Greek Market Watch: OTE Preview, PPC Results, PPC acquisition in Romania, Eurobank cancels own shares, AVAX and METLEN deny merger, INTRAKAT CEO acquires shares, Coca Cola HBC results out today, Ideal Holdings sells Astir Vouliagmenis

Today’s Headlines

·         OTE 2Q24 Preview | All eyes on the CEO statements, Bottom line higher

·         PPC 2Q24 Results – A strong quarter at operating profitability, reiterates EBITDA target of EUR 1.8bn; Acquires a huge RES Portfolio In Romania; Net Debt at EUR 3.8bn, up by EUR 800m y-t-d, with Net Debt/EBITDA at 2.3x, driven by EUR 1.1bn capex

·         PPC acquires a 629MW RES portfolio in Romania

·         Eurobank Holdings cancellation of own shares

·         AVAX and METLEN deny merger rumors

·         INTRAKAT’s CEO acquires additional company shares

·         Coca Cola HBC results out today bmo

·         Ideal Holdings sold Astir Vouliagmennis to Guala Closures

HEADLINES

Company Headlines

OTE || NEUTRAL | CP: EUR 14.80 | TP: EUR 15.10

2Q24 Preview | All eyes on the CEO statements, Bottom line higher  

OTE is scheduled to report 2Q/1H24 results today before the opening of the market and management will host a CC at 13:00 Athens/11:00 London Time. We project group revenues to increase by 6.8% y-o-y to EUR 914.3m, adjusted EBITDA after lease to come in at EUR 328.2m (+0.4% y-o-y) and the respective margin to squeeze to 35.9% from 38.2% in 2Q23 on higher OpEx (+9.2% y-o-y) and net profit to reach EUR 121.9m (+9.0% y-o-y). In 1H24 terms, we forecast group revenues to reach EUR ca1.79bn (+7.9% y-o-y), adjusted EBITDA after lease to come in at EUR 654.2m (+0.6% y-o-y), with the respective margin at 36.5% vs. 39.2% in 1H23 and finally net profit to shape at EUR 263.1m (+12.7% y-o-y).

  source: Company, Optima Research

Company Headlines

PPC || BUY | CP: EUR 11.02 | TP: 17.40

2Q24 Results – A strong quarter at operating profitability, reiterates EBITDA target of EUR 1.8bn; Acquires a huge RES Portfolio In Romania; Net Debt at EUR 3.8bn, up by EUR 800m y-t-d, with Net Debt/EBITDA at 2.3x, driven by EUR 1.1bn capex

Facts: PPC reported in 2Q24 turnover of EUR 2.09bn (+31.5% y-o-y, due to the contribution from Romania and Kotsovolos, which more than offset the on lower energy prices and the market share losses), recurring EBITDA of EUR 467.7m (+51.3% y-o-y, 6.7% above our estimate), Net Profits at EUR 103m, and net profits after minorities at EUR 79m (mainly HEDNO and partnership with RWE). Net debt increased to EUR 3.8bn (2.3x net debt/EBITDA), up by EUR 0.6bn y-t-d driven by large capex of EUR 1.1bn (EUR 231m of which in Romania), remaining however well below the 3-3.5x Net Debt/EBITDA mark. The management reiterated the annual EBITDA guidance of EUR 1.8bn and EUR 350m Net profits after minorities.

1H24 analysis: PPC’s total sales volume in 1H24 rose by c.21.0% y-o-y to 15.2m GWh, driven by the addition of Romania (3.6GWh) and increased electricity demand (+6% in Greece) which offset the c. 8% market share erosion in Greece (50% in 1H24 from 58% a year ago). Consequently, total revenues rose by just 31.5% y-o-y to EUR 4,026bn following the acquisition of ENEL Romania. On the expenditures front, oil-related expenses rose marginally by 0.9% and natural gas costs by 7.2%, (driven by higher volumes which more than offset the lower gas prices (TTF gas futures at EUR 29.5/MWh in 1H24 vs. EUR 44.6/MWh in 1H23). Driven by lower thermal generation and CO2 prices, CO2 costs dropped by 8.2% y-o-y to EUR 362m in 1H24. Additionally, the lower average DAM in 1H24 drove energy purchase costs lower by 39.5% y-o-y to EUR 658.4m. Moreover, personnel costs (including Romania) rose by 18.9% y-o-y to EUR 440.9m, and finally, bad debt provisions in 1H24 rose to EUR 116.1m from EUR 81.5m last year. Below EBITDA, depreciation expenses were up by 45.5% y-o-y at EUR 446.5m (due to the inclusion of Romania and also RES additions), while net financial expenses jumped by 36% y-o-y to EUR 180.5m. FCF generation remained negative in 1H24 at EUR 327m due to the huge capex of EUR 1,100m which more than offset the healthy operating cash flow generation of EUR 713m. Consequently, Group net debt rose by EUR 0.8bn y-t-d to EUR 3.8bn, implying a comfortable net debt/EBITDA of 2.3x.

Divisional profitability split: PPC released also divisional EBITDA figures for the period, with conventional generation, RES and retail combined contribution reaching EUR 520m in 1H24 (vs. EUR 380m last year), while on the other hand Distribution was strong, following by the upwards adjustment of HEDNO’s WACC last May and also the contribution from Romania, contributing EUR 410m EBITDA, vs. EUR 210m in 1H23. In a geographic split, 79% of Group EBITDA generated from the Greek operations, and the remaining 21% from Romania.

Conference call highlights: a) Reiterates EUR 1.8bn EBITDA and EUR 350m Net Profits after minorities targets, b) RES acquisition in Romania was at attractive pricing and reduces significantly the gap between generation and retail in the country, c) Total RES in operation at 1.5GW, (4.7GW including Hydros), 3.3GW under construction or ready to build, on track to meet the 5.5GW (8.9GW including Hydros) RES capacity target by 2026, d) plans to cancel part of treasury shares soon, currently holds 6.3% of total

Conclusion: PPC reported a strong set of results at operating profitability, driven by both domestic and Romanian operations, which in turn allowed the management to reiterate the EBITDA guidance by EUR 100m. Additionally, the investment programme continues as planned, with the main focus in the RES expansion and the distribution network modernization. Looking ahead, the investors focus on the progress of the ambitious investment programme, namely a) in the RES, with projects of 3.3GW currently under development or ready to build, b) the distribution networks in Greece and Romania, c) the completion of the new efficient CCGT in Alexandroupoli, d) the development of the optic fiber network targeting to reach 1.7m households by 2030 and e) the further development of the EV stations. Having said that and taking also into account the positive outlook for 2024e-26e and the attractive valuation (PPC trades at a forward EV/EBITDA of 5x), we reiterate our Buy recommendation on the stock and our TP at EUR 17.40/share.

PPC acquires a 629MW RES portfolio in Romania

PPC announces that it has entered into a binding agreement with Evryo Group, owned by funds managed by Macquarie Asset Management, to acquire their RES portfolio in Romania, which comprises 629MW RES in operation, and about 145MW in pipeline assets. The agreement has a total enterprise value of approximately EUR 700m, and the portfolio will contribute an estimated EBITDA of EUR 100m p.a. upon completion. Closing of the transaction is expected in 4Q24 and is subject to clearance from the relevant antitrust authorities.

Optima View: the acquisition is aligned with the group’s strategy for expansion in SE Europe, offers natural hedge and generation/supply integration in Romania (and possibly in Bulgaria, with a potential acquisition of a local supplier), leverages the opportunities to create value among the countries through the cross border trading in the energy corridor created and takes advantage of the different meteorological conditions and supply/demand dynamics in each region.

Eurobank Holdings cancellation of own shares

The AGM held on 23 July, decided the cancellation of 52,080,673 own shares (1.42% of the total share capital). Following this decrease the share capital of the company is now EUR 806,167,802 divided into 3,664,399,104 common shares. 

AVAX and METLEN deny merger rumors

AVAX and METLEN (Mytilineos) officially denied yesterday press reports regarding a potential merger between the construction arms of Metlen and AVAX groups as completely unfounded.

INTRAKAT’s CEO acquires additional company shares

INTRAKAT announced that Winex Investments Limited (major shareholder and affiliated company with INKAT’s CEO) acquired 110k INKAT shares at EUR 4.80/share on August 5th

Coca Cola HBC results out today bmo

Coca Cola HBC is set to release the 1H24 results today before the market opening with a conference call scheduled for 09.00 BST (11.00 Athens Time). Bloomberg Consensus calls for Revenues of EUR 5,561m (up by 10.1% y-o-y), EBITDA of EUR 870.9m (+13.8% y-o-y) and Net Profits of EUR 419.5m (+8.8% y-o-y).

Ideal Holdings sold Astir Vouliagmennis to Guala Closures

The company announced the completion of the transfer of all shares of Astir to the company Guala Closures. The entreprise Value amounted to EUR 136m while Ideal Holdings received in cash the amount of EUR 115.5m. The net profit of the transaction is estimated at EUR 74m.

CALENDAR OF EVENTS

Macros

09/08/24 | CPI JUL & Industrial Production JUN

12/08/24 | Evolution of Turnover of Enterprises 2Q24 & JUN

14/08/24 | Import Price Index in Industry JUN

20/08/24 | Current Account Balance JUN & Turnover Index in Industry JUN

Market

12/08/24 | MSCI Quarterly Index Review announcement (Effective date: September 02, 2024)

2Q/1H24 Results Release

07/08/24 | OTE (Bef-mkt), Coca-Cola HBC

08/08/24 | Petropoulos, Ideal Holdings (Flash Note) (Bef-mkt)

09/08/24 | BriQ Properties, Intercontintal International

29/08/24 | HELLENiQ ENERGY (Aft-mkt), Austriacard Holdings

02/09/24 | Sarantis

03/09/24 | OPAP (Aft-mkt), Trade Estates (Aft-mkt)

04/09/24 | QUEST Holdings (Aft-mkt)

10/09/24 | Fourlis (Aft-mkt), Athens Airport (Aft-mkt)

11/09/24 | ElvalHalcor (Aft-mkt)

12/09/24 | Alpha Trust Andromeda

17/09/24 | Noval Property

18/09/24 | Cenergy Holdings

19/09/24 | Viohalco, Attica Bank, Alpha Real Estate, Lavipharm

20/09/24 | Premia Properties, Logismos

25/09/24 | ADMIE Holding (Bef-mkt), AS Company (Aft-mkt)

26/09/24 | EYDAP, INTERTECH

27/09/24 | Piraeus Port Authority, Alpha Trust Holdings, Alumil (Aft-mkt), Biokarpet, Ble Kedros, Sunrise Mezz Plc, Thessaloniki Water Supply (Aft-mkt), Orilina Properties, Phoenix Vega Mezz PLC, Trastor REIC

30/09/24 | Epsilon Net (Bef-mkt), Galaxy Cosmos Mezz Plc, Space Hellas, Technical Olympic (Aft-mkt), Athens Medical Center, Interlife, Medicon, Pairis

EGM / AGM

12/08/24 | Ble Kedros (AGM)

20/08/24 | Thessaloniki Water & Sewage Co. (AGM)

04/09/24 | ELVE (AGM), Moda Bagno (AGM)

06/09/24 | Domiki Kritis (AGM)

10/09/24 | Epsilon Net (AGM)

Ex-Dividend

19/08/24 | Ble Kedros

22/08/24 | KRI-KRI (EUR 0.35)

27/08/24 | Thessaloniki Water & Sewage Co.

29/08/24 | Real Consulting (EUR 0.04)

09/09/24 | ADMIE Holding (EUR 0.058)

12/09/24 | Evrofarma (EUR 0.05)

17/09/24 | Epsilon Net

Ex-Capital Return

26/08/24 | Biokarpet (EUR 0.02)

28/08/24 | GEK TERNA (EUR 0.25)

12/09/24 | Unibios (EUR 0.02)

Research Department
Equity Research 

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

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