Today’s Headlines
· Total building activity decreased in May
· Banking System Loans | July 2024
· Banking System Deposits | July 2024
· Ministry of Finance to apply to DG Comp for Hercules III in September-Press
· MOH 2Q24 results review | Another strong quarter, above our call, bottom line further benefited by gains from derivatives
· HELLENiQ ENERGY 2Q24e preview | Another Strong Quarter, driven by core business; Attractive at current levels, despite the extra tax
· CENERGY Holdings Conference call highlights
· HFSF to dispose 8%-10% stake in National Bank of Greece-Press
· Fourlis Group’s agreement with Foot Locker
· Real Consulting trades ex-dividend today
MARKET COMMENT
ATHEX headed south yesterday, reversing earlier gains, underperforming the European stock markets. In more detail, the General Index slipped by 0.50% at 1,425.36 units (FTSE Large Cap: -0.76%, FTSE Mid Cap: +0.04%, Banks Index: -1.73%) and the traded value was shaped at EUR 85.7m, up from Tuesday’s EUR 69.4m. We expect ATHEX to try to move higher today, with Motor Oil in the spotlight.
HEADLINES
Macro Headlines
Total building activity decreased in May
According to ELSTAT, total building activity (private-public), as this is measured by the number of building permits issued, decreased by 19.6% y-o-y in May 2024. In surface and volume terms, building activity decreased by 6.7% and increased by 3.4% y-o-y respectively. In the June 2023-May 2024 period, Greek building activity grew by 13.5% y-o-y in terms of permits, while also increased by 17.6% y-o-y in terms of surface and by 19.2% y-o-y in terms of volume.
Sector Headlines
Banking System Loans | July 2024
|
(EURm) |
May ’24 |
Jun ’24 |
Jul ’24 |
|
Total credit |
192,140 |
194,257 |
193,524 |
|
General Government |
75,641 |
74,593 |
74,999 |
|
Private sector |
116,499 |
119,664 |
118,525 |
|
Corporate |
75,661 |
78,652 |
77,572 |
|
Sole Proprietors |
4,472 |
4,540 |
4,474 |
|
Household |
36,367 |
36,472 |
36,480 |
|
Monthly net flow |
659 |
2,462 |
-1,242 |
|
% y-o-y |
2.7% |
3.7% |
3.7% |
|
Private sector Monthly net flow |
66 |
3,313 |
-1,143 |
|
% y-o-y |
4.8% |
6.1% |
6.4% |
source: BoG
Facts: According to BoG, total credit to the economy (incl. the general government) came in at EUR ca193.5bn in July 2024 (+3.7% y-o-y, negative monthly net flow by EUR 1,242m), due to the negative monthly net flow of the private sector by EUR 1,143m. Loans to the private sector increased by 6.4% y-o-y to EUR 118.5bn.
Comment: Net credit expansion turned negative again after two positive months. In more detail, corporate loans reached EUR ca77.6bn (+10.6% y-o-y, negative monthly flow by EUR 1,066m). Loans to sole proprietors stood at EUR 4.47bn (+0.2% y-o-y, negative monthly net flow by EUR 67m). Moreover, household lending was shaped at EUR 36.48bn (-0.8% y-o-y, negative monthly net flow by EUR 9m). Housing loans came in at EUR 27.38bn (-2.7% y-o-y, negative monthly net flow of EUR 74m). Consumer credit reached EUR 8.87bn (+5.8% y-o-y, positive monthly net flow of EUR 68m). Corporate loans accounted for 65% of private sector loans, household loans for 31% and other loans for the remaining 4%.
Banking System Deposits | July 2024
|
(EURm) |
May ’24 |
Jun ’24 |
Jul ’24 |
|
System Deposits |
197,672 |
201,721 |
200,773 |
|
General Government |
6,767 |
6,926 |
6,649 |
|
Private sector |
190,905 |
194,795 |
194,124 |
|
Corporate |
45,962 |
49,016 |
48,219 |
|
Household |
144,944 |
145,780 |
145,906 |
|
Private Sector Monthly net flow |
303 |
3,826 |
-607 |
|
Private Sector % y-o-y |
2.5% |
2.9% |
2.7% |
|
Private Sector % y-t-d |
-2.0% |
0.0% |
-0.3% |
source: BoG
Facts: BoG announced that system deposits came in at EUR ca200.8bn (+1.4% y-o-y, negative monthly net flow by EUR 868m) in July 2024. General Government deposits reached EUR 6.65bn (-24.6% y-o-y, negative monthly net flow by EUR 261m) and private sector deposits amounted to EUR 194.1bn (+2.7% y-o-y, negative monthly net flow by EUR 607m). Corporate deposits came in at EUR 48.2bn (+4.0% y-o-y, negative monthly net flow by EUR 780m), whilst household deposits reached EUR 145.9bn (+2.2% y-o-y, positive monthly net flow by EUR 173m). Household deposits accounted for 75% of private sector deposits and corporate for the remaining 25%.
Comment: The monthly drop in private sector deposits in July is attributed to corporate deposits. Time deposits posted a positive monthly net flow by EUR 260m and accounted for 19.2% of private sector depos vs. 19.0% in June. Liquidity remains ample, with the LDR at 61.1% vs. 61.4% in June, while the commercial surplus increased further to EUR 75.6bn from 75.1bn in June.
Ministry of Finance to apply to DG Comp for Hercules III in September-Press
Press reports (euro2day) indicate that the Ministry of Finance will submit to DG Comp its application for Hercules III to increase the State guarantees to maximum EUR 3.0bn from EUR 2.0bn previously. The same reports suggest that Hercules III will encompass the NPE securitizations of NBG (Frontier II-NPEs EUR 1.0bn, Frontier III-NPEs EUR 620m), Piraeus Financial Holdings (Sunrise III-NPEs EUR 508m), Eurobank (Leon-NPEs EUR 590m), Alpha Services and Holdings (Gaia I and II, NPEs EUR 1.0bn), project Solar of the four systemic banks (NPEs-EUR 1.2bn) and finally the NPE securitization of Attica Bank (EUR 2.3bn). The news is positive and expected.
Company Headlines
MOH || BUY | CP: 21.62 | TP: EUR 36.70
2Q24 results review | Another strong quarter, above our call, bottom line further benefited by gains from derivatives
Facts: Motor Oil reported 2Q24 “adjusted” EBITDA of EUR 289m (+86.5% YoY, +5.1% vs. consensus, +9.5% vs. our estimate) and “adjusted” net profits of EUR 172m (26.7% above our call and +14.7% vs. Consensus). Recording inventory losses of EUR 5m compared to EUR 27m losses in 2Q23, the company reported IFRS EBITDA of EUR 284m compared to EUR 138m in 2Q23 and IFRS net profit of EUR 168m compared to net profit of EUR 39m in 2Q23. FCF in 1H24 was negative at EUR 26m, due to the last tranche of the previous extra tax on the refineries and also the EUR 125m cash payment for the acquisition of the remainder 25% of ANEMOS, hence Net Debt was flattish y-t-d at EUR 1.57bn. Management will hold a conference call today at 16:30 local time (Greek participants: +30 211 180 2000, UK: +44 (0) 800 368 1063, USA: +1 516 447 5632).
|
MOH Group 2Q/1H24 Key P&L Results |
||||||||||
|
EUR m |
2Q23 |
2Q24 |
Y-o-Y change |
Optima |
Actual vs. Optima |
Consensus |
Actual vs. Consensus |
1H23 |
1H24e |
Y-o-Y change |
|
IFRS EBITDA |
138 |
284 |
106% |
264 |
8% |
265 |
7.2% |
535 |
639 |
19% |
|
“Adjusted” EBITDA* |
155 |
289 |
86% |
264 |
9% |
275 |
5.1% |
602 |
624 |
4% |
|
Refining “Adjusted EBITDA” |
89 |
231 |
160% |
196 |
18% |
|
|
473 |
494 |
4% |
|
Marketing & others Adjusted EBITDA” |
21 |
30 |
43% |
26 |
15% |
|
|
37 |
52 |
41% |
|
– Power & Gas EBITDA |
40 |
27 |
-33% |
42 |
-36% |
|
|
93 |
75 |
-19% |
|
IFRS Net Income |
39 |
168 |
331% |
136 |
24% |
140 |
20.0% |
276 |
359 |
30% |
|
“Adjusted” Net Income* |
52 |
172 |
231% |
136 |
27% |
150 |
14.7% |
329 |
347 |
5% |
Source: Optima bank research, MOH. *Adjusted figures exclude inventory impact
Consensus estimates are provided by the Company and compiled by 11 analysts.
Parent (mainly refining): Operating performance in 2Q24 was once again marked by the favorable refining environment, hence MOH’s “clean” refining margin in 2Q24 shaped at USD 14.6/bbl, compared to USD 15.3/bbl in 1Q24 and USD 14.2/bbl in 2Q23, outperforming benchmark by USD 3.3/bbl (vs. outperformance of USD 6.3/bbl in 2Q23). Refining sales volume was strong, up by 47% YoY (no maintenance took place in the quarter) to 3.14m tons, while trading sales volume was weaker, down by 22% y-o-y to 0.28m tons, resulting in total sales of 3.44m tons, exhibiting a 33% y-o-y increase. Breaking down 2Q24 sales to geographic markets, export sales were the key driver, up by 42.0% y-o-y to 2.35m tons, domestic sales were also up by 21.8% y-o-y to 666k tons and bunkering/aviation demand continued to improve, up by 10.3% y-o-y to 427k tons. All in, “adjusted” EBITDA from the refinery operations stood at EUR 231m from EUR 89m in 2Q23. Finally, the refining division recorded a EUR 5m inventory loss (from EUR 12m inventory loss last year).
Marketing: Marketing performance was stronger during the quarter, with increased Jet fuel, Gasoline and Diesel demand (total domestic up by 3.4% y-o-y) which more than offset the weaker heating oil demand. That said, marketing contributed EUR 30m to group “adjusted” EBITDA, 15% of which from the international network vs. EUR 21m in 2Q23.
Power & Gas & other: Power & Gas EBITDA in 1Q24 dropped to EUR 27m (from EUR 42m a year ago), driven by the weaker contribution from NRG, and to lesser extent the lower by 17% y-o-y RES output, despite the increased installed capacity of 839MW (from 772MW in 2Q23).
Below the EBITDA line: Accounting for higher depreciation of EUR 64m (vs. EUR 60m a year ago), positive net financials of EUR 10m (due to revaluation gains from derivatives which more than offset the financial expenses), vs. expenses of EUR 33m last year and EUR 10m loss from associates in 2Q24 (from EUR 8m income in 2Q23), IFRS and Adjusted Net profits shaped at EUR 168m and EUR 172m respectively. FCF in 1H24 turned negative to EUR 26m (from inflows of EUR 258m in 1H23) due to increased income taxes of EUR 179m and investing outflows of EUR 125m towards the ANEMOS acquisition. Consequently, Group net debt in 1H24 (including leasing) rose by EUR 50m y-t-d to EUR 1.57bn.
Conclusion: 2Q24 was once again once again an extraordinarily strong quarter for MOH, with similar to the trends recorded in 2023, mainly driven by the persistently favorable refining environment during the trailing 28 months. It is noted that this strong trend in the refining environment has to large extent normalized so far in 3Q24e, remaining however at healthy levels, well above the mid cycle average. That said, and taking also into account that MOH currently trades in our numbers at an attractive 3.0x EV/EBITDA and 5.6x P/E for 2024e (including the expected EUR c200m extra tax), we reiterate our ‘Buy’ recommendation.
HELLENiQ ENERGY || BUY | Target Price EUR: 10.70 | CP: EUR 7.06
2Q24e preview | Another Strong Quarter, driven by core business; Attractive at current levels, despite the extra tax
HELLENiQ ENERGY is scheduled to report its 2Q24e results today, after the close of the market, with a conference call scheduled for the same day at 18.00 local time (Tel nos: Greek participants: +30 213 009 6000, UK participants: +44 (0) 800 368 1063, UK & International: +44 (0) 203 059 5872, USA participants: +1 516 447 5632). Excluding inventory effect and one-offs, we expect “adjusted” EBITDA of EUR 244m (+49% y-o-y, 10% above consensus estimate) and “adjusted” net profits of EUR 91m (consensus at EUR 80m) from EUR 26m in 2Q23. Accounting for the negative impact from inventory and other one-offs of EUR 50m, IFRS EBITDA and net income are seen at EUR 194m and loss of EUR 119m (assuming EUR 220m provision for the solidarity tax) respectively compared to EBITDA of EUR 121m and EUR 7m net profits in 2Q23.
HELLENiQ ENERGY 2Q/1H24e Group Key P&L Forecasts
|
EUR m |
2Q23 |
2Q24e |
YoY |
Consensus |
Optima vs. Consensus |
1H23 |
1H24e |
YoY |
|
IFRS EBITDA |
121 |
194 |
60% |
|
|
400 |
544 |
36% |
|
“Adjusted” EBITDA* |
164 |
244 |
49% |
222 |
9.9% |
568 |
582 |
2% |
|
refining |
114 |
185 |
62% |
|
|
481 |
474 |
-1% |
|
marketing |
29 |
30 |
3% |
|
|
45 |
46 |
2% |
|
petchems |
12 |
19 |
58% |
|
|
27 |
42 |
56% |
|
RES/other |
9 |
10 |
11% |
|
|
16 |
20 |
25% |
|
IFRS Net Income*, ** |
7 |
-119 |
nm |
|
|
162 |
60 |
-63% |
|
“Adjusted” Net Income* |
26 |
91 |
251% |
80 |
14.1% |
277 |
255 |
-8% |
Source: Optima bank, the Company
** Assuming a >EUR 200m provision for the solidarity tax
Consensus Estimates are compiled based on the contribution from 11 brokerage firms
CENERGY Holdings Conference call highlights
Key Highlights Include: a) expects leverage to remain at current levels in 2H24, b) EGM for the approval of the SCI at 2nd October, c) US expansion decision supported by the large and dynamic local market, with limited capacity in the country, and further potential from the offshore wind market, d) expected commercial operation of the US plant at the end of 2027, e) medium term EBITDA target of EUR 380-420m excludes US contribution
HFSF to dispose 8%-10% stake in National Bank of Greece-Press
Reportedly (newmoney), HFSF plans to dispose a stake between 8.0% to 10.0% (73.177.212 to 91.471.515 common shares) in NBG at the end of September or early October. Recall that HFSF is the largest shareholder and holds a 18.39% stake or 168.216.117 common shares. We reiterate our Buy rating and TP of 10.84/share, implying a 38% upside potential.
Fourlis Group’s agreement with Foot Locker
Fourlis announced a strategic agreement to acquire Foot Locker’s operation in Greece and Romania and to further expand stores and ecommerce network in South East Europe. Fourlis will acquire the existing network (3 stores and ecommerce in Greece and 3 stores in Romania), while at the same time the Group will enter new markets in SE Europe (Bulgaria, Cyprus, Slovenia, Croatia, Bosnia Herzegovina and Montenegro). The acquisition is estimated to be completed in 1H25.
Real Consulting trades ex-dividend today
The stock is trading ex-dividend today (DPS: EUR 0.04, DY: 1.1%) and payment will commence on Thursday 05 September.
CALENDAR OF EVENTS
Macros
29/08/24 | Unemployment Rate JUL & Economic Sentiment Indicator AUG
30/08/24 | Producer Price Index in Industry JUL & Turnover Index in Retail Trade JUN
02/09/24 | S&P Global Greece Manufacturing PMI AUG
06/09/24 | GDP 2Q:24 (provisional data)
06/09/24 | DBRS – Greek sovereign credit review
13/09/24 | Moody’s – Greek sovereign credit review
Market
30/08/24 | MSCI rebalancing effective date (Aft–mkt)
2Q/1H24 Results Release
29/08/24 | HELLENiQ ENERGY (Aft-mkt), Austriacard Holdings
02/09/24 | Sarantis (Aft-Mkt)
03/09/24 | OPAP (Aft-mkt), Trade Estates (Aft-mkt)
04/09/24 | QUEST Holdings (Aft-mkt)
10/09/24 | Fourlis (Aft-mkt), Athens Airport (Aft-mkt)
11/09/24 | 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
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
03/09/24 | Attica Bank (EGM)
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)
Ex-Dividend
29/08/24 | Real Consulting (EUR 0.04)
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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