Betting (Retail+Stoiximan+Online OPAP) |
151.8 |
181.6 |
19.7% |
170.3 |
6.7% |
320.6 |
350.1 |
9.2% |
|
Lottery (Retail + Online Loterry) |
177.7 |
177.1 |
-0.3% |
178.2 |
-0.6% |
366.4 |
373.1 |
1.8% |
|
Instant & Passives |
29.6 |
24.7 |
-16.6% |
25.5 |
-3.0% |
60.1 |
52.5 |
-12.8% |
|
VLTs |
81.0 |
80.0 |
-1.2% |
80.6 |
-0.7% |
165.4 |
166.5 |
0.6% |
|
Online casino (Online OPAP + Stoiximan) |
58.1 |
69.4 |
19.6% |
69.2 |
0.3% |
113.0 |
140.3 |
24.2% |
|
Revenues GGR |
498.1 |
532.8 |
7.0% |
523.8 |
1.7% |
1025.6 |
1082.5 |
5.6% |
|
EBITDA |
177.9 |
183.4 |
3.1% |
175.1 |
4.7% |
374.4 |
373.7 |
-0.2% |
|
% of GGR |
35.7% |
34.4% |
-130bps |
33.4% |
|
36.5% |
34.5% |
-200bps |
|
EAT ex-minorities |
107.3 |
106.4 |
-0.8% |
102.5 |
3.8% |
225.6 |
221.9 |
-1.6% |
|
EPS |
0.294 |
0.326 |
10.8% |
– |
– |
0.621 |
0.636 |
2.5% |
Source: The company, Optima Bank
Analysis: Turning to segmental performance, the strong results were driven by the improved Betting, and on-line casino performance, aided by the strong contribution of EURO’24, the momentum of Eurojackpot and the strong performance of online casino with elevated player engagement. It is noted that is the first time that land-based retail channel recorded a slight decrease (-1.3% y-o-y), while online channel continued to grow at a high pace (+33.6% y-o-y) and reached c. 30% of total GGR in 2Q24 vs. 24% in 2Q23 We note that Instant & Passives is the only category that recorded a notable decrease of 16.6% y-o-y in 2Q24, negatively affected by the Scratch and laiko weak performance and strong online competition. Group’s net debt is at EUR 193.1m (with a solid cash position of EUR 450.4m vs. EUR 487.3 at FY23), with Net Debt/LTM EBITDA at 0.26x (0.30x incl. Leases).
Revenue performance per distribution channel (online and Land-based)
|
EUR m |
2Q23 |
2Q24 |
YoY |
|
Online GGR |
119 |
159 |
33.6% |
|
% of total GGR |
23.9% |
29.8% |
|
|
Land Based GGR |
379 |
374 |
-1.3% |
|
% of total GGR |
76.1% |
70.2% |
|
|
Total GGR |
498.1 |
532.8 |
7.0% |
Source: The company, Optima Bank
Comment: Overall, we expect OPAP’s solid performance and profitability recorded in 2Q24 to continue in 3Q24e, aided by the summer season event sports calendar and the high tourism inflows that will further enhance land-based operations, while we expect on-line to continue growing. Also, we expect lower operating expenses in 2H24 as the expensive front-loaded promotional campaign of Euro jackpot and Euro’24 (marketing expenses up by c.42% in 2Q24) will be normalized boosting profit margins and we expect OPAP to be able to meet the upper bound of the management’s guidance for an EBITDA of EUR 750-770m. With respect to the dividend, the interim distribution (above our expectations) of EUR 0.60/share signals in our view the company’s confidence for a positive outlook in the short and medium term. We reiterate our ‘Buy’ rating on attractive risk adjusted returns and valuation grounds (20% upside potential from current price levels including dividend distributions) and a very attractive investment case (generous dividend, strong FCF, unlevered position).
Aegean Airlines to invest EUR 25m in Volotea
Aegean Airlines will participate in an overall capital increase of Volotea of up to EUR 50m through a profit participating loan which will be convertible into shares by joining 50/50% with Volotea’s existing shareholders. The agreement has a second part for another tranche of the convertible loan in 2Q25 for an additional amount of up to EUR 50m, where Aegean Airlines will participate by 50%. In case that the participation of the Aegean converted into shares would translate to a 13% stake in Volotea while if the second tranche is also executed and converted into shares, the overall stake of AEGEAN in Volotea could reach c. 21%. AEGEAN’s Chairman Eftichios Vassilakis highlighted that the agreement contains the cooperation in distribution and other commercial areas, with the aim of exploiting synergies between the two companies to develop and expand the international network to/from Greek Regional airports, while the two companies also agreed to jointly explore further cooperation in the provision of MRO and Flight Simulator Training services by AEGEAN’s Group. Volotea is a low-cost carrier based in Barcelona with a fleet of 41 Airbus that curried 10.3m passengers in 2023. The focus of the Airline is to provide direct flights to previously underserved and largely seasonal leisure markets. FY23 was a strong year for the company with revenues reached c. EUR 700m and EBITDA of c. EUR 96m (EBITDA margin of c.13.8%)
Sarantis Group CC highlights
During yesterday’s conference call, management stressed that: a) it is exploring new investment opportunities, b) management is confident that it will achieve its fiscal year guidance of sales of c. EUR 575m and EBITDA of c. EUR 80m, c) investment in the PoliPack plant was completed in 2Q24, d) Stella Pack plant will be further expanded to serve all countries where the company operates, e)investments in the new Clinea brand is continued and management explores new markets, while the Sarantis Group is focusing on expanding its footprint in the US through Amazon, f)margins are improving as investments mature and plants are more efficient.
Alpha Services and Holdings issued new AT1 Notes
Alpha announced that it successfully completed the pricing of its EUR 300m Fixed Rate Reset Additional Tier 1 Notes, which are non-call 6 perpetual notes, with a yield of 7.5% from 11.875% in the previous issue of EUR 400m in February 2023. Demand amounted to EUR 2.9bn, i.e. an oversubscription of 9.5x. The issuance of the AT1 Notes optimizes the regulatory capital structure and diversifies its capital sources while further strengthening the Total Capital Ratios by circa 93bps. The news is positive and reiterate our Buy rating and TP of EUR 2.10/share.
Alpha Services and Holdings Share Buyback
Alpha announced that during the period 27.08.2024 – 30.08.2024 it purchased a total of 977,017 own shares, with an average price of EUR 1.5707/share and a total cost of EUR 1,534,567.27. Following the above purchases, the company holds a total of 12,370,391 own shares, representing 0.53% of shares o/s.
Attica Bank EGM approved merger with Pancreta
The EGM of shareholders of Attica Bank approved its merger with Pancreta Bank by absorption of the latter by the former. Reportedly (Kathimerini), Attica plans the impeding rights issue and the issue of warrants of a total of EUR 735m to take place at the end of October, while management targets pre-provision income to exceed EUR 200m in 2027
Coca Cola HBC new shares to commence trading today
The company announced that the new 63,574 ordinary registered shares with a par value of CHF 6.70 each fully paid, which have already been issued following the exercise of stock option plan will commence trading today on ATHEX.
Trade Estates 1H24 results out
Trade Estates released its 1H24 results, with rental income up by 65.0% y-o-y, at EUR 17.8m, adj. EBITDA (i.e. excluding revaluation gains) at EUR 14.1m recording an increase of 62.6% y-o-y and Net Profits (ex. Revaluation gains) up by 56.8% y-o-y to EUR 6.9m. Funds from Operations reached EUR 7.3m, up by 60.1% and finally, NAV was up by 1.8% y-t-d at EUR 303.6m or 2.52/share, at a 35.1% discount compared to yesterday’s close.
Calendar of Events
Macros
06/09/24 | GDP 2Q:24 (provisional data)
06/09/24 | DBRS – Greek sovereign credit review
10/09/24 | CPI AUG & Industrial Production JUL
13/09/24 | Evolution of Turnover of Enterprises JUL & Import Price Index in Industry JUL
13/09/24 | Moody’s – Greek sovereign credit review
2Q/1H24 Results Release
04/09/24 | QUEST Holdings (Aft-mkt)
10/09/24 | Fourlis (Aft-mkt), Athens Airport (Aft-mkt)
11/09/24 | Aegean Airlines (Aft-mkt), ElvalHalcor (Aft-mkt)
12/09/24 | LAMDA Development (Aft-mkt), Alpha Trust Andromeda
17/09/24 | Noval Property
19/09/24 | Viohalco, Attica Bank, Alpha Real Estate, Lavipharm
20/09/24 | Premia Properties, Logismos
25/09/24 | ADMIE Holding (Bef-mkt), AS Company (Aft-mkt)
26/09/24 | EYDAP, INTERTECH, Loulis Food
27/09/24 | Piraeus Port Authority, Alpha Trust Holdings, Alumil (Aft-mkt), Biokarpet, Ble Kedros, Sunrise Mezz Plc, Thessaloniki Water Supply (Aft-mkt), Orilina Properties, Phoenix Vega Mezz PLC, Trastor REIC
30/09/24 | Epsilon Net (Bef-mkt), Galaxy Cosmos Mezz Plc, Space Hellas, Technical Olympic (Aft-mkt), Athens Medical Center, Interlife, Medicon, Pairis
EGM / AGM
04/09/24 | ELVE (AGM), Moda Bagno (AGM), Revoil (EGM)
06/09/24 | Orilina Properties (AGM), Domiki Kritis (AGM)
10/09/24 | Epsilon Net (AGM), MED (AGM)
13/09/24 | Bank of Cyprus (EGM)
16/09/24 | Coca-Cola HBC AG (EGM)
17/09/24 | MED (EGM)
19/09/24 | Ideal Holdings (EGM)
02/10/24 | Cenergy Holdings (EGM)
Initiation of trading of new shares
04/09/24 | Coca-Cola HBC AG (from stock option rights)
Ex-Dividend
09/09/24 | ADMIE Holding (EUR 0.058)
12/09/24 | Evrofarma (EUR 0.05)
17/09/24 | Epsilon Net
Ex-Capital Return
12/09/24 | Unibios (EUR 0.02)
Research Department
Equity Research
Τ: 210 8173 383 F: 210 3279 287 E: [email protected]
32 Aigialeias & Paradissou str., 15125, Maroussi optimabank.gr
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