Greek Market Watch: MSCI, OTE, Cenergy, GEKTERNA, Jumbo, Aegean Airlines, QUEST

Greek Market Watch: MSCI, OTE, Cenergy, GEKTERNA, Jumbo, Aegean Airlines, QUEST

Market Comment

ATHEX headed south yesterday after four consecutive sessions with gains, in line with the European markets. In more detail, the General Index dropped by 0.54% at 1,476.12 units, (FTSE Large Cap: -0.70%, FTSE Mid Cap: -0.51%, Banks Index: -0.46%) and the traded value was shaped at EUR 120.6m, up from Friday’s EUR 112.2m. We expect the market to try to move higher today. MSCI will announce its quarterly index review tonight. 

Today’s Headlines

·         MSCI will announce its quarterly index review tonight

·         OTE 1Q24 results Preview | Higher top line but bottom line almost flat y-o-y   

·         Cenergy’s CPW granted a contract for the production of 39km pipes

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

·         Jumbo corrected Greek April’s sales growth to 13% from 9%

·         Aegean Airlines will trade ex-dividend on Monday 20 May

·         QUEST close to finalize the sale of ACS (press) 

Market Headlines 

MSCI will announce its quarterly index review tonight

MSCI is scheduled to announce its quarterly indices review tonight.  

Company Headlines 

OTE || CP: EUR 14.09 | Rating: Neutral | TP: EUR 15.00

1Q24 results Preview | Higher top line but bottom line almost flat y-o-y   

1Q24 results preview | OTE is set to release 1Q24 results today, before the opening of the market and management will host a conference call on the same day at 13:00 Athens/ 11:00 London Time. We expect a solid quarter, driven by an improvement on top line in Greece, but bottom line to increase marginally. 

P & L | We project 1Q24 group revenues of EUR 837.8m (+4.1% y-o-y), adj. EBITDA after leases of EUR 328.1m (+1.4% y-o-y), and the respective margin to squeeze by 100bps to 39.2% vs. 40.2% in 1Q23. We also expect net profit for the year to shape at EUR 137.0m (+0.1% y-o-y).  On the cost side, we expect OpEx to rise by 7.6% y-o-y and to reach EUR 498.8m, due to higher other op. expenses because of higher ICT revenues and energy costs. We have also assumed: a) depreciation expenses of EUR 160.7m (0% y-o-y), b) net financial expenses of EUR 2.3m and the effective tax rate at 23.0% vs. 22.8% in 1Q23.

Greece | We expect revenues to increase by 5.0% y-o-y to EUR 772.8m, on the back of higher top line from wholesale services (+4% y-o-y), mobile (+1.0% y-o-y) and other-ICT revenues (+20.0%). On the cost side, we anticipate OpEx to rise by 7.6% y-o-y due to higher other OpEx for the aforementioned reasons and a VES cost of EUR 7.0m. Hence, we estimate that adj. EBITDA (AL) will reach EUR 325.0m (+2.1% y-o-y), pointing to a profitability margin of 42.1% vs. 43.3% in 1Q23. Recall that international transit traffic revenues have zero margin. 

Romania | We project revenues to reach EUR 65.0m (-5.8% y-o-y), on lower mobile service revenues (-5.6% y-o-y) and adj. EBITDA (AL) to stand at EUR 3.1m (-11.5% y-o-y), pointing to a profitability margin of 4.8% vs. 5.1% in 1Q23.

Optima view | The CC will be the last of current CEO Mr. Tsamaz who will be replaced by Mr. Nebis on 01 July 2024 and thus we don’t expect any major announcements until the new CEO takes over, apart from a colour on developments about the disposal of Telekom Romania Mobile. Recall that Mr. Nebis has been the CEO and President of the Management Board of Hrvatski Telekom, Deutsche Telekom majority owned company in Croatia, since April 2019 and prior to Hrvatski Telekom, he held the position of Chief Commercial Officer for Residential Customers in OTE Group and the position of Marketing Director in COSMOTE Greece. OTE is trading 4.8x EV/EBITDA24e, at a material 25% discount vs. EU telcos. Following the recent rally of the stock, we downgrade our recommendation to Neutral from Buy, as our TP points to a limited upside of just 4.4%. 

Cenergy’s CPW granted a contract for the production of 39km pipes

Cenergy announced on its corporate website that it will manufacture and supply 39km steel pipes for an offshore project in the North Sea. The pipes will aim to reduce the carbon footprint of steel pipes produced using reduced CO2 steel certificates, in order to support its customers in reducing their indirect emissions. 

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

According to Energypress.gr, following the recent exit of Macquarie from the tender process for the acquisition of 20% in the Ariadne interconnection, which was replaced by the French Meridiam Europe, two qualified investors, namely GEKTERNA and TERNA SpA also exited the process. Following this development, two qualified investors (namely Merdian and Phaethon Holdings JV and State Grid International) continue in the binding offers phase of the tender for the acquisition of a 20% stake of Ariadne interconnection. 

Jumbo corrected Greek April’s sales growth to 13% from 9%

The company posted a new press release with a correction for April’s sales growth of the parent company to 13% from 9% previously. 

Aegean Airlines will trade ex-dividend on Monday 20 May

We note that Friday 17 May is the last day with the dividend right and the stock will trade ex-dividend on Monday 20 May. (DPS of EUR 0.75/sh, DY: 5.64%). 

QUEST close to finalize the sale of ACS (press)

According to Naftemporiki.gr, ACS is close to finalize the sale of ACS, at an Enterprise Value EUR 300m (Book Value of equity at EUR 70m). 

Calendar of Events

Macros

14/05/24 | CPI APR, Import Price Index in Industry MAR & Evolution of Turnover of Enterprises MAR

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

Market

14/05/24 | MSCI Quarterly Index review announcement (Effective date: June 03, 2024)

Results Release

14/05/24 | OTE (1Q24) (bef-mkt)

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)

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

14/05/24 | Thessaloniki Port Authority (EUR 1.30)

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