Greek Market Watch: Budget execution, Public debt, CENERGY, MOH, OPAP, IPTO, GEKTERNA, Intrakat, KRI-KRI

Today’s Headlines

·         Central government budget execution January-October 2024 (preliminary)

·         Greece will seek to repay early at least EUR 5bn of bailout loans in 2025

·         CENERGY Holdings 3Q/9M24 Results: | Strong performance, above our call at bottom line, confirms 2024 guidance, new record high Backlog; capacity expansion investments progress according to schedule

·         MOH 3Q24e results preview | solid quarter, despite the sharp correction of the refining margins and the fire in the CDU

·         OPAP 3Q24e preview | Α positive quarter after a long time, in trajectory to meet management guidance  

·         Mr. Yannis Vardinoyannis appointed Chairman & Managing Director of Motor Oil

·         IPTO (in which ADMIE Holdings participates with 51%) launches the Tender of the Corinth – Kos Electrical Interconnection

·         Competition authority approves concession of Attiki Odos to GEKTERNA

·         INTRAKAT EGM today

·         KRI-KRI 3Q24 results out on 26 November

 

Macro Headlines 

Central government budget execution January-October 2024 (preliminary)

Facts: According to preliminary MoF data for the central government budget execution on a modified cash basis in January-October 2024, the central government budget recorded a EUR 6,078m surplus vs. a targeted deficit of EUR 2,213m (based on the 2024 Budget introductory report) and a EUR 482 deficit in the same period in 2023. On a primary basis, the budget recorded a EUR 13,489m surplus vs. a targeted surplus of EUR 4,667m and a EUR 6,080m surplus in the same period in 2023.

Comment: It is noted that part of the difference in tax revenues of EUR 647m is accounted for in the fiscal result of 2023, while EUR 2,887m concerning the time differentiation of the transfers to SSFs and the military procurement expenditure do not affect the outcome in fiscal terms. With the exception of the above amounts, the overperformance in the State Budget Primary Balance for the period of January–October is EUR 2,070m. 

Greece will seek to repay early at least EUR 5bn of bailout loans in 2025

The Greek PM Kyriakos Mitsotakis said at a Bloomberg event on Monday that Greece will seek to repay at least EUR 5bn of bailout loans in 2025 ahead of maturity, as an indication of the confidence in the country’s public finances. 

Company Headlines 

CENERGY Holdings || BUY | CP EUR 8.34 | TP EUR 12.60

3Q/9M24 Results: Strong performance, above our call at bottom line, confirms 2024 guidance, new record high Backlog; capacity expansion investments progress according to schedule

Facts: Cenergy Holdings released a strong set of 3Q24 results, with group turnover up by 20.6% YoY to EUR 448.1m with good execution of a favourable mix of energy projects on higher volumes, which drove adjusted EBITDA higher by 26.2% YoY to EUR 74.3m (in line with our call), while net income came at EUR 43.8m, well above our EUR 38.3m call on lower effective tax rate and EUR 1.3m gains from inventory, from EUR 23.5m a year ago. In 9M24 terms, Cenergy recorded sales of EUR 1,260m (up 7.7% y-o-y), EBITDA of EUR 193.8m and Net Profits of EUR 100.3m (112.6% up y-o-y). The order backlog set a new high at EUR 3.48bn from EUR 3.38bn in 1H24, while net debt didn’t drop during the quarter due to increased capex and working capital needs. Finally, CENERGY reiterated the 2024e EBITDA guidance of EUR 245-265m in 2024e.

Outlook: The outlook for the cables segment remains strong, as its order backlog keeps growing and capacity expansions in its facilities progress as planned. In a similar manner, the pipes segment as its order backlog keeps growing and capacity expansions in its facilities progress as planned. In a similar manner, the pipes segment sees the future with optimism, fostered by the recent awards which supported its high backlog, coupled with the capacity upgrades in the HSAW mill.

Optima view: Another strong set of results for Cenergy, on better margins and above our call, as the execution of the huge, accumulated backlog for the higher-margin energy projects supports profitability. Backlog continues to expand, (note that additional sizeable contracts have been secured so far in 4Q24) Looking into 2025, the capacity additions in the submarine cables in Corinth, the upgraded onshore cables plants in Thiva and Eleonas, the new product line in the Pipes segment and also the huge accumulated backlog of EUR 3.48bn (which is further expanded in 4Q24 with new sizeable contracts), point to another strong year, during which is set to record new historically high performance and profitability. That said, we remain positive for the stock, and we reiterate our Buy recommendation with a Target Price at EUR 12.60/share.

Conference call Today at 15.00 local time, Tel nos: Greek participants: +30 213 009 6000 or +30 210 94 60 800, UK participants: +44 (0) 800 368 1063, UK & International: +44 (0) 203 059 5872, USA participants: +1 516 447 5632.

3Q/9M24 Group Key P&L Results

EUR m	3Q23	3Q24	Y-o-Y change	Optima	Acrual vs. Optima	9M23	9M24	Y-o-Y change
Turnover	371.4	448.1	20.6%	432.1	3.7%	1,169.7	1,260.2	7.7%
EBITDA adj.	58.9	74.3	26.2%	74.1	0.3%	145.0	193.8	33.6%
mgn	15.9%	16.6%	73	17.1%	-56	12.4%	15.4%	298
Net Profit	23.5	43.8	86.2%	38.3	14.4%	47.2	100.3	112.6%

Source: the Company, Optima bank research 

MOH || Under Review | CP: 19.50 | TP: U/R

3Q24e results preview | solid quarter, despite the sharp correction of the refining margins and the fire in the CDU

MOH is scheduled to release its 3Q24e results tomorrow, after the close of the market, followed by a conference call the next day at 17:30 local time (15:30 UK time). Excluding inventory effect and one-offs, we expect “adjusted” EBITDA of EUR 196m (-63.6% y-o-y), consensus at EUR 204m, and “adjusted” net income of EUR 80m, lower by 12.7% compared to consensus estimate of EUR 92m from “adjusted” net profits of EUR 375m in 3Q23. Accounting for EUR 58m expected losses from inventory and one-offs, we forecast IFRS EBITDA of EUR 138 (-77.8% y-o-y) and IFRS net losses of EUR 165m (including the EUR 200m impact from the solidarity tax), vs. profits of EUR 441m a year ago. It is reminded that Motor Oil has already declared an interim DPS of EUR 0.30 (DY: 1.5%, ex-date: 23 December). Finally, we see no significant change in the net debt position of the Group during the quarter.

MOH Group 3Q/9M24e Key P&L Estimates

EUR m	3Q23	3Q24e	Y-o-Y change	Optima	Actual vs. Optima	Consensus	Optima vs. Consensus	9M23	9M24e	Y-o-Y change
IFRS EBITDA	623	138	-77.8%	264	-47.7%	152	-9.2%	1158	778	-32.8%
“Adjusted” EBITDA*	538	196	-63.6%	264	-25.8%	204	-3.9%	1140	821	-28.0%
Refining “Adjusted EBITDA”	463	115	-75.2%	196	-41.3%			936	609	-34.9%
Marketing & others Adjusted EBITDA”	54	53	-1.9%	26	103.8%			91	105	15.4%
– Power & Gas EBITDA	25	27	8.0%	42	-35.7%			118	101	-14.4%
IFRS Net Income	441	-165	-137.4%	136	-221.5%	-149	-10.7%	717	194	-72.9%
“Adjusted” Net Income*	375	80	-78.6%	136	-40.8%	92	-12.7%	704	427	-39.3%

Source: Optima bank research, MOH. *Adjusted figures exclude inventory impact

3Q24e Reported Income includes EUR 200m extra tax

Consensus includes median forecasts by 12 analysts following Motor Oil 

OPAP || CP: EUR 14.98 | Rating: Buy | TP:  EUR 19.30

3Q24e preview: Α positive quarter after a long time, in trajectory to meet management guidance  

Solid 3Q24e performance | OPAP will release its 3Q24e results on Wednesday 20 November, AMC, while it will hold a cc the following day (16:00 Athens time). We expect a very strong quarter in terms of top line, with double digit revenue growth driven by strong Betting (supported by EURO 2024 event and new leagues), the outperformance of lottery and the continues outperformance of Online Casino. On the flip side Instant & Passives category continued losing momentum due to strong online competition. As management guided, OpEx started to ease from the reduction in advertising spend as Eurojackpot rollout campaign was tempered. The quarter was marked by a) easy comps 3Q23, which was characterized by unusually high payouts, b) the strong betting (new leagues added) and lottery activity (the 2nd highest Joker Jackpot ever), and c) the continued growth of Online casino with players increasing their engagement levels and betting activity.

3Q24e P&L forecasts | In this context, we forecast revenues (GGR) of EUR 540.3m (vs. EUR 481.0m in 3Q23 +12.3% y-o-y), EBITDA of EUR 188.9m (vs. EUR 142.4m in 3Q23 32.7% y-o-y) and net profits of EUR 109.5m vs. EUR 78.6m in 3Q23 (39.2% y-o-y). On the OpEx side, variable costs (GGR contribution, agents’ fees and direct costs) are seen shaping at EUR 313.7m, accounting for 58.2% of total GGR, while fixed costs (personnel, marketing, other) are estimated to decrease at EUR 106.3m (-7.2% y-o-y); accounting for 19.7% of total GGR vs. 23.8% in 3Q23. Consequently, group’s EBITDA margin is estimated to increase both q-o-q and y-o-y at 35.0% up from 29.6% in 3Q23 (+540bps). We note that we have assumed an income of EUR 59.3m, resulting from the new 10-year lottery/betting license, as well as other operating income/costs (net) from non-gaming operations of EUR 9.7m (almost unchanged vs. last year) in the quarter.

Analysis per segment | Per product category, we see sports betting GGR (retail & online) at EUR 160.1m (up by 11.2% y-o-y) boosted by Euro 2024 and the addition of new leagues. Lottery revenues are estimated to jump at EUR 192.9m (up by 16.2% y-o-y) aided by the record high Joker Jackpot which attracted players, while VLTs GGR is seen flattish at EUR 83.2m, assuming a flat net daily drop of EUR 42 per machine. In respect to Instant & Passives, we expect segmental performance to continue losing momentum, hence we forecast GGR of EUR 22.2m vs. EUR 25.6m in 3Q23 as the category is facing increased competition from online gaming as well as higher average cost per game in comparison to other OPAP games. Finally, the On-line Casino operation is expected to record GGR of EUR 81.9m in 3Q24e (+31.0% y-o-y) continuing to outperform. All in all, we forecast online GGR of EUR 183.7m (+43.5% y-o-y; Stoiximan/OPAP Online GGR: EUR 162m/22m). 

Table 1 | P&L forecasts

EUR m	3Q23	3Q24	y-o-y	9M23	9M24	y-o-y
Betting (Retail+Stoiximan+Online OPAP)	144.0	160.1	11.2%	464.6	510.2	1.9%
Lottery (Retail + Online Loterry)	166.0	192.9	16.2%	532.4	566.0	5.6%
Instant & Passives	25.6	22.2	-13.1%	85.7	74.7	-3.5%
VLTs	82.9	83.2	0.3%	248.3	249.6	2.3%
Online casino (Online OPAP + Stoiximan)	62.5	81.9	31.0%	175.5	222.2	19.0%
Revenues	481.0	540.3	12.3%	1506.5	1622.8	7.7%
GGR tax & levies	-152.7	-171.8	12.5%	-470.0	-514.2	9.4%
Net gaming revenue	328.3	368.5	12.3%	1,036.5	1,108.6	7.0%
Agents fees	-92.9	-98.4	6.0%	-293.3	-300.7	2.5%
Other operating income	24.0	24.6	2.9%	76.6	75.6	1.6%
Other income related to the new lottery/betting concession	57.2	59.4	3.9%	172.6	175.7	1.8%
Other operating costs	-14.6	-14.8	1.8%	-46.4	-45.0	4.0%
Direct costs	-45.0	-44.1	-2.0%	-127.1	-131.4	4.2%
Opex	-114.6	-106.3	-7.2%	-298.3	-320.2	19.5%
EBITDA	142.4	188.9	32.7%	520.5	562.6	8.1%
% of GGR	29.6%	35.0%	540bps	34.6%	34.7%	10bps
Depreciation	-35.0	-36.0	2.9%	-98.2	-102.4	4.3%
EBIT	107.4	152.9	42.4%	422.4	460.2	9.0%
Net financial expense	-3.7	-3.7	0.0%	-8.8	4.4	-149.5%
EBT	103.7	149.2	43.9%	413.6	464.6	12.3%
Income tax	-21.1	-35.8	69.4%	-97.1	-114.1	17.6%
EAT	82.5	113.4	37.4%	316.5	350.4	10.7%
Minorities	-3.9	-3.9	n.m	-8.1	-9.3	14.1%
EAT ex-minorities	78.6	109.5	39.2%	308.4	341.1	10.6%

Source: Optima bank research

Table 2 | Revenue performance per distribution channel (online and offline)

EUR m	3Q23	3Q24	y-o-y
Stoiximan	110.0	162.1	47.4%
OPAP	18.0	21.6	20.1%
Online	128.0	183.7	43.5%
Land based	353.0	356.6	1.0%
Total GGR	481.0	540.3	12.3%

Source: Optima bank research 

Mr. Yannis Vardinoyannis appointed Chairman & Managing Director of Motor Oil

Motor Oil announced that following the passing of its Chairman Vardis J. Vardinoyannis, Mr. Yannis V. Vardinoyannis was appointed Chairman & Managing Director of the company BoD. 

IPTO (in which ADMIE Holdings participates with 51%) launches the Tender of the Corinth – Kos Electrical Interconnection

ADMIE announced that IPTO S.A. launched the tender for the electrical interconnection of Corinth – Kos.  The budget for the cable section of the interconnection amounts to EUR 630m, and EUR 789.1m for the Converter Stations. The duration of the construction phase is set at 36 months from the signing of the contract. 

Competition authority approves concession of Attiki Odos to GEKTERNA

According to Euro2day.gr, the competition authority approved GEKTERNA as the new concessionaire for a 25-year period for Attiki Odos. 

INTRAKAT EGM today

INTRAKAT will hold an EGM today to approve the EUR 200m SCI with the issuance of 43.478.478 shares at 4.60 / share, at a ratio of 0,2709 New Shares for each 1 old share of the Company. 

KRI-KRI 3Q24 results out on 26 November

The company is set to report 3Q24 results on Thursday 26 November after the market close. 

Calendar of Events

Macros

20/11/24 | Current Account Balance SEP (BoG) & Turnover Index in Industry SEP (ELSTAT)

22/11/24 | Fitch – Greek sovereign credit review

28/11/24 | Building Activity AUG (ELSTAT) & Economic Sentiment Indicator NOV

Market

25/11/24 | MSCI Index rebalancing (Aft-mkt)

3Q/9M24 Results Release

20/11/24 | Motor Oil (Aft-mkt), OPAP (Aft-mkt), ElvalHalcor (Aft-mkt), QUEST Holdings (Aft-mkt)

21/11/24 | Ideal Holdings (Bef-mkt)

25/11/24 | Hellenic Exchanges

26/11/24 | Fourlis (Aft-mkt), KRI-KRI (Aft-mkt)

12/12/24 | Attica Bank

EGM / AGM

19/11/24 | Intrakat (EGM)

22/11/24 | ILYDA (EGM)

09/12/24 | Alumil (EGM)

10/12/24 | Cairo Mezz Plc (EGM)

12/12/24 | Attica Holdings (EGM)

24/12/24 | MED (EGM)

Ex-Dividend

02/12/24 | CNL Capital (interim dividend EUR 0.25)

23/12/24 | Motor Oil (interim dividend EUR 0.30)

20/01/25 | HELLENiQ ENERGY (interim dividend EUR 0.20)

Warrants – Attica Bank

08/11/24-28/11/24 | Exercise Period

04/12/24 | Commencement of trading of the warrant exercise shares

 

Research Department
Equity Research

 

Τ: 210 8173 383 F: 210 3279 287 E: [email protected]

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