Market Comment
ATHEX headed south yesterday, in line with the European stock markets. In more detail, the General Index dropped by 0.47% at 1,596.41 units (FTSE Large Cap: -0.49%, FTSE Mid Cap: -0.88%, Banks Index: -0.19%) and the traded value was shaped at EUR 366.3m, up from Monday’s EUR 254.0m. We expect the market to follow the international markets today.
Today’s Headlines
· Paulson & Co. decreased its stake to 14.0% in Piraeus Financial Services
· OTE 4Q/FY24e preview | A soft quarter due to Romania
· HELLENiQ ENERGY 4Q/FY24e preview | Soft quarter, driven by margin correction, in a Solid year; We expect Final DPS of EUR 0.40
· Covalis Capital lowers its participation in PPC
· New law imposes fine to pirate TV users-Press
Company Headlines
Paulson & Co. decreased its stake to 14.0% in Piraeus Financial Services
Piraeus Financial Services announced that Paulson & Co. decreased its stake to 14.0% and holds 170.0m common shares, post the disposal of a 2.8% stake or 35.0m common shares through an accelerated bookbuild at EUR 4.58/share that took place yesterday. Paulson announced that he is committed to remaining a long-term shareholder and participating in Piraeus’ growth and revaluation. Piraeus remains one of our top picks in the sector and we reiterate our Buy rating and TP of EUR 6.20/share.
OTE | BUY | Target Price EUR: 16.50 | CP: EUR 14.76
4Q/FY24e preview | A soft quarter due to Romania
Optima view | OTE is set to release 4Q/FY2024 results on Wednesday 26 February, 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 soft quarter, due to the weak performance of Romanian operations. Nonetheless, we anticipate Q4 performance in Greece to improve further due to higher revenues from Pay TV and the FTTH coupon to stimulate demand. We expect investors to focus on 2025 guidance, remuneration policy as well as the evolution of negotiations with Digi Romania and Vodafone Romania about the disposal of Telekom Romania Mobile. OTE is trading 4.7x EV/EBITDA25e, at a material 29% discount vs. EU telcos.
4Q24 P & L | We forecast 4Q24 group revenues of EUR 923.0m (-0.8% y-o-y), adj. EBITDA after leases of EUR 344.6m (+1.0% y-o-y), and the respective margin to widen to 37.3% vs. 36.7% in 4Q23. We also expect net profit for the quarter to shape at EUR 130.3m (-3.1% y-o-y). On the cost side, we forecast OpEx to rise by 3.6% y-o-y and to reach EUR 537.9m, due to higher other op. expenses because of higher ICT revenues. We have also assumed: a) depreciation expenses of EUR 147.1m (-8.9% y-o-y) and b) net financial expenses of EUR 2.5m.
2024 P & L | We project 2024 group revenues of EUR 3.6bn (+4.0% y-o-y), adj. EBITDA AL of EUR ca1.35bn (+0.4% y-o-y) and net profit of EUR 544.6m (+2.4% y-o-y). We also anticipate CapEx to stand at the high range of guidance, i.e. EUR 610.0m and FCF at EUR 429.1m, in line with the guidance of EUR 435.0m. We estimate remuneration to remain flattish y-o-y at EUR 452.8m, of which EUR 298.8m (66% of remuneration) or EUR 0.72/share in cash dividend (DY: 4.9%) and the remaining 34% or EUR 153.9m in share buyback. Recall that the company distributed EUR 450.0m or 95% of FCF2024.
Greece | We expect Greece to remain the spearhead of growth and top line to advance by 5.0% y-o-y to EUR ca3.35bn, thanks to higher revenues from wholesale services (+5.5% y-o-y), mobile (+2.8% y-o-y) and other-ICT revenues (+20.0%), whilst we anticipate retail services to be flattish due to the common sports platform with Nova and the commencement of the FTTH coupon. On the cost side, we anticipate OpEx to rise by 7.1% y-o-y primarily due to higher other operating expenses. Hence, we estimate that adj. EBITDA (AL) will reach EUR 1.35bn (+1.5% y-o-y), pointing to EBITDA margin of 40.2% vs. 41.6% in 2023.
Romania | We anticipate top line to reach EUR 267.8m (-6.7% y-o-y), on lower mobile service revenues (-17.0% y-o-y) and adj. EBITDA (AL) to stand at just EUR 2.4m vs. EUR 17.0m in 2023, pointing to a profitability margin of 0.9% vs. 5.9% in 2023.
|
KPIs (EUR m) |
Optima 4Q24e |
4Q23 |
YoY |
|
KPIs (EUR m) |
Optima 2024e |
2023 |
YoY |
|
|
||||||||
|
Greece |
857.2 |
854.8 |
0.3% |
|
Greece |
3,348.1 |
3,189.4 |
5.0% |
|
Romania |
68.5 |
77.5 |
-11.6% |
|
Romania |
267.8 |
286.9 |
-6.7% |
|
Group revenues |
923.0 |
930.2 |
-0.8% |
|
Group revenues |
3,608.5 |
3,468.9 |
4.0% |
|
Greece |
342.0 |
337.0 |
1.5% |
|
Greece |
1,345.1 |
1,325.5 |
1.5% |
|
Romania |
2.7 |
4.1 |
-35.1% |
|
Romania |
2.4 |
17.0 |
-86.1% |
|
Group EBITDA AL |
344.6 |
341.1 |
1.0% |
|
Group EBITDA AL |
1,347.4 |
1,342.5 |
0.4% |
|
mgn (%) |
37.3% |
36.7% |
1.8% |
|
mgn (%) |
37.3% |
38.7% |
– |
|
Group net profit |
130.3 |
134.5 |
-3.1% |
|
Group net profit |
544.6 |
531.7 |
2.4% |
source: Company, Optima Bank Research
HELLENiQ ENERGY | NEUTRAL | Target Price EUR: 8.30 | CP: EUR 7.75
4Q/FY24e preview | Soft quarter, driven by margin correction, in a Solid year; We expect Final DPS of EUR 0.40
HELLENiQ ENERGY is scheduled to report its 4Q24e results tomorrow, after the close of the market, with a conference call scheduled for the same day at 18.00 local time (Tel nos: Greek participants: +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 135m (-50% y-o-y) and “adjusted” net profits of EUR 27m from EUR 111m in 4Q23 (assuming depreciation expenses of EUR 84m, increased financial expenses of EUR 32m, and an effective tax rate at 22%). In FY24e terms, we expect Group EBITDA adj. of EUR 888m, down by 28% y-o-y (and EUR 758m accounting from EUR 130m loss from inventory) and Net Profits adj. of EUR 311m, while accounting for inventory loss and the solidarity tax of EUR 175m, Reported Net Profits are expected to shape at EUR 37m (from EUR 478m a year ago). Finally, we expect HE to declare a final DPS of EUR 0.40 (DY: 5.1%, on top of the recently distributed interim DPS of EUR 0.20).
4Q/FY24e Group Key P&L Forecasts
|
EUR m |
4Q23 |
4Q24e |
YoY |
FY23 |
FY24e |
YoY |
|
IFRS EBITDA |
147 |
136 |
-8% |
1,053 |
758 |
-28% |
|
“Adjusted” EBITDA* |
269 |
135 |
-50% |
1,237 |
888 |
-28% |
|
refining |
236 |
111 |
-53% |
1,043 |
674 |
-35% |
|
marketing |
13 |
19 |
43% |
111 |
129 |
16% |
|
petchems |
8 |
5 |
-38% |
43 |
57 |
33% |
|
RES/other |
12 |
8 |
-30% |
40 |
44 |
11% |
|
IFRS Net Income*, ** |
15 |
25 |
63% |
478 |
37 |
-92% |
|
“Adjusted” Net income* |
111 |
27 |
-76% |
606 |
311 |
-49% |
Comment | We expect an improved q-o-q quarter for HELLENiQ ENERGY, driven by the more favorable refining environment. Short term catalysts for the stock are in our view the refining margins outlook, the final DPS, the developments regarding the Hydrocarbons exploration activity (potential FID for test drilling expected in the next few months) and the upcoming placement of the two major shareholders; that said and taking also into account the recent stock appreciation (+21% total return over the last 3 months), and the fact that HE is fairly valued (7.5x in P/E adj. terms for 2025e), we reiterate our EUR 8.30/share Target Price with a Neutral recommendation.
Covalis Capital lowers its participation in PPC
PPC announced that Covalis Capital LLP lowered its total participation in the company’s share capital to 4.97% of total from on 18.02.2025 5.15% on 13.12.2024.
New law imposes fine to pirate TV users-Press
Press reports (capital) suggest that according to the new law that was voted in Parliament, pirate TV users will pay a fine ranging from EUR 750 to EUR 10.000. The same reports indicate that pirate TV users are estimated to be between 600k and 900k and top line loss at least at EUR 125.0m. The news is positive on OTE, as it will increase gradually its pay TV subscriber base.
Calendar of Events
Macros
26/02/25 | Building Activity NOV (ELSTAT)
27/02/25 | Economic Sentiment Indicator FEB
28/02/25 | Producer Price Index in Industry JAN & Turnover Index in Retail Trade DEC
07/03/25 | DBRS – Greece Sovereign Rating review
Market
28/02/25 | MSCI rebalancing (Aft-mkt)
4Q/FY24 Results Release
26/02/25 | OTE (Bef-mkt)
27/02/25 | HELLENiQ ENERGY (Aft-mkt), Eurobank Holdings (Aft-mkt), IDEAL Holdings (Bef-mkt), Noval Property (Aft-mkt)
28/02/25 | National Bank of Greece (Bef-mkt), Alpha Services & Holdings (08:00 GR time), Premia Properties
04/03/25 | ElvalHalcor (Aft-mkt)
05/03/25 | Cenergy Holdings
06/03/25 | Optima bank (Bef-mkt), Viohalco
10/03/25 | Attica Bank (Aft-mkt)
12/03/25 | Sarantis (Aft-mkt), Autohellas (Bef-mkt)
19/03/25 | OPAP (Aft-mkt)
26/03/25 | PPC (Aft-mkt), LAMDA Development (Aft-mkt)
27/03/25 | Titan Cement International
31/03/25 | Hellenic Exchanges (Aft-mkt), AUSTRIACARD Holdings (Aft-mkt)
25/04/25 | Biokarpet
28/04/25 | Alumil
30/04/25 | Motodynamics
EGM / AGM
26/02/25 | Attica Bank (EGM)
06/03/25 | EVROPI Holdings (EGM)
19/03/25 | Jumbo (EGM)
14/04/25 | Piraeus Financial Holdings (AGM), Athens Airport (AGM)
28/04/25 | Sarantis (AGM)
29/04/25 | Optima bank (AGM), OPAP (AGM)
30/04/25 | Eurobank (AGM)
08/05/25 | Titan Cement (AGM)
16/05/25 | Bank of Cyprus (AGM)
27/05/25 | Cenergy Holdings (AGM), Viohalco (AGM)
30/05/25 | National Bank of Greece (AGM)
03/06/25 | METLEN (AGM)
05/06/25 | OTE (AGM), IDEAL Holdings (AGM)
06/06/25 | Premia Properties (AGM)
12/06/25 | Motodynamics (AGM)
18/06/25 | Biokarpet (AGM)
24/06/25 | AUSTRIACARD Holdings (AGM)
25/06/25 | PPC (AGM)
25/07/25 | Alpha Services & Holdings (AGM)
Ex-Dividend
24/03/25 | Jumbo (extraordinary cash distribution EUR 0.4724)
23/04/25 | Athens Airport (EUR 0.78)
02/05/25 | Sarantis
07/05/25 | OPAP
12/06/25 | Premia Properties
01/07/25 | AUSTRIACARD Holdings
03/07/25 | OTE
21/07/25 | PPC
Ex-Capital Return
07/03/25 | IDEAL Holdings (EUR 0.10/share)
24/03/25 | ELLAKTOR (EUR 0.85/share)
|
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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