Market Comment
ATHEX headed north yesterday, outperforming the European stock markets. In more detail, the General Index jumped by 1.21% at 1,424.77 units, (FTSE Large Cap: +1.30%, FTSE Mid Cap: +1.37%, Banks Index: +1.88%) and the traded value was shaped at EUR 191.2m, up from Wednesday’s EUR 94.6m. We expect the positive momentum to continue in ATHEX today, with HELLENiQ ENERGY and Piraeus Financial Holdings in focus.
Today’s Headlines
· Retail Sales up in December (ELSTAT)
· Greek banks to reduce POS fees on small amounts-Press
· Government gave the green light for the disposal of its whole stake in PFH-Press
· HELLENiQ ENERGY | 4Q23 results – Estimates in line with our estimates, final DPS of EUR 0.60 beats our estimates
· Entersoft delivered a strong set of 2023 results, guides for strong double-digit growth
· Intralot Chairman and CEO purchased shares
· ElvalHalcor FY23 results release date
· Trade Estates’ portfolio value up on 31 December 2023
· Motodynamics Financial Calendar 2024
Macro Headlines
Retail Sales up in December (ELSTAT)
According to the Hellenic Statistical Authority, retail sales (excluding automotive fuel) rose by 8.9% y-o-y in December 2023 (and by 2.0% y-o-y in volume terms), while including automotive fuel, retail sales increased by 7.3% y-o-y. Per main store category, the turnover of the Food sector increased by 13.4% y-o-y, driven by higher prices as sales volume were up by 5.4% y-o-y), while Non-food sector (except automotive fuel) sales were down by 4.9% y-o-y with sales volume also up by 2.2% y-o-y. Finally, the turnover of the Automotive fuel sector decreased by 0.3% y-o-y, with sales volume up by 3.3% y-o-y.
Sector Headlines
Greek banks to reduce POS fees on small amounts-Press
Press reports (euro2day) indicate that Greek banks will reduce in March their POS fees on small amounts even by 50% to 0.10% from current 0.20%, following a request by the Minister of Finance.
Company Headlines
Government gave the green light for the disposal of its whole stake in PFH-Press
Reportedly (euro2day), the Government gave to HFSF the green light in order to sell its whole stake (27% or 337.599.150 shares) in Piraeus Financial Holdings. The same reports suggest that HFSF will convene on Saturday in order to decide about the stake as well as the price. Finally, the same reports indicate that the disposal process will commence on Monday 04 March.
HELLENiQ ENERGY || BUY | Target Price EUR: 10.70 | CP: EUR 8.41
4Q23 results – Estimates in line with our estimates, final DPS of EUR 0.60 beats our estimates
Facts: HELLENiQ ENERGY reported 4Q23 “adjusted” group EBITDA down by 42% YoY to EUR 269m on tough comparable (beating consensus and in line with our estimate), while “adjusted” net income shaped at EUR 111m from “adjusted” net profits of EUR 261m in 4Q22. Accounting for inventory and one off losses of EUR 122m vs. inventory and one off losses of EUR 316m in 4Q22, HELLENiQ ENERGY reported IFRS EBITDA of EUR 147m, flattish YoY and IFRS net losses of EUR 15m compared to net losses of EUR 232m in 4Q22. On a FY23 basis, “adjusted” EBITDA dropped by 23% to EUR 1,237m, while “adjusted” net income reached EUR 606m from EUR 1,006m in FY22. Finally, accounting for inventory and one off losses of EUR 184m vs. inventory and on off losses of EUR 116m in 2022, IFRS EBITDA drop to EUR 1,053m from EBITDA of EUR 1,717m in 2022, with IFRS net income shaping at EUR 478m from net profits of EUR 890m in 2022. The strong profitability paves the way to HE to distribute a final DPS of EUR 0.60 (DY: 7.1%, ex-date 10 July 2024, payable on July 17 2024), on top of the recently distributed interim DPS of EUR 0.30.
4Q/FY22 Group Key P&L Results
|
EUR m |
4Q22 |
4Q23 |
YoY |
Optima |
Actual vs Optima |
Consensus |
Actual vs. Consensus |
FY22 |
FY23 |
y-o-y |
|
IFRS EBITDA |
149 |
147 |
-1% |
184 |
-20% |
|
1,717 |
1053 |
-39% |
|
|
“Adjusted” EBITDA* |
465 |
269 |
-42% |
258 |
4% |
229 |
17% |
1,601 |
1237 |
-23% |
|
refining |
440 |
236 |
-46% |
218 |
8% |
|
1,384 |
1043 |
-25% |
|
|
marketing |
14 |
13 |
-7% |
19 |
-32% |
|
138 |
111 |
-20% |
|
|
petchems |
16 |
8 |
-50% |
12 |
-33% |
|
74 |
43 |
-42% |
|
|
RES/other |
-6 |
14 |
nm |
10 |
40% |
|
5 |
40 |
>100% |
|
|
IFRS Net Income*, ** |
-232 |
15 |
nm |
61 |
-75% |
|
890 |
478 |
-46% |
|
|
“Adjusted” Net Income* |
261 |
111 |
-57% |
133 |
-17% |
93 |
19% |
1,006 |
606 |
-40% |
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 4Q23 remained at high levels of USD 16.1/bbl from USD 20.5/bbl in 3Q23 and USD 25.3/bbl in 4Q22, well outperforming the USD 7.5/bbl benchmark margin, mainly on wider cracks. The refinery utilization rate in 4Q23 was 106% vs. 97% a year ago (4Q22 performance was partially impacted by the shut-down of Thessaloniki refinery for maintenance). Sales volume was consequently up by 11% YoY to 4.18m tons, driven by a 22% YoY rise in exports sales to 2,173 tons. All in, 4Q23 “adjusted” EBITDA skyrocketed to EUR 236m (vs. EUR 440 a year ago). On a FY23 basis, adjusted EBITDA shapes at EUR 1,043m (vs. EUR 1,384m in FY22).
Marketing: Domestic demand in 4Q23 dropped by 10% YoY driven by lower by 35% heating oil demand (automotive +5%). Jet fuel demand was also up by 19% YoY (driven by the full recovery of tourism), while bunkering demand also rose by 13% YoY. Consequently, domestic EBITDA dropped to EUR 1m (from EUR 3m last year), as the cap on retail margins continue to weigh on profitability, while international marketing EBITDA was down by 14% YoY to EUR 14m. On a FY23 basis, Marketing “adjusted” EBITDA contributed EUR 111m, representing a 20% YoY drop.
Petrochemicals: Weak PP margins led to reduced petchems contribution led Adj. EBITDA lower by 48% YoY at EUR 8m in 4Q22, with the FY23 figure also down by 42% to EUR 43m.
Power & gas (equity consolidation): Elpedison’s EBITDA contribution turned negative at EUR 3m from EUR +18m in 4Q22 on lower thermal generation anf natural gas trading, while FY23 EBITDA dropped by 68% to EUR 18m (from EUR 26m in 2022). DEPA contribution was positive at EUR 3m, with 2023 contribution standing at EUR -2m, from +29m in 2022.
RES: segmental profitability in 4Q23 shaped at EUR 8m (from EUR 9m a year ago), driven by weaker load factors, which more than offset the expansion of installed capacity to 356MW by 4Q23-end (from 341MW a year ago)
FCF & Net debt: FCF in 2023 was strong at EUR 726m from FCF of EUR 397m in 2022 on strong operating profitability profitability and favorable WC movement (mainly driven by lower oil prices) which offset the increased investing outflows of EUR 239m vs. EUR 227m last year. After paying EUR 233m for dividends and EUR 128m for interest expenses, group net debt (excluding leasing liabilities) dropped by 315m YoY at the end of 2023 at EUR 1.63bn from.
Conference call comments: a) Management expects strong refining environment to continue in the medium term, margins to remain above the mid-cycle levels, b) RES capacity currently at 356MW, total portfolio 2GW, 700MW under development, expects 1,080MW operating by 2025-end and >2GW by 2030, c) implementing a Hydrotreated Vegetable Oil (HVO) co-processing unit in Thessaloniki, d) expansion in the PP production plant already in progress, e) expects FID for first test drilling for Natural Gas in SW of Crete to be taken in 4Q24
Entersoft delivered a strong set of 2023 results, guides for strong double-digit growth
Group revenues came in at EUR 37.8m (+28% y-o-y), o/w Greece at EUR 31.4m (+28% y-o-y) and Romania at EUR 4.4m (+22% y-o-y), EBITDA came in at EUR 12.7m (+33% y-o-y), with EBITDA margin at 33.6% vs. 32.1% in 2022 and EBT reached EUR 8.8m (+31% y-o-y). Net cash decreased to EUR 2.7m from EUR 3.8m in 2022. Recall that the company invested EUR 5.9m in three acquisitions and distributed dividends of EUR 3.0m. Management guided for strong double-digit organic growth, with revenues up 30-40% and EBITDA up 10% in 2024 as well as is seeking for new acquisition opportunities in both Greece and Romania.
Intralot Chairman and CEO purchased shares
The company announced that the Chairman of the BoD and CEO acquired on 29 February, 420,000 common shares at an average price of EUR 1.224 and a total value of EUR 514,143.97.
ElvalHalcor FY23 results release date
ElvalHalcor will release the FY23 results on Tuesday, 5th March after the market close
Trade Estates’ portfolio value up on 31 December 2023
Trade Estates announced that on 31st December 2023, the fair value of its portfolio, comprising 15 investment properties and participations, amounted to EUR 477m compared to EUR 288m a year ago.
Motodynamics Financial Calendar 2024
The company is set to report FY23 results on Wednesday 20 March, the AGM will take place the following day and the company announced that will it distribute a dividend from 2023 profits.
Calendar of Events
Macros
01/03/24 | Unemployment Rate JAN & S&P Global Greece Manufacturing PMI FEB
07/03/24 | 4Q:23 GDP (provisional data) & 2023 GDP (estimates)
FY23 Results
05/03/24 | ElvalHalcor (Aft-mkt)
06/03/24 | Optima bank (09:30), Cenergy Holdings
07/03/24 | Eurobank Holdings (Aft-mkt), Alpha Services & Holdings, Viohalco, Autohellas
11/03/24 | Sarantis (Aft-mkt)
12/03/24 | National Bank (Bef-mkt), Aegean Airlines (Aft-mkt), Trade Estates (Aft-mkt)
13/03/24 | Titan Cement, OPAP (Aft-mkt)
21/03/24 | Austriacard Holdings, Epsilon Net (Bef-mkt)
27/03/24 | Hellenic Exchanges
28/03/24 | Trastor REIC
03/04/24 | QUEST Holdings (Aft-mkt)
09/04/24 | PPC (Aft-mkt)
EGM / AGM
04/03/24 | Piraeus Port Authority (EGM)
06/03/24 | Fourlis (EGM)
17/04/24 | Aegean Airlines (AGM)
18/04/24 | Autohellas (AGM)
23/04/24 | Sarantis (AGM)
25/04/24 | OPAP (AGM)
Ex-Dividend
19/03/24 | Jumbo (extraordinary cash distribution EUR 0.60/share)
29/04/24 | OPAP
Ex-Capital Return
26/03/24 | Alpha Real Estate Services (EUR 2.20)
|
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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