Greek Market Watch: Eurobank Holdings, HELLENiQ ENERGY, NBG, PPC, Aegean Airlines, Lamda Development

Today’s Headlines

·         Eurobank Holdings 1Q24 results review | A strong quarter, Reiterate BUY

·         HELLENiQ ENERGY 1Q24 results – Estimates in line with our estimates

·         Government to examine the disposal of HFSF’ stake in NBG post Euro elections

·         PPC 1Q24e Preview – Strong quarter, in trajectory to meet the annual Recurring EBITDA guidance

·         Aegean Airlines boosts its flight schedule with a 6% increase in ASKs for the summer season (Press)

·         Aegean Airlines ex-dividend on Monday 20 May

·         Lamda Development announced the signing of a Long-Term Land Lease Agreement with CGS for the development and operation of an education institution in the Ellinikon

Market Comment

ATHEX headed dropped marginally yesterday, outperforming however the European markets. In more detail, the General Index eased by 0.13% at 1,491.71 units, (FTSE Large Cap: +0.05%, FTSE Mid Cap: +0.25%, Banks Index: +0.16%) and the traded value was shaped at EUR 126.4m, down from Wednesday’s EUR 135.4m. We expect the international trends to set the tone, with Eurobank in focus today. 

Company Headlines 

EUROBANK HOLDINGS || CP: EUR 2.10 | Rating: BUY | TP: EUR 2.41

1Q24 results review | A strong quarter, Reiterate BUY

Optima View | Eurobank delivered a strong set of results that beat Optima and consensus estimates on slightly better than expected NII, higher non-core revenues and slightly lower loan loss provisions. 1Q24 core operating profit of EUR 407m indicates that Eurobank is on track to beat FY guidance of EUR >1.5bn. The stock is trading 1.0x P/TBV24e, at 9% discount to EU banks, which is not justified, in our view, given its higher RoTE profile. We reiterate our Buy rating and TP of EUR 2.41/share.

P & L | Adjusted net profit came in at EUR 383.1m (+13% q-o-q, +50% y-o-y), 4% above Optima estimate of EUR 368.5m and 19% above consensus estimate of EUR 322.8m.SEE operations adjusted net profit came in at EUR 145m and accounted for 37.7% of group’s profits. Reported net profit reached EUR 287.2m (+80% q-o-q, +21% y-o-y), 4% below Optima estimate of EUR 297.2m, on higher than expected tax. The results burdened by restructuring costs of EUR 95.9m, regarding the VES completed in February. Net interest income was shaped at EUR 571.1m (0% q-o-q, +14% y-o-y), 2% above Optima estimate of EUR 557.3m and consensus estimate of EUR 559.4m. NIM narrowed by just 3bp q-o-q to 2.87%. Fee income came in at EUR 135.6m (-4% q-o-q, +5% y-o-y), in line with estimates. Core income reached EUR 706.7m (-1% q-o-q, +12% y-o-y), in line with estimates. Non-recurring revenues stood at EUR 47.7m (-14% q-o-q), 19% above Optima estimate and 138% above consensus estimate. Total revenues reached EUR 754.4m (-2% q-o-q, +22% y-o-y), 4% higher than Optima and 7% higher than consensus estimate. Opex stood at EUR 228.8m (0% q-o-q, +3% y-o-y), in line with estimates. Pre-provision profit came in at EUR 525.6m (-3% q-o-q, +32% y-o-y), 4% above Optima estimate of EUR 503.4m and 7% above consensus estimate of EUR 491.2m.  Loan loss provisions amounted to EUR 70.9m (-21% q-o-q, -5% y-o-y ), 3% below Optima estimate of EUR 73.0m and 5% below consensus estimate of EUR 74.5m.

(EUR m)

1Q24

4Q23

QoQ

1Q23

YoY

vs. Optima

vs. Cons

Net Interest Income

571.1

572.8

0%

502.5

14%

2%

2%

Fee income

135.6

140.8

-4%

129.3

5%

0%

-1%

Core income

706.7

713.5

-1%

631.8

12%

2%

1%

Non-core Revenues

47.7

55.5

-14%

(12.2)

-491%

19%

138%

Total revenues

754.4

769.0

-2%

619.6

22%

3%

5%

Operating Expenses

(228.8)

(229.1)

0%

(221.5)

3%

0%

0%

Pre Provision Profit

525.6

539.9

-3%

398.1

32%

4%

7%

LLPs

(70.9)

(90.0)

-21%

(75.0)

-5%

-3%

-5%

Adjusted net profit*

383.1

339.8

13%

255.3

50%

4%

19%

Net Profit

287.2

159.4

80%

236.5

21%

-3%

source: Company, Optima bank estimates, Median Consensus estimates-Company, *net profit before one offs

Dividend | The bank submitted the official application to the SSM and the proposed payout ratio is 30%, which corresponds to a dividend EUR >0.09/ share. The supervisory clearance is expected in June and dividend distribution should take place right after the AGM approval in late July.

Asset quality | Group NPEs decreased by EUR 211m q-o-q to EUR 1.3bn, with small positive organic NPE formation (EUR +59m). Thus, the NPE ratio squeezed further to 3.0% from 3.5% in 4Q23 and the NPE cash coverage widened by to 92.6% from 86.4% in 4Q23.

Capital | Tangible equity rose by EUR 273m q-o-q to EUR 7.84bn and TBVPS increased to EUR 2.14 vs. EUR 2.07 in 4Q23. Adj. RoTE widened to 19.9% and FL CET1 to 17.2% from 17.0% in 4Q23. RWAs increased to EUR 44.2bn from 43.2bn in 4Q23.

Balance sheet | Performing loans increased by EUR 400m q-o-q to EUR 41.6bn. Deposits fell by EUR 167m q-o-q to EUR 57.3bn, o/w core depos fell by EUR 526m q-o-q, whilst time depos rose by EUR 376.0m q-o-q. Group time deposits accounted for 35.9% of the deposit base vs. 35.2% in 4Q23. LDR increased marginally to 72.6% vs. 72.3% in 4Q23.       

HELLENiQ ENERGY || BUY | Target Price EUR: 10.70 | CP: EUR 8.655

1Q24 results – Estimates in line with our estimates

Facts: HELLENiQ ENERGY reported 1Q24 “adjusted” group EBITDA down by 16% YoY to EUR 338m on tough comparable  (beating consensus and in line with our estimate), while “adjusted” net income shaped at EUR 164m from “adjusted” net profits of EUR 252m in 1Q23, slightly above our call and consensus due to negative contribution from associates. Accounting for inventory and one-off profits of EUR 12m in 1Q24 vs. inventory and one off losses of EUR 126m in 1Q23, HELLENiQ ENERGY reported IFRS EBITDA of EUR 350m, up by 25% YoY and IFRS net profits of EUR 179m compared to net profits of EUR 155m in 1Q23. As a reminder, HE has already declared a final DPS for FY23 of EUR 0.60 (DY: 7%, ex-date 10 July 2024, payable on July 17 2024).

1Q24 Group Key P&L Results

EUR m

1Q23

1Q24

YoY

Optima

Actual vs. Optima

Consensus

Actual vs. Consensus

IFRS EBITDA

279

350

25%

356

-2%

 

“Adjusted” EBITDA*

404

338

-16%

336

1%

316

7%

refining

366

289

-21%

286

1%

 

marketing

17

16

-6%

20

-20%

 

petchems

15

23

53%

23

0%

 

RES/other

6

10

67%

7

43%

 

IFRS Net Income*, **

155

179

15%

193

-7%

 

“Adjusted” Net Income*

252

164

-35%

177

-7%

172

-5%

Source: Optima Bank, the Company    *excluding inventory effect and one-offs

Domestic refining and trading division: HELLENiQ ENERGY’s realized blended margin (incl. propylene contribution which is reported under Petchems) in 1Q24 remained at high levels of USD 17.7/bbl from USD 16.1/bbl in 4Q23 and USD 22.2/bbl in 1Q23, well outperforming the USD 8.8/bbl benchmark margin, mainly on wider cracks. The refinery utilization rate in 1Q24 was 109% vs. 102% a year ago. Sales volume was consequently up by 7% YoY to 4.26m tons, driven by an 11% YoY rise in exports sales to 2,465 tons. All in, 1Q24 “adjusted” EBITDA remained at high levels of EUR 289m (vs. EUR 366 a year ago).

Marketing: Domestic demand in 1Q24 rose by 2% YoY driven by higher by 5% diesel demand and automotive +3%. Jet fuel demand was also up by 19% YoY, while bunkering demand also rose by 9% YoY. Consequently, domestic EBITDA rose to EUR 3m (from EUR 0m last year), despite the cap on retail margins which continue to weigh on profitability, while international marketing EBITDA was down by 20% YoY to EUR 13m.

Petrochemicals: Stronger PP margins led to increased petchems contribution, with Adj. EBITDA up by 56% YoY at EUR 23m in 1Q24.

Power & gas (equity consolidation): Elpedison’s EBITDA contribution in 1Q24 was weak at EUR 4m from EUR 20m in 1Q23 on lower thermal generation and spark spreads, while DEPA contribution was negative.

RES: segmental profitability in 1Q24 shaped at EUR 11m (from EUR 10m a year ago), driven by the expansion of installed capacity weaker to 381MW by 1Q24-end (from 341MW a year ago), which more than offset the softer load factors for PVs.

FCF & Net debt: FCF in 1Q24 was weak at EUR 6m from FCF of EUR 611m in 1Q23 on increased working capital needs due to the disruption in trade flows in the Middle East, EUR 114m taxes and increased investing outflows of EUR 77m. After paying EUR 90m for dividends and EUR 28m for interest expenses, group net debt (excluding leasing liabilities) rose by 123m y-t-d in 1Q24 to EUR 1.75bn.

Conference call comments: a) Management maintains positive outlook, b) margins in April-May normalized compared to 1Q24, but remain at healthy levels, c) RES capacity currently at 381MW, total portfolio 4.7GW, 700MW under development, expects operating capacity close to 600MW by 2024 end, 1GW by 2025-end and >2GW by 2030, d) EUR 200-250m Capex for the refinery and in 2024 e) uncertainty over the dispute of DEPA with Gazprom, which claims compensation for Gas contract violations f) expects WC normalization in the next months. 

Government to examine the disposal of HFSF’ stake in NBG post Euro elections

Reportedly (euro2day), the government will scrutinize post the elections whether the disposal of the stake of HFSF (18.39%) in National Bank of Greece will take place in July or in early autumn, depending on the outcome of Euro elections and market conditions. The same reports suggest that HFSF might hold a minimum 5.0% stake. 

PPC || BUY | CP: EUR 11.65 | TP: 17.40

1Q24e Preview – Strong quarter, in trajectory to meet the annual Recurring EBITDA guidance

PPC is scheduled to release its 1Q24 results on Monday, May 20th, post market close, with a conference call scheduled also for Monday 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). We expect Group turnover of EUR 1,865 (-6.4%% YoY, of which EUR 485m from Romania) and recurring EBITDA of EUR 436.3m (+53.3% YoY, supported by the EUR c80m contribution from Romania). Assuming no one-offs, we forecast IFRS EBITDA of EUR 436.3m (vs. EUR 284.6m last year) and net profits (also excluding one-offs) of EUR 103.9m, (also supported by Romania), compared to net profits of EUR 55m in 1Q23. It is reminded that PPC has already declared a EUR 0.25/share dividend for FY23 (DY: 1.9%, ex-date: 22 July).

1Q24e key P&L forecasts

EUR m

1Q23

1Q24e

Y-o-Y change

Turnover

1,992.8

1,865.0

-6.4%

Opex

1,708.2

1,428.7

-16.4%

Recurring EBITDA

284.6

436.3

53.3%

Source: Optima bank, The Company, Bloomberg Consensus

 

Aegean Airlines boosts its flight schedule with a 6% increase in ASKs for the summer season (Press)

According to newmoney.gr, the airline’s summer flight schedule consists of c. 13.4m seats (+6% ASKs compared to the 2023 season) with the additional seats allocated in both the international and domestic network, while a significant part of the increase is also allocated beyond the high season to mitigate seasonality. For April and May Aegean has offered increased seats by 12-14%. 

Aegean Airlines ex-dividend on Monday 20 May

The stock will trade ex-dividend of EUR 0.7514 per share on Monday 20 May (DY: 5.7%) 

Lamda Development announced the signing of a Long-Term Land Lease Agreement with CGS for the development and operation of an education institution in the Ellinikon

LAMDA Development announced the signing of a 30-year Lease Agreement with the option to extend for an additional 30 years with COSTEAS – GEITONAS SCHOOL private school, for the development and operation of a modern primary and secondary education institution in the Metropolitan Pole of Elliniko – Agios Kosmas.  The opening of CGS at The Ellinikon is expected in September 2027. 

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

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)

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), Intercontinental International REIC (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 0.5629), Revoil (EUR 0.0485)

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 (EUR 0.20)

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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