Greek Market Watch: CPI, MPI, MSCI review (Optima Bank, AlA), Banks, Passenger traffic, OTE, Alpha Services and Holdings, Eurobank, HELLENiQ ENERGY, AVAX

Today’s Headlines

·         Greek CPI up by 3.1% y-o-y in April (ELSTAT)

·         Overall Import Price Index (MPI) increased in March

·         MSCI Quarterly Review | Optima Bank and AlA will be included in Small Cap Index

·         Eurobank Holdings CEO expects systemic banks to distribute dividends for 2023-Press

·         ACI Europe upgrades its forecasts for the performance of European airports

·         OTE 1Q24 results review | 1Q24 In Line, A solid start    

·         Alpha Services and Holdings | 1Q24 results Preview

·         Eurobank Holdings 1Q24 results Preview | A good start to the year  

·         HELLENiQ ENERGY 1Q24e preview | Strong Start driven by core business

·         AVAX analysts briefing

 

Macro Headlines

 

Greek CPI up by 3.1% y-o-y in April (ELSTAT)

According to ELSTAT, CPI (national index) increased by +3.1% y-o-y and by 0.5% m-o-m in April 2024, while the annual average rate of CPI increased by +2.8% over the trailing 12 months. The sectors with the most notable y-o-y movements were Food and non-alcoholic beverages (+5.4%) and Hotel – Cafes – Restaurants (+5.2%). Additionally, the harmonized CPI in April 2024 rose by 3.4% y-o-y (up from 3.2% flash estimate released earlier this month) and increased by 0.9% m-o-m.

 

Overall Import Price Index (MPI) increased in March

According to ELSTAT, the Overall Import Price Index (MPI) in Industry in March 2024 recorded an increase of 1.3% y-o-y, while in March 2023, the MPI had recorded a y-o-y decrease of 12.7%. The 1.3% y-o-y increase of the MPI was mainly driven by the 1.9% y-o-y decrease of the intermediate products sub-index, while on the contrary, the Energy products sub-index rose by 4.2% y-o-y. Over the twelve-month April 2023- March 2024 period, the MPI decreased by 11.6% compared to the April 2022- March 2023 period.

 

Market Headlines

 

MSCI Quarterly Review | Optima Bank and AlA will be included in Small Cap Index

MSCI announced yesterday its quarterly index review, with Optima Bank and Athens International Airport to be included in the Small Cap Index, whilst no changes were made on MSCI Greece Standard. The changes will be effective as of the close of 31 May 2024.

 

Sector Headlines

 

Eurobank Holdings CEO expects systemic banks to distribute dividends for 2023-Press

Reportedly (euro2day), the CEO of Eurobank Holdings stated that he expects systemic banks to distribute up to 30% of 2023 net profits. Recall that banks are waiting for the green light by SSM by early June.

 

ACI Europe upgrades its forecasts for the performance of European airports

The International Council of European Airports predicting that passenger traffic will increase by 3.2% compared to pre-pandemic figures, compared to the initial estimate of a 1.4% increase vs. 2019. Passenger traffic in the European airport network increased by 10.2% y-o-y in March with the increase mainly attributed to international passengers up by +11.7% y-o-y while domestic passengers increased by 5.6%. Greece is in the top three countries with the biggest increase in passenger traffic up by 19.6% y-o-y.

 

Company Headlines

 

OTE || CP: EUR 14.01 | Rating: Neutral | TP: EUR 15.00

1Q24 results review | 1Q24 In Line, A solid start    

Optima View | OTE reported 1Q24 results that came in line with our estimates in terms of adj. EBITDA (AL). The stock is trading 4.7x EV/EBITDA24e, at 26% discount to EU peers. We reiterate our Neutral rating and TP of EUR 15.00/share due to limited upside potential of 7.1%.  

Group P&L | Group revenues reached EUR 877.6m (+9.2% y-o-y), 5% above our estimate of EUR 837.8m and adj. EBITDA AL was shaped at EUR 326.0m (+1.2% y-o-y), in line with our estimate of EUR 328.1m, with the respective margin at 37.1% vs. 40.1% in 1Q23. Reported net profit came in at EUR 134.8m (-0.4% y-o-y), 2% below our estimate of EUR 137.0m.

FCF | The company reported FCF (AL) of EUR 127.1m (-43.8% y-o-y) due to higher tax payments and CapEx (+47.1% y-o-y). Net Debt decreased by EUR 113.8m q-o-q to EUR 521.0m in 1Q24. 

Greece | Revenues rose by 10.3% y-o-y to EUR 812.3m, 5% above our estimate of EUR 772.8m. Retail fixed services were flattish, mobile service revenues grew by 3.3% y-o-y, wholesale revenues advanced by 19.5% y-o-y and other revenues soared by 30.1% y-o-y. Adj. EBITDA (AL) came in at EUR 323.2m (+1.5% y-o-y) with the respective margin at 39.8% vs. 43.3% in 1Q23.

Subscribers | Broadband subscribers increased by 1.1% to 2,358,980 with 456 net additions. The total number of fiber subscribers increased by 5.1% y-o-y to 1,565,013, with 18,614 net additions in the quarter and FTTH subscribers up 73.0% y-o-y to 286,791 with 36,234 net additions. OTE’s total FTTH footprint reached 1,375k homes and should reach 1.8m homes in 2024. Moreover, mobile postpaid subscribers rose by 4.0% y-o-y with net additions at 15,723, whilst prepaid subscribers slipped by 21.6%. TV subscribers rose by 6.0% y-o-y to 687,961 with 39,160 net additions.

Romania | Revenues fell by 4.1% y-o-y to EUR 66.2m, 2% above our estimate of EUR 65.0m due to mobile termination rate cuts and customer-retention promotions. Adj. EBITDA (AL) was shaped at EUR 2.8m (-20.0% y-o-y) with the respective margin at 4.2% vs. 5.1% in 1Q23. Mobile subscribers also slipped by 9.9% y-o-y.

Guidance 2024 | Management reiterated 2024 Free Cash Flow guidance of EUR 470m, impacted by higher cash income tax payments compared to 2023 and CapEx in the range of EUR 610m to EUR 620m for the deployment of its FTTH infrastructure.

Shareholder Remuneration | OTE intends to distribute approximately 95% of its expected 2024 FCF. Total shareholder remuneration is targeted at EUR ca450m, o/w proposed EUR 297m cash dividend (EUR 0.71) and EUR ca153m in share buyback. The stock will trade ex-dividend on 10 July.

Table 1 | Group P & L KPIs

KPIs (EUR m)

1Q24

1Q23

YoY

Optima 1Q24e

vs Optima

Greece

812.3

736.2

10.3%

772.8

5%

Romania

66.2

69.0

-4.1%

65.0

2%

Group revenues

877.6

803.6

9.2%

837.8

5%

Greece

323.2

318.5

1.5%

325.0

-1%

Romania

2.8

3.5

-20.0%

3.1

-10%

Group EBITDA AL

326.0

322.0

1.2%

328.1

-1%

mgn (%)

37.1%

40.1%

39.2%

Group net profit

134.8

135.3

-0.4%

137.0

-2%

source: Company, Optima Research

 

Alpha Services and Holdings || CP: EUR 1.6120 | Rating: BUY | TP: EUR 2.10

1Q24 results Preview

1Q24 results preview | Alpha Services & Holdings is scheduled to report its 1Q24 results on Thursday 16 May, at 08:00 Athens/06:00 London time. Management will host a conference call on the same day at 12:00 Athens/10:00 London time. We anticipate net profit to accelerate on a sequential basis, driven by lower loan loss provisions. Balance sheet dynamics are expected to be in line with system trends, lower loan and deposit balances and organic NPE formation dynamics to remain positive, in line with the previous quarters. 

Bottom line | We forecast 1Q24 reported net profit to reach EUR 189.4m (+57% q-o-q, +70% y-o-y), slightly lower (-2.8%) than consensus estimate of EUR 195.0m. We expect operating income to be marginally lower on a sequential basis (-4% q-o-q, +13% y-o-y), operating costs to be higher (+10% q-o-q, +1% y-o-y) and loan loss provisions to be lower (-21% q-o-q, -4% y-o-y). 

Top line | We estimate net interest income to reach EUR 419.9m (-4% q-o-q, +10% y-o-y), slightly lower than consensus estimate of EUR 422.0m.  The sequential drop is attributed to higher time deposit cost and to the calendar effect. We also forecast fee income to shape at EUR 95.0m (-4% q-o-q, +16% y-o-y), in line with consensus estimate of EUR 94.0m. Thus, we project core income to stand at EUR 514.9m (-4% q-o-q, +11% y-o-y), in line with consensus estimate of EUR 516.0m. We also anticipate non-core revenues at EUR 30.0m (-1% q-o-q, +77% y-o-y), higher than consensus estimate of EUR 25.0m and thus operating income to stand at EUR 544.9m (-4% q-o-q, +13% y-o-y), slightly higher than consensus estimate of EUR 541.0m. 

Pre-provision income | On the cost side, we forecast OpEx to increase to EUR 207.2m (+10% q-o-q, +1% y-o-y) and recurring OpEx to rise by 6.5% q-o-q, owing to higher general expenses (+24.9% q-o-q, 0% y-o-y). Hence, we project pre-provision income to reach EUR 337.7m (-11% q-o-q, +22% y-o-y), slightly higher than consensus estimate of EUR 334.0m. We also expect loan loss provisions to shape at EUR 70.9m (-21% q-o-q, -4% y-o-y), factoring a CoR of 73bps for the quarter and marginally lower than consensus estimate of EUR 72.0m.

Optima view | We should focus on the management’s guidance on the evolution of NII, time deposits mix and beta, fee income as well as on asset quality. The stock is trading 0.58x P/TBV24E, at a material 47% discount to European banks and at 34% discount to its Greek peers, which is unjustified in our view.  We reiterate our Buy rating and TP of EUR 2.10/share, implying a 29.6% upside potential. Following the release of 1Q24 results, we will review and update our FY estimates, target price and recommendation.  

Table 1 | P&L forecasts – Group

(EUR m)

Optima 1Q24e

4Q23

QoQ

1Q23

YoY

Consensus 1Q24e

Optima vs Cons

Net Interest Income

419.9

438.7

-4%

383.5

10%

422.0

-0.5%

Fee income

95.0

99.2

-4%

81.6

16%

94.0

1.1%

Core income

514.9

537.9

-4%

465.0

11%

516.0

-0.2%

Non-core Revenues

30.0

30.3

-1%

16.9

25.0

20.0%

Total revenues

544.9

568.2

-4%

481.9

13%

541.0

0.7%

Operating Expenses

(207.2)

(189.1)

10%

(205.5)

1%

(207.0)

0.1%

Pre Provision Profit

337.7

379.1

-11%

276.5

22%

334.0

1.1%

LLPs

(70.9)

(90.0)

-21%

(73.9)

-4%

(72.0)

-1.5%

Net Profit

189.4

120.7

57%

111.2

70%

195.0

-2.8%

source: Company, Optima Bank estimates, Median Consensus estimates-Company

 

Eurobank Holdings || CP: EUR 2.024 | Rating: BUY | TP: EUR 2.41

1Q24 results Preview | A good start to the year  

Bottom line | Eurobank Holdings is set to report 1Q24 results on Thursday 16 May, post-market close and a conference call will follow at 17:45 Athens/15:45 London Time. Overall, we anticipate a good quarter and reported net profit to reach EUR 297.2m (+86.5% q-o-q, +25.6% y-o-y), on lower loan loss provisions as well as higher income from associates (Hellenic Bank) and despite the low single-digit drop (-2.8% q-o-q) in core income. The results will be burdened by a VES cost of EUR 95.0m announced in early February and thus we forecast net profit before one-offs to shape at EUR 368.5m (+8.5% q-o-q, +44.4% y-o-y). Recall that 4Q23 results were also burdened by one-off costs of EUR 180.4m. Balance sheet dynamics in Greece are expected to be in line with system trends, i.e. lower loan and deposit balances, whilst we anticipate net credit expansion in international operations to remain positive. On top of that, we don’t expect any signs of asset quality deterioration in the quarter.

Top line | We project net interest income to reach EUR 557.3m (-2.7% q-o-q, +10.9% y-o-y), on higher funding costs (time depos, wholesale), fee income to stand at EUR 136.0m (-3.4% q-o-q, +5.2% y-o-y) and thus core income to reach EUR 693.3m (-2.8% q-o-q, +9.7% y-o-y). We forecast non-core revenues of EUR 40.0m (-27.9% q-o-q) and hence operating income to shape at EUR 733.3m (-4.6% q-o-q, +18.3% y-o-y). 

Pre-provision income | On the cost side, we estimate that operating expenses will rise to EUR 229.9m (+0.3% q-o-q, +3.8% y-o-y) on higher personnel expenses (+0.5% q-o-q) and flattish G & A and depreciation expenses on a sequential basis. Thus, we expect pre-provision income to reach EUR 503.4m (-6.8% q-o-q, +26.4% y-o-y) and loan loss provisions to shape at EUR 73.0m (-18.9% q-o-q, -2.7% y-o-y), factoring a CoR of 70bps for the quarter.  

Optima view | We should focus on management’s outlook on the evolution of NII, time deposits (mix, cost), fee income, asset quality and balance sheet dynamics in the coming quarters. The stock is trading 1.0x P/TBV24E, at 9% discount to European banks, which is not justified by its higher RoTE profile. Following the release of 1Q24 results, we will review and update our FY estimates, target price and recommendation.

P&L forecasts – Group

(EUR m)

Optima 1Q24e

4Q23

QoQ

1Q23

YoY

Net Interest Income

557.3

572.8

-2.7%

502.5

10.9%

Fee income

136.0

140.8

-3.4%

129.3

5.2%

Core income

693.3

713.5

-2.8%

631.8

9.7%

Non-core Revenues

40.0

55.5

-27.9%

(12.2)

Total revenues

733.3

769.0

-4.6%

619.6

18.3%

Operating Expenses

(229.9)

(229.1)

0.3%

(221.5)

3.8%

Pre Provision Profit

503.4

539.9

-6.8%

398.1

26.4%

Loan Loss Provisions

(73.0)

(90.0)

-18.9%

(75.0)

-2.7%

Reported net profit

297.2

159.4

86.5%

236.5

25.6%

Adjusted net profit*

368.5

339.8

8.5%

255.3

44.4%

source: Company, Optima Bank estimates, *net profit before one offs

 

HELLENiQ ENERGY || BUY | Target Price EUR: 10.70 | CP: EUR 8.67

1Q24e preview | Strong Start driven by core business

HELLENiQ ENERGY is scheduled to report its 1Q24e results tomorrow, after the close of the market, with a conference call scheduled also for tomorrow at 18.30 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 336m (-17% y-o-y on tough comparables and lower by 24.9% q-o-q) and “adjusted” net profits of EUR 177m from EUR 252m in 1Q23. Accounting for the positive impact from inventory and other one-offs of EUR 20m, IFRS EBITDA and net income are seen at EUR 356m and EUR 193m respectively compared to EBITDA of EUR 279m and EUR 155m net profits in 1Q23. Our estimates lie 6% and 3% higher compared to EBITDA adj. and Net profit consensus estimates respectively. It is reminded that HELLENiQ ENERGY has declared a EUR 0.60 final DPS (ex-date: 10 July, DY: 7.0%).

1Q24e Group Key P&L Estimates

EUR m

1Q23

Optima

YoY

Consensus

IFRS EBITDA

279

356

28%

 

“Adjusted” EBITDA*

404

336

-17%

316

refining

366

286

-22%

 

marketing

17

20

18%

 

petchems

15

23

53%

 

RES/other

6

7

17%

 

IFRS Net Income*, **

155

193

24%

 

“Adjusted” Net Income*

252

177

-30%

172

Source: Optima bank, the Company 

* Reported EBITDA estimate assumes EUR 120m revaluation gain from Inventory and EUR 100m loss from CO2 net deficit

** Estimates are compiled based on the contribution from 10 brokerage firms 

 

AVAX analysts briefing

During yesterday’s presentation to analysts; AVAX guided for Revenues growth of 30% to EUR 600m in 2024e, on better margins, and EBITDA of EUR 50-60m. Outlook for construction remains positive, due to the accumulated backlog of EUR 3.3bn, which could further expand in the next months. The company said that the Flyover in Thessaloniki has restarted and is progressing slightly ahead of schedule, while with regards to the Line 4 of the Athens Metro, there were some delays, beyond AVAX’ responsible. Additionally, the company said that it has been pre-qualified for 25 Public-Private partnership projects of EUR 3-4bn. With respect to concessions, AVAX said that the remaining dividends to be received are EUR 1.1bn, EUR 200m in the next 5 years. Finally, the company is also interested for the development of Real Estate projects which offer IRR’s of 12-18% and energy projects offering returns of 10-15%. 

Calendar of Events

Macros

20/05/24 | Turnover Index in Industry MAR

21/05/24 | Current Account Balance MAR & Evolution of Turnover of Enterprises MAR

28/05/24 | Building Activity FEB

30/05/24 | Unemployment Rate APR, Producer Price Index in Industry APR & Economic Sentiment Indicator MAY

31/05/24 | Turnover Index in Retail Trade MAR

31/05/24 | Fitch – Greek sovereign credit review

Results Release

16/05/24 | Alpha Services and Holdings (1Q24) (08:00 GR Time), Eurobank Holdings (1Q24) (Aft-mkt), HELLENiQ ENERGY (1Q24) (Aft-mkt)

20/05/24 | PPC (1Q24) (Aft-mkt)

21/05/24 | Optima bank (1Q24), Fourlis (1Q24) (Aft-mkt)

22/05/24 | ElvalHalcor (1Q24 trading update) (Aft-mkt), QUEST Holdings (1Q24) (Aft-mkt)

23/05/24 | Ideal Holdings (1Q24 trading update) (Bef-mkt), Lavipharm (1Q24 trading update)

27/05/24 | Hellenic Exchanges (1Q24)

28/05/24 | Epsilon Net (1Q24 trading update) (Bef-mkt)

29/05/24 | OPAP (1Q24) (Aft-mkt), Cenergy Holdings (1Q24)

31/05/24 | Austriacard Holdings (1Q24), Attica Bank (1Q24)

EGM / AGM

15/05/24 | Alpha Trust Holding (AGM), Revoil (AGM)

17/05/24 | Trastor REIC (AGM), Entersoft (AGM)

21/05/24 | Coca-Cola HBC (AGM)

22/05/24 | Jumbo (AGM), REDS (EGM)

23/05/24 | Optima bank (AGM), ElvalHalcor (AGM), Motodynamics (AGM)

28/05/24 | Viohalco (AGM), Cenergy (AGM)

29/05/24 | Intracom (AGM), Attica Group (AGM), Thrace Plastics (AGM), Karelias (AGM)

30/05/24 | Intralot (AGM)

31/05/24 | Ellaktor (AGM), Profile (AGM), Quality & Reliability (EGM)

03/06/24 | Euroconsultants (AGM), Orilina Properties (EGM)

04/06/24 | Mytilineos (AGM)

05/06/24 | Intercontinental International REIC (AGM)

06/06/24 | Ideal Holdings (AGM)

10/06/24 | Galaxy Cosmos Mezz Plc (AGM)

11/06/24 | Prodea Investments (AGM)

12/06/24 | AVAX (AGM)

13/06/24 | Hellenic Exchanges (AGM), Quest Holdings (AGM)

14/06/24 | Trade Estates (AGM)

17/06/24 | Loulis Food (AGM)

19/06/24 | Motor Oil (AGM), Viokarpet (AGM), Iktinos (AGM)

20/06/24 | Terna Energy (AGM), AS Company (AGM)

21/06/24 | Fourlis (AGM), Elton (AGM)

25/06/24 | GEK TERNA (AGM)

27/06/24 | HELLENiQ ENERGY (AGM), PPC (AGM), LAMDA Development (AGM), Elastron (AGM), Space Hellas (AGM)

28/06/24 | Piraeus Financial Holdings (AGM), OTE (AGM), Epsilon Net (AGM), EKTER (AGM)

02/07/24 | Intrakat (AGM)

03/07/24 | ADMIE Holding (AGM)

04/07/24 | Piraeus Port (AGM), Alumil (AGM), Elinoil (AGM)

05/07/24 | ILYDA (AGM)

09/07/24 | Austriacard Holdings (AGM), KRI-KRI (AGM)

10/07/24 | Attica Bank (AGM)

11/07/24 | EYDAP (AGM)

23/07/24 | Eurobank Holdings (AGM)

25/07/24 | Alpha Services and Holdings (AGM)

Ex-Dividend

20/05/24 | Aegean Airlines (EUR 0.75), Alpha Trust Holding (EUR 0.55), Revoil (EUR 0.048)

21/05/24 | Athens Airport (EUR 0.33)

03/06/24 | Thrace Plastics (rem. EUR 0.17), Karelias

04/06/24 | Profile

05/06/24 | Attica Group (EUR 0.07)

14/06/24 | Prodea Investments

19/06/24 | Trade Estates

25/06/24 | Optima bank (EUR 0.44), Titan Cement (EUR 0.85), Hellenic Exchanges (EUR 0.24), ElvalHalcor (EUR 0.04), Viohalco (EUR 0.12), Cenergy (EUR 0.08), Quest Holdings (EUR 0.22), Intracom (EUR 0.12), Intercontinental International

26/06/24 | Motor Oil (rem. EUR 1.40), Mytilineos (EUR 1.50), Fourlis (EUR 0.12)

01/07/24 | Loulis Food

04/07/24 | OTE (EUR 0.71)

05/07/24 | Trastor REIC (EUR 0.02)

08/07/24 | EKTER

10/07/24 | HELLENiQ ENERGY (rem. EUR 0.60), Jumbo (EUR 1.00), AS Company

16/07/24 | Austriacard Holdings, Epsilon Net

18/07/24 | ILYDA (EUR 0.02)

22/07/24 | PPC, EYDAP (EUR 0.10), Space Hellas

29/07/24 | Piraeus Port (EUR 1.34), AVAX (EUR 0.03)

22/08/24 | KRI-KRI (EUR 0.35)

02/09/24 | ADMIE Holding

Ex-Capital Return

25/06/24 | OPAP (EUR 0.25)

02/07/24 | Intracom Holdings

25/07/24 | Ideal Holdings

28/08/24 | GEK TERNA` 

Research Department
Equity Research

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

32 Aigialeias & Paradissou str., 15125, Maroussi optimabank.gr

Ακολουθήστε το στο Google News και μάθετε πρώτοι όλες τις ειδήσεις
Δείτε όλες τις τελευταίες Ειδήσεις από την Ελλάδα και τον Κόσμο, στο