Market Comment
ATHEX headed north yesterday after 5 consecutive sessions with losses, outperforming the European stock markets. In more detail, the General Index rose by 1.31% at 1,384.60 units (FTSE Large Cap: +1.42%, FTSE Mid Cap: +1.00%, Banks Index: +1.64%) and the traded value was shaped at EUR 99.9m, down from Tuesday’s EUR 159.5m. We expect ATHEX to move higher today with Optima bank, Motor Oil and OPAP in the spotlight.
Today’s Headlines
· FTSE ATHEX large cap semi-annual review
· Greek Draft Budget for 2025e sees GDP growth of 2.3% for 2025e (press)
· Current account deficit widens in September (BoG)
· Greece taps additional EUR 250m through the 2034 Bond
· Industrial Turnover index down by 7.9% in September (ELSTAT)
· MOH 3Q24 results review | Solid quarter, despite the weak refining environment and the impact from the fire on the refinery; Bottom line above consensus and Optima due to increased contribution from associates, derivative gains and interest income
· OPAP 3Q24 Results Review | Robust 3Q24 performance, above our call
· National Bank launches a new VRS (press)
· Ellaktor 9M24 results out
· ElvalHalcor 9M24 results out
· Quest Holdings 9M24 results out
· Jumbo Share buyback
Market Headlines
FTSE ATHEX large cap semi-annual review
In the semi-annual index review of the ATHEX, Optima bank is added and Autohellas is removed from in the FTSE/ATHEX large cap index, CENERGY’s investability weight in the FTSE/Large cap index increases to 29% (from 20% previously), NOVAL Property and Autohellas added in the FTSE/ATHEX Mid cap index, replacing Optima bank and Thessaloniki water & sewage. All changes are effective from the session on 23 December.
Macro Headlines
Greek Draft Budget for 2025e sees GDP growth of 2.3% for 2025e (press)
The Greek Finance minister submitted yesterday the draft budget to the Greek Parliament, which expects GDP growth at 2.2% and 2.3% for 2024e and 2025e respectively, primary surplus of 2.5% and 2.4% and deficit of the general government at 0.7% and 0.6% respectively. Additionally, the Debt/GDP ratio is expected to decline from 163.9% in 2023 to 154% in 2024e and 147.5% in 2025e, harmonized Inflation to drop to 2.8% in 2024e and 2.1% in 2025e (from 4.2% in 2023) and unemployment to further drop to 8.7% and 8.2% in 2024e/25e (from 9.4% in 2023).
Current account deficit widens in September (BoG)
According to BoG provisional data, Greece’s current account balance in September 2024 recorded a deficit of 316.5m, vs. a deficit of 260.5m in the same period a year ago, due to the deterioration of the balance of goods which was partly offset by an improvement of the surplus of the services and the primary income account balances. Additionally, in the 9M24 period, the current account deficit widened by EUR 1,046m and stood at EUR 7,666m. Finally, travel receipts in September 2024 stood at EUR 3,579m, up by 7.9% y-o-y, while in the Jan-September 2024 period, travel receipts rose by 4.1% y-o-y to EUR 18,758m.
Comment: The 7.9% higher travel receipts during the month were driven by the increased by 6.6% international tourist flows during the month, and to lesser extent by the c.1.2% higher spending per traveller during the month. However, current account deficit widened y-o-y in September and also 9M24, mainly due to the deterioration of the goods basket, on lower y-o-y exports and higher y-o-y imports.
Greece taps additional EUR 250m through the 2034 Bond
PDMA successfully raised yesterday EUR 250m with the reopening of the on-the run 10-year bond with 3.375% coupon rate, at a final yield of 3.16%, with total amounts offered reaching 957m, at a coverage ratio of 3.83.
Industrial Turnover index down by 7.9% in September (ELSTAT)
ELSTAT has announced that Greece’s Turnover Index in Industry (both domestic and non-domestic market) decreased by 7.9% y-o-y in September 2024 compared to a decrease of 5.3% y-o-y in September 2023 while increased by 5.6% m-o-m. The average Turnover Index in Industry in the October 2023-September 2024 period increased by 1.1% y-o-y compared to a 1.2% y-o-y rise in the respective October 2022-September 2023 period.
Company Headlines
MOH || Under Review | CP: 19.25 | TP: U/R
3Q24 results review | Solid quarter, despite the weak refining environment and the impact from the fire on the refinery; Bottom line above consensus and Optima due to increased contribution from associates, derivative gains and interest income
Facts: Motor Oil reported 3Q24 “adjusted” EBITDA of EUR 198m (-63.2% YoY, -2.9% vs. consensus, +1.0% vs. our estimate) and “adjusted” net profits of EUR 114m (41.9% above our call and +23.9% vs. Consensus). Recording inventory losses of EUR 68m compared to EUR 85m profits in 3Q23, the company reported IFRS EBITDA of EUR 130m compared to EUR 623m in 3Q23 and IFRS net losses (including EUR 202m solidarity tax) of EUR 138m compared to net profit of EUR 441m in 3Q23. FCF in 9M24 was negative at EUR 65m, due to the last tranche of the previous extra tax on the refineries, the EUR 125m cash payment for the acquisition of the remainder 25% of ANEMOS, adverse WC movement of EUR 336m and EUR 155m dividend payments, hence Net Debt was up by EUR 318m y-t-d to EUR 1.84bn. It is reminded that Motor Oil has already declared an interim DPS of EUR 0.30 (DY: 1.6%, ex-date: 23 December). Management will hold a conference call today at 17:30 local time (Greek participants: +30 211 180 2000, UK: +44 (0) 800 368 1063, USA: +1 516 447 5632).
3Q/9M24 P&L Results
|
EUR m |
3Q23 |
3Q24 |
Y-o-Y change |
Optima |
Actual vs. Optima |
Consensus |
Actual vs. Consensus |
9M23 |
9M24 |
Y-o-Y change |
|
IFRS EBITDA |
623 |
130 |
-79.1% |
138 |
-5.8% |
152 |
-14.5% |
1158 |
768 |
-33.7% |
|
“Adjusted” EBITDA* |
538 |
198 |
-63.2% |
196 |
1.0% |
204 |
-2.9% |
1140 |
821 |
-28.0% |
|
Refining “Adjusted EBITDA” |
463 |
125 |
-73.0% |
115 |
8.7% |
|
|
936 |
619 |
-33.9% |
|
Marketing & others Adjusted EBITDA” |
54 |
45 |
-16.7% |
53 |
-15.1% |
|
|
91 |
97 |
6.6% |
|
– Power & Gas EBITDA |
25 |
22 |
-12.0% |
27 |
-18.5% |
|
|
118 |
97 |
-17.8% |
|
IFRS Net Income |
441 |
-138 |
-131.3% |
-165 |
-16.3% |
-149 |
7.4% |
717 |
220 |
-69.3% |
|
“Adjusted” Net Income* |
375 |
114 |
-69.6% |
80 |
41.9% |
92 |
23.9% |
704 |
461 |
-34.5% |
Source: Optima bank research, MOH *Adjusted figures exclude inventory impact
Consensus includes median forecasts by 12 analysts following Motor Oil
Parent (mainly refining): Operating performance in 3Q24 was marked by the weak refining environment, hence MOH’s “clean” refining margin in 3Q24 shaped at USD 9.4/bbl, from USD 14.6/bbl in 2Q24 and the extraordinary USD 21.4/bbl in 3Q23, outperforming benchmark by USD 2.3/bbl (vs. outperformance of USD 4.9/bbl in 3Q23). Refining sales volume was negatively affected by the fire in the distillation unit, down by 9% YoY (no maintenance took place in the quarter) to 3.04m tons and trading sales volume was also weaker, down by 45% y-o-y to 0.32m tons, resulting in total sales of 3.36m tons, exhibiting a 14% y-o-y decrease. Breaking down 3Q24 sales to geographic markets, export sales were weaker, down by 24% y-o-y to 2.19m tons, domestic sales were up by 19.1% y-o-y to 691k tons and bunkering/aviation demand continued to improve, up by 5.7% y-o-y to 481k tons. All in, “adjusted” EBITDA from the refinery operations stood at EUR 125m from EUR 463m in 3Q23. Finally, the refining division recorded a EUR 60m inventory loss (from EUR 80m inventory gain last year).
Marketing: Marketing performance was stronger during the quarter, with increased Jet fuel, Gasoline and Diesel demand (total domestic up by 8.9% y-o-y) which more than offset the weaker heating oil demand. That said, marketing contributed EUR 45m to group “adjusted” EBITDA, 17% of which from the international network vs. EUR 54m in 3Q23.
Power & Gas & other: Power & Gas EBITDA in 3Q24 dropped to EUR 22m (from EUR 25m a year ago), driven by the weaker contribution from NRG and the lower by 14.5% y-o-y RES output, despite the increased installed capacity of 839MW (from 772MW in 3Q23).
Below the EBITDA line: Accounting for higher depreciation of EUR 66m (vs. EUR 59m a year ago), net financials expenses of EUR 13m (aided by gains from derivatives and also interest income), flattish y-o-y, and EUR 21m income from associates in 3Q24 (from EUR 11m income in 3Q23), IFRS and Adjusted Net profits shaped at EUR -139m (including the EUR 202m extra tax) and EUR 114m respectively FCF in 9M24 was negative at EUR 65m, due to the last tranche of the previous extra tax on the refineries, the EUR 125m cash payment for the acquisition of the remainder 25% of ANEMOS, adverse WC movement of EUR 336m and EUR 155m dividend payments, hence Net Debt was up by EUR 318m y-t-d to EUR 1.84bn.
2030 Targets-confirmed compared to a year ago: The company also updated its strategic priorities for 2030, which in a nutshell envisage a) RES installed capacity of 1.6GW by 2027e, >2GW by 2030e (from 872MW currently), b) EBITDA from MORE (mainly RES and NRG) of>EUR 250m (from ~EUR 100m currently), c) installation of >4,000 EV charging stations (from 1,550 currently) d) existing backlog in the environment and waste management business at EUR 110m, market opportunities ~EUR 5bn, e) polypropylene production unit with 160.000 ton capacity to be completed in 2025 and d) >40% EBITDA share from non-fossil operations.
Conclusion: Resilient set of results for Motor Oil, taking into account the sharp correction of the refinery environment and the lower output due to the fire damaged CDU, which were to some extent offset by the unique qualities of the refinery (Nelson Index at 12.61) coupled with the recent processing capacity upgrade to 200k bbl/day. Following however the recent deterioration of the outlook of the refining environment and also the fire in the refinery, we are setting Motor Oil under review, and we will soon revert with updated estimates and Target Price.
OPAP || BUY | CP: EUR 15.03 | TP: EUR 19.30
3Q24 Results Review: Robust 3Q24 performance, above our call
Facts: OPAP released strong 3Q24 results, above our estimates. In particular, revenues came in at EUR 565.8m, up by 17.6% y-o-y and slightly above Optima, recurring EBITDA reached EUR 213.2m (beating our call, +23.8% YoY), and recurring net profits of EUR 126.2m (beating our call, 21.5% YoY). Operating expenses decreased by 12.2% y-o-y in 3Q24, confirming management’s commitment for cost normalization within the 2H24 and increased its EBITDA margin to 37.7%, by 190bps y-o-y. The company will hold a conference call today at 16:00 Athens time (Greek participants: +30 211 180 2000, UK participants: +44 (0) 800 368 1063, USA participants: +1 516 447 5632).
OPAP 3Q/9M24 Key P&L Results
|
EUR m |
3Q23 |
3Q24 |
y-o-y |
Optima |
Actual vs. Optima |
9M23 |
9M24 |
y-o-y |
|
Betting (Retail+Stoiximan+ Online OPAP) |
144.0 |
167.1 |
16.1% |
160.1 |
4.4% |
464.6 |
517.2 |
11.3% |
|
Lottery (Retail + Online Loterry) |
166.0 |
200.0 |
20.5% |
192.9 |
3.7% |
532.4 |
573.1 |
7.7% |
|
Instant & Passives |
25.6 |
22.5 |
-11.9% |
22.2 |
1.4% |
85.7 |
75.0 |
-12.5% |
|
VLTs |
82.9 |
83.5 |
0.7% |
83.2 |
0.4% |
248.3 |
249.9 |
0.7% |
|
Online casino (Online OPAP + Stoiximan) |
62.5 |
92.7 |
48.3% |
81.9 |
13.2% |
175.5 |
233.1 |
32.8% |
|
Revenues GGR |
481.0 |
565.8 |
17.6% |
540.3 |
4.7% |
1506.5 |
1648.3 |
9.4% |
|
Recurring EBITDA |
172.2 |
213.2 |
23.8% |
188.9 |
12.9% |
547.3 |
588.7 |
7.6% |
|
% of GGR |
35.8% |
37.7% |
190bps |
35.0% |
|
36.3% |
35.7% |
-60bps |
|
Recurring Net Profit |
103.9 |
126.2 |
21.5% |
109.5 |
15.3% |
329.6 |
348.1 |
5.6% |
|
EPS |
0.226 |
0.334 |
47.7% |
– |
– |
0.846 |
0.970 |
14.7% |
Source: The company, Optima bank
Analysis: Turning to segmental performance, the improved Betting, Lottery and online casino performance drove the strong results, aided by the strong contribution of EURO’24 and the increased gaming agenda, the Tzoker’s Mega jackpot (2nd biggest jackpot in history) and the powerful growth for yet another quarter of online casino with elevated player engagement. It is noted that the online channel continued to grow at a high pace (+17.6% y-o-y) and is now over 30% of total GGR in 3Q24 vs. 26.6% in 3Q23. We note that Instant & Passives is the only category that continued to record notable decrease of 11.9% y-o-y in 3Q24, negatively affected by the Scratch and laiko weak performance and strong online competition. Group’s net debt is at EUR 119.3m (with a solid cash position of EUR 525.3m vs. EUR 487.3 at FY23), with Net Debt/LTM EBITDA at 0.15x (0.18x incl. Leases) with OPAP producing over EUR 75m in FCF in 3Q24.
Revenue performance per distribution channel (online and Land-based)
|
EUR m |
3Q23 |
3Q24 |
y-o-y |
|
Online GGR |
128 |
173 |
35.2% |
|
% of total GGR |
26.6% |
30.6% |
|
|
Land Based GGR |
353 |
392 |
11.0% |
|
% of total GGR |
73.4% |
69.3% |
|
|
Total GGR |
481.0 |
565.8 |
17.6% |
Source: The company, Optima Bank
Comment: Overall, we expect OPAP’s solid performance and profitability recorded in 3Q24 to continue in 4Q24e, the historically strongest quarter of the year, aided by the enriched event sports calendar, while we expect online to continue growing. Also, the lower operating expenses in 4Q24 as the expensive front-loaded promotional campaign of Euro jackpot and Euro’24 have already normalized, will further increase profit margins. Management already stated that OPAP will be able to meet the upper bound of the management’s guidance for an EBITDA of EUR 750-770m. We reiterate our ‘Buy’ rating on attractive risk-adjusted returns and valuation grounds (29% upside potential from current price levels including dividend distributions) and a very attractive investment case (generous dividend, strong FCF, unlevered position).
National Bank launches a new VRS (press)
According to Kathimerini, National Bank launched a new VRS targeting the early retirement of up to 500 employers with a compensation of up to EUR 200k per employer.
Ellaktor 9M24 results out
Ellaktor announced 9M24 comparable revenues of EUR 221.7m (up by 6% y-o-y), EBITDA of EUR 143.8m (+6% y-o-y) and net profits of EUR 64.1m, vs. EUR 47.6m in 9M23. Cash flows from continued operations stood at EUR 78m in 9M24, with Net Cash standing at EUR 359m as of September 30, 2024, up by EUR 57m y-t-d, with total cash position standing at EUR 507m. Regarding outlook, the concessions segment is targeting the participation in PPP and Concession projects with a combined value of approximately EUR 6bn, either independently or through joint ventures.
ElvalHalcor 9M24 results out
ElvalHalcor reported 9M24 revenues of EUR 2,590.5m, up 1.4% y-o-y, EBITDA of EUR 173.2m compared to EUR 144.8m in 9M23 and net income after minorities of EUR 70.9m compared to EUR 33.4m in 9M23. Adjusted for inventory, EBITDA stood at EUR 180m, down 5.1% y-o-y. Sales volume rose by 4.5% YoY, driven by the 7.9% y-o-y increase in the aluminium segment, which more than offset the 3% drop in copper volume sales. Group net debt (including leasing) stood at EUR 691.5, down by EUR 171m y-o-y, supported by the solid operating cash inflows of EUR 192.8m, EUR 121.5m of which WC release and the lower by EUR 24m investing outflows of EUR 43.8m.
Quest Holdings 9M24 results out
The company posted a solid set of results, with revenues reaching EUR 925.9m, up by 12.0% y-o-y vs. EUR 826.9m in 9M23. On the profitability front, EBITDA improved by 8.9% y-o-y to EUR 65.1m vs. EUR 59.8m, while net profit increased marginally by 2.4% y-o-y to EUR 32.7m vs. EUR 31.9m in 9M23. Finally, the group’s net debt position increased to EUR 45.1m vs, EUR 17.0m in FY23 mainly due to the increased working capital needs for the development of commercial activity abroad. In October 2024, the company signed two important strategic agreements. 1) The acquisition of 70% of Benroubi shares for a total consideration of EUR7.2m and an option to buy the remaining 30% in 2027, further strengthening the group’s presence in the small electrical appliances market, and b) the sale of 20% of ACS to GLS for a consideration of EUR 74m with an option to sell the remaining 80% for the amount of EUR 296m. Finally, management stated that, in aggregate, they expect mild growth in sales and profitability for FY24.
Jumbo Share buyback
The company announced that it purchased on 19 November, 30,000 own shares at an average price of EUR 24.1175. The company now holds 406,857 shares or 0.30% of the total share capital.
Calendar of Events
Macros
22/11/24 | Fitch – Greek sovereign credit review
28/11/24 | Building Activity AUG (ELSTAT) & Economic Sentiment Indicator NOV
29/11/24 | Turnover Index in Retail Trade SEP (ELSTAT), Producer Price Index in Industry OCT (ELSTAT) & Unemployment Rate OCT (ELSTAT)
Market
25/11/24 | MSCI Index rebalancing (Aft-mkt)
3Q/9M24 Results Release
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
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)
16/12/24 | Trade Estates (interim dividend EUR 0.047706)
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
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Research Department
Τ: 210 8173 383 F: 210 3279 287 E: [email protected] 32 Aigialeias & Paradissou str., 15125, Maroussi optimabank.gr
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