Mytilineos delivered a satisfactory set of H1:23 results coming ahead of our and consensus estimates on underlying performance and bottom line profitability. The beat is driven by higher energy performance (+15% better than expected) while also AoG had a decent quarter. In more details:
§ Turnover amounted to €2,516m vs. €2,154m in H1:22, marking a 17% increase despite the significant de-escalation of energy and metal prices. EBITDA reached €438 vs. €293m, benefiting from the steady profitability growth of the Energy Sector, and in particular from the Renewable Energy Sources (RES) activity, which contributed the largest share (29%) of the Energy sector EBITDA. In particular M renewables saw saw its profitability to more than double +117% compared to H1 2022. Net profit after taxes and minority interests increased significantly to €268 million, a 61% vs. €166m in the same period of 2022.
§ Energy Sector reported turnover of €1,994m, representing 79% of the company’s total turnover, posting a 22% increase on a year-on-year basis. EBITDA stood at €303m up by 92% vs. €157m in H1:22. Total capacity of the operational and mature Global portfolio of M Renewables, which is expanding in all 5 continents, is ~4.9 GW, while including projects in Early and Middle stages of development, with a capacity of c. 8.5 GW, global portfolio exceeds the 13 GW, representing a total increase of ~4.2GW (or ~46%) during H1 2023. With regards to domestica market share the group has 10.4% in generation and 12.8% in retail. Power projects pipeline remained at the high 1.9bn for the group.
§ Despite significant decline of both premia (over 50%) and aluminum prices (~23%) Metallurgy repeated its historically high levels of profitability. Early Q3 2023 has shown signs of recovery, among others due to the weaker US dollar as well as the prospects for a Chinese driven demand recovery. Metallurgy Turnover was up 4.8% in the first half while EBITDA is marginally lower by 1.4%.
§ Regarding the construction activity, EBITDA of the newly established, spin-off branch of MYTILINEOS amounted to €7 million compared to €5 million in the corresponding period of the previous year. At the end of the first half of 2023, the backlog of infrastructure projects in progress exceeds €550 million, while including projects that are in an advanced stage of contracting, it exceeds €900 million.
§ Net debt at end June at €1.24bn or 1.2x EBITDA. Cash balance remains strong at €0.9bn to fund investments and provide flexibility despite heavy CapEx.
§ Outlook looks strong: The expects financial performance to further strengthen in H2:23, with new investments gradually reaching completion, including the new 826MW power plant and significant investments in Renewable Energy Sources.
- The new assets additions are expected to result in significantly higher levels of profitability, while strong cash flows would allow the realization of those investments and the subsequent increase in turnover while maintaining control over key leverage metrics.
§ Management said that will exceed the €1bn initial guidance EBITDA for the year. Group’s weighted average interest rate cost at 2.75%
§ Operating cash flow for the period stood at €1.46bn. Yet management stated that 1st half is the weakest of the two as the company secures parts of the annual working capital.
§ The Group will announce soon a new addition (M&A) related to AoG. Shares trade at 9.8x 2023 earnings while EV/EBITDA stands at 6.6x.
The following table summarise results vs. our estimates:
|
In million euros |
Q2:22 |
Q2:23 Act. |
y-o-y |
Q2:23 Est. |
vs. est |
H1:22 |
H1:23 Act. |
y-o-y |
H1:23 est. |
vs. est |
|
Metallurgy revenues |
244 |
255 |
4.5% |
220 |
16% |
458 |
480 |
4.8% |
445 |
7.9% |
|
Energy Revenues |
813 |
882 |
8.5% |
943 |
-6% |
1,640 |
1,994 |
21.6% |
2,055 |
-3.0% |
|
Group Revenues |
1,113 |
1,179 |
5.9% |
1163 |
1% |
2,154 |
2,516 |
16.8% |
2,500 |
0.6% |
|
Metallurgy EBITDA |
83 |
62 |
-25.3% |
63 |
-2% |
138 |
136 |
-1.4% |
137 |
-0.7% |
|
Energy EBITDA |
80 |
153 |
91.3% |
133 |
15% |
157 |
303 |
93.0% |
283 |
7.1% |
|
Group EBITDA (reported) |
161 |
214 |
32.9% |
196 |
9% |
293 |
438 |
49.5% |
420 |
4.3% |
|
Group EBITDA margin |
14.5% |
18.2% |
+369 bps |
16.9% |
+130 bps |
13.6% |
17.4% |
+381 bps |
16.8% |
+61 bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
Group Net Profits (reported) |
99 |
125 |
26.3% |
109 |
15% |
166 |
268 |
61.4% |
252 |
6.3% |
|
Group Net margin |
8.9% |
10.6% |
+171 bps |
9.4% |
+123 bps |
7.7% |
10.7% |
+295 bps |
10.1% |
+57 bps |
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