Market Comment
ATHEX headed south yesterday, reversing earlier gains, in line with the European stock markets. In more detail, the General Index dropped by 0.55% at 1,251.66 units (FTSE Large Cap: -0.36%, FTSE Mid Cap: -1.09%, Banks Index: -0.14%) and the traded value was shaped at EUR 106.3m, down from Friday’s EUR 193.4m. We expect the market to consolidate at current levels today.
Today’s Headlines
· Central government budget execution January-August 2023 (preliminary)
· Government to amend law on credit – Press
· Loans of credit servicing firms rose by EUR 670m q-o-q in 2Q23
· HFSF to dispose a 20% stake in National Bank in November – Press
· Eurobank BoD to convene on Friday – Press
· Cenergy Holdings 1H23e Results Preview: Strong performance and points to a record-high first semester profitability, despite increased borrowing costs
· Terna Energy announces that all 3 Waste Management Units in the Peloponnese are in full operation
· Ellaktor Conference call highlights (press)
· Thrace Plastics 1H23 results
Macro Headlines
Central government budget execution January-August 2023 (preliminary)
Facts: According to preliminary MoF data for the central government budget execution on a modified cash basis in January-August 2023, the central government budget recorded a EUR 103m deficit vs. a targeted deficit of EUR 2,426m (based on the 2023 Budget introductory report) and a EUR 4,105m deficit in the same period in 2022. On a primary basis, the budget recorded a EUR 5,485m surplus vs. a targeted surplus of EUR 2,314m and a EUR 19m surplus in the same period in 2022.
Analysis: In more detail, state budget net revenues in January-August 2023 rose by EUR 3,873m YoY to EUR 43,105m, showing outperformance vs. the target of EUR 47m. Revenues from taxes increased by 11.7% YoY to EUR 39,901m, beating the target by EUR 3,416m, mainly due to better performance of the previous year’s taxes collected in installments until the end of February 2023 (income tax of natural and legal persons, ENFIA) as well as to the EUR 470m payment of road duties which was expected to be collected in December 2022. On the expenditures front, primary budget expenditures were down by EUR 130m YoY to EUR 43,207m shaping also EUR 2,276m below the target.
Sector Headlines
Government to amend law on credit – Press
According to press reports (insider), the government plans to amend the current law on credit in order to pave the way for non-deposit financial institutions to grant loans up to EUR 25k as well as for servicers.
Loans of credit servicing firms rose by EUR 670m q-o-q in 2Q23
According to Bank of Greece, the nominal value of loans to the domestic private sector serviced by Credit Servicing firms (servicers) increased by EUR 670m q-o-q to EUR 71.16bn in 2Q23.
Company Headlines
HFSF to dispose a 20% stake in National Bank in November – Press
Reportedly (euro2day), the BoD of HFSF will convene in the coming days in order to decide about the disposal of a 20% stake in National Bank of Greece within November. Recall that HFSF is currently holding a 40.39% stake.
Eurobank BoD to convene on Friday – Press
Press reports (powergame) indicate that the BoD of Eurobank Holdings will convene on Friday in order to decide about the price (range EUR 1.10-EUR 1.90 per share) of the buyback of HFSF’s stake (1.4% or 52,080,673 shares).
Cenergy Holdings || U/R | CP EUR 7.00 | TP U/R
1H23e Results Preview: Strong performance and points to a record-high first semester profitability, despite increased borrowing costs
1H23e Trading Update Preview: Cenergy Holdings is set to announce its 1H23e Results on Wednesday, 20 September, with a conference call scheduled for the following day at 15.00 local time. We expect a solid semester, with operating and bottom-line profitability recording new records for the Group, driven by the acceleration of backlog execution on healthy margins, which more than offsets the headwinds from the high financial costs.
In more detail, we see group sales up by 19.8% y-o-y at EUR 789m, driven by a) the increased metal prices, which however show some signs of deceleration in the 2nd quarter, b) the Cables segment, and c) also to the pipes segment, which are expected to have further stepped-up its operations, aided by the huge accumulated backlog (EUR 2.3bn in 31/03/12/2023).
Turning to profitability, we see EBITDA adj. (i.e. excluding metal impact and one-offs) at EUR 89.6m, up by 73.6% y-o-y, while accounting for EUR 15m Depreciation, increased financial expenses of EUR 33m (mainly driven by the recent interest rate hikes and to lesser extent by the increased by EUR 174m y-o-y net debt as of 31/12/2022) and 22% effective tax rate, we expect Net profits to jump by 75% y-o-y to EUR 32.2m.
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1H23e Group Key P&L forecasts |
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EUR m |
1H22 |
1H23e |
Y-o-Y change |
|
Turnover |
658.7 |
789 |
19.8% |
|
EBITDA adj. |
51.6 |
89.6 |
73.6% |
|
mgn |
7.8% |
11.4% |
352 |
|
Net Profit |
18.46 |
32.2 |
74.7% |
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Source: the Company, Optima bank research |
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Comment | We expect another strong earnings announcement by Cenergy, setting new high’s for the Group’s first half, driven by the further pick-up of the cables segmental performance, also aided by the recovered operations on more profitable projects from the Pipes segment (as a reminder, the management has repeatedly stated that it expects that the solid backlog built during the last months blends together high capacity utilization with satisfactory profit margins for the rest of the year).
In another comment, during the recent months of the current year, the Group secured several major contracts (especially for cables projects), further advancing the Group’s backlog, which stood at EUR 2.3bn in 2022-end.
That said, in our view, CENERGY is on track to meet the high end of management guidance for 2023e of EBITDA adj. at 180-200m. That said, we remain positive for the stock, and we reiterate our Buy recommendation.
Finally, we expect the management to provide with an update guidance for the Group’s performance and also its investment programme in Greece and abroad during Thursday’s conference call.
Terna Energy announces that all 3 Waste Management Units in the Peloponnese are in full operation
TE announced that the third management unit in the area of Skala Lakonia was officially put into operation. In total, the Integrated Waste Management of Peloponnese Prefecture represents an investment of EUR 152m (62.5 of which derive from NSRF – National Strategic Reference Framework funding), which corresponds to the construction and operation of the following: a) three Intermediate Management Units and three Waste Processing Units with a total capacity of 200,000 tons / year, b) three Sanitary Landfill Sites and c), two Waste Transfer Stations, all located in the regions of Arcadia, Messinia and Laconia, Corinth and Argolida.
Ellaktor Conference call highlights (press)
During the 1H23 conference call, Ellaktor’s management reportedly (Euro2day.gr) said that it will relaunch dividend payouts, with more details to be provided later this year. Regarding the sale of AKTOR to Intrakat, the management expects to be concluded by the end of the current year. Additionally, Ellaktor is still in exclusive negotiations with Trade Estates for the sale of smart park, and finally, expects the construction works in Marina Alimou to commence in 2-3 months.
Thrace Plastics 1H23 results
Group revenues came in at EUR ca180.1m (-15.3% y-o-y), EBITDA at EUR ca24.1m (-19.7% y-o-y) and net profit at EUR ca8.8m (-44.7% y-o-y).
Calendar of Events
Macros
20/09/23 | Current Account Balance JUL & Turnover Index in Industry JUL
28/09/23 | Building Activity JUN
29/09/23 | Producer Price Index in Industry AUG & Turnover Index in Retail Trade JUL
Results (2Q/1H23)
19/09/23 | Premia Properties, Thrace Plastics (Bef-mkt)
20/09/23 | Cenergy Holdings
21/09/23 | Jumbo (Aft-mkt), TERNA Energy (Aft-mkt), Viohalco, Euroconsultants (Aft-mkt)
25/09/23 | GEK TERNA (Aft-mkt)
26/09/23 | Epsilon Net (Bef-mkt)
27/09/23 | ADMIE Holding (Aft-mkt), LAMDA Development (Aft-mkt), Piraeus Port
28/09/23 | Attica Bank
29/09/23 | EYDAP, Ble Kedros, Trastor REIC, Thessaloniki Water Supply, Space Hellas, Biokarpet
EGM / AGM
26/09/23 | Attica Holdings (AGM)
04/10/23 | Biokarpet (EGM)
06/10/23 | CPI (EGM)
11/10/23 | Motor Oil (EGM)
Ex-Dividend
04/10/23 | ADMIE Holding (EUR 0.0582438822)
13/10/23 | ELVE (EUR 0.40)
02/11/23 | OPAP (interim EUR 1.00)
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OPTIMA BANK |
Research Department |
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