Greek Market Watch: EC estimates, Budget execution, Alpha Services and Holdings, Eurobank Holdings, HELLENiQ ENERGY, Piraeus Bank, GEKTERNA, Aegean Airlines, Ideal Holdings, Alpha Trust, Revoil

Market Comment

ATHEX rebounded yesterday, outperforming the European markets. In more detail, the General Index jumped by 1.49% at 1,493.65 units, (FTSE Large Cap: +1.57%, FTSE Mid Cap: +0.49%, Banks Index: +2.12%) and the traded value was shaped at EUR 135.4m, up from Tuesday’s EUR 106.3m. We expect the positive momentum to continue today, with Alpha Bank in focus today. 

Today’s Headlines

·         EC updates its economic estimates for Greece for 2024-25e

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

·         Alpha Services and Holdings 1Q24 results review | 1Q24 Results beat estimates, Reiterate BUY

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

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

·         Piraeus Bank loans to shipping companies exceeded USD 4b in 1Q24 (press)

·         GEKTERNA and TERNA SpA exit the Ariadne interconnection tender process (press)

·         Aegean Airlines dividend payment

·         Ideal Holdings AGM on 6 June to approve EUR 0.20/share capital return 

·         Alpha Trust Holdings to distribute gross dividend of EUR 0.5629 per share

·         Revoil approves a EUR 0.0485/share dividend 

Macro Headlines 

EC updates its economic estimates for Greece for 2024-25e

In its Spring economic forecasts for Greece, EC expects GDP growth of 2.2% for 2024e (slightly lower compared to the previous estimate of 2.3%), well above the EU average growth estimate of 1.0%, and reiterated the respective estimate for 2025e at 2.3%. Regarding Greek inflation, EC expects to shape at 2.8%/2.1% in 2024/25e respectively, marginally up compared to its Winter estimates. Additionally, the EC expects Greece to post a 1.2% general government deficit/GDP in 2024 and 0.8% in 2025, driving the gross public debt/GDP ratio down to 153.9% in 2024e and 149.3% in 2025e, from 161.9% in 2023. Finally, EC expects unemployment to further de-escalate to 10.3% and 9.7% in 2024-25e (from 11.1% in 2023), and current account deficit to drop to 5.2% and 4.8% in 2024-25e (from 5.8% in 2023). 

Central government budget execution January-April 2024 (preliminary)

Facts: According to preliminary MoF data for the central government budget execution on a modified cash basis in January-April 2024, the central government budget recorded a EUR 279 deficit vs. a targeted deficit of EUR 2,699m (based on the 2024 Budget introductory report) and a EUR 789m deficit in the same period in 2023. On a primary basis, the budget recorded a EUR 3,253m surplus vs. a targeted surplus of EUR 631m and a EUR 2,443 surplus in the same period in 2023.

Comment: In more detail, state budget net revenues in Jan-April 2024 shaped at EUR 22,508m, showing an outperformance vs. target of EUR 2,311m. This outperformance was mainly driven by a) the increased tax revenues of EUR 2,155m, after deducting tax refunds and b) the increased PIB revenues of EUR 1,150m, which more than offset the earlier receipt in 2023 of RRF funds of EUR 1.8bn which was supposed to be collected in 2024. Revenues from taxes stood at EUR 20,368m, beating the target by EUR 2,203m, mainly due to the collection in April of the first installment of ENFIA which was estimated to be received in May of an estimated amount of EUR 940m and b) to the better performance of the previous year’s income taxes of an amount of EUR 647m. On the expenditures front, primary budget expenditures shaped at EUR 22,788m, EUR 109m below the target. 

Company Headlines 

ALPHA SERVICES AND HOLDINGS || CP: EUR 1.6405 | Rating: BUY | TP: EUR 2.10

1Q24 results review | 1Q24 Results beat estimates, Reiterate BUY

Optima View | Alpha delivered a robust set of results that beat Optima and consensus estimates on higher than expected non-core revenues and lower LLPs. 1Q24 normalized EPS of EUR 0.09 indicates that Alpha is on track to beat FY guidance of EUR 0.31. The stock is trading just 0.58x P/TBV24e, at a deep 48% discount to EU banks, which is not justified, in our view. We reiterate our Buy rating and expect the stock to head north today. 

P & L | Reported net profit came in at EUR 211.0m (+74.8% q-o-q), the highest since 3Q2007, 11% above Optima estimate of EUR 189.4m and 8% above consensus estimate of EUR 195.0m. Net interest income was shaped at EUR 420.0m (-4.3% q-o-q)in line with Optima estimate of EUR 419.9m and consensus estimate of EUR 422.0m. NIM widened slightly by 10bp q-o-q to 2.3%. Fee income came in at EUR 96.0m (-3.3% q-o-q), broadly in line with estimates. Core income reached EUR 516.0m (-4.1% q-o-q), in line with estimates. Non-recurring revenues stood at EUR 43.0m (+41.9% q-o-q), 43% above Optima estimate and 72% above consensus estimate. Total revenues reached EUR 560.0, (-1.4% q-o-q), 3% higher than Optima and 4% higher than consensus estimate. Opex landed at EUR 204.0m (+7.9% q-o-q), slightly lower than estimates. Pre-provision profit came in at EUR 356m (-6.1% q-o-q), 5% above Optima estimate of EUR 337.7m and 7% above consensus estimate of EUR 334.0m. Loan loss provisions amounted to EUR 63.0m (-30% q-o-q), 11% below Optima estimate of EUR 70.9m and 12% below consensus estimate of EUR 72.0m.  The results burdened by a NPA loss of EUR 6.6m (-71.8% q-o-q) and EUR 3.2m one-off costs in 1Q24 and thus normalized profit after tax stood at EUR 222.0m (+37% q-o-q). 

Asset quality | Group NPEs decreased by EUR 17m q-o-q to EUR 2.22bn, the NPE ratio was flattish q-o-q at 6.0% and the NPE cash coverage widened by 1bps q-o-q to 46%.

Capital | Tangible equity rose by EUR 181m q-o-q to EUR 6.62bn and TBVPS increased to EUR 2.81 vs. EUR 2.74 in 4Q23. RoTE widened to 12.9% vs. 7.6% in 4Q23 and FL CET1 to 14.8% from 14.6% in 4Q23. 

****

Eurobank Holdings || CP: EUR 2.057 | 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 today, 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 8.81

1Q24e preview | Strong Start driven by core business

HELLENiQ ENERGY is scheduled to report its 1Q24e results today, after the close of the market, with a conference call scheduled also for today 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 ENERRGY 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  

*****

GEKTERNA and TERNA SpA exit the Ariadne interconnection tender process (press)

Admie officially announced that two qualified investors, namely GEKTERNA and TERNA SpA also exited the tender process for the sale of 20% in the Ariadne interconnection. As per the same announcement, the deadline for the submission of financial offers expires on 21 June. 

Aegean Airlines dividend payment

Following the AGM’s approval on 30 April the company announced that the gross amount per share now amounts to EUR 0.7514 per share (vs. EUR 0.75/sh), excluding the 174,725 own shares held by the company. The stock will trade ex-dividend on Monday 20 May. (DY: 5.62%) 

Ideal Holdings AGM on 6 June to approve EUR 0.20/share capital return 

Ideal Holdings will hold the AGM on Thursday 6 June to approve among others the distribution of a EUR 0.20/share capital return (yield: 3.3%).   

Alpha Trust Holdings to distribute gross dividend of EUR 0.5629 per share

The AGM of the company decided the distribution of EUR 0.5629 per share. The ex-dividend date is set for Tuesday 20 May. 

Revoil approves a EUR 0.0485/share dividend

During yesterday’s AGM, Revoil approved the distribution of EUR 0.0485/share gross dividend (DY: 2.9%, ex-date: 20 May). 

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 | Motor Oil (1Q24) (Aft-mkt), 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

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

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