(1) To χρηματιστηριακό σημειωματάριο του Μικρομέτοχου (02/06/2020)

Daily Monitor 02-06-2020

Stocks ended up, but off intra-day highs, on selective buying. MSCI tale trades (banks and TITC) are potentially behind the soft closing. General index ended at 658.35 points, adding 0.88% to Friday’s 652.58 points. The large-cap FTSE 25 index expanded 0.52% to 1,579.70 points, while mid-caps contracted 0.25%. The banks index improved 1.31%, as the sector continued its recovery following the publication of first-quarter results by the four systemic lenders.  National grabbed 2.07%, Piraeus grew 1.77%, Eurobank advanced 1.58% and Alpha edged up 0.18%. GEK Terna stood out jumping 7.56%, Mytilineos climbed 5.34%, Public Power Corporation rose 5.33%, Motor Oil collected 4.20% and ADMIE Holdings earned 3.42%. In total 63 stocks enjoyed gains, 39 suffered losses and 18 remained unchanged. Turnover amounted to €92.4m, down from last Friday’s €390m.

Selective interest may keep the positive momentum in domestic market, banks in the spotlight after Q1:20 announcements.

Agenda: PPC Q1:20; GEKTERNA FY:20 

Macros 

Greece/GDP Correction: Q1:20 GDP announcement day is Thursday June 4. 

Greece/PDMA: Greece seeks to raise €1bn through the offering of 26-week Treasury-bills on Wednesday, June 3, the debt office said. The auction will be conducted via primary dealers and the government may accept non-competitive bids of up to 30% of the initially offered amount during the auction and another 30% by Thursday, June 4. Settlement will take place Friday, June 5. 

Greece/Economic Sentiment-Consumer Confidence Indices: The economic sentiment indicator took a fresh hit in April as the economic impact from the lockdown measures affected most sectors of the economy exempt constructions, a leading think-tank said on Monday. ‘In any case the deterioration if the economic sentiment underlines the depth of the economic crisis which is expected to have a significant duration and to impact structurally and not only temporarily all the sectors of the economy,” the Economic and Industrial Development or IOBE said.  The economic sentiment index settled at 88.5 points in May, down from 99.3 in March. Consumer confidence sub-index stood at -33.0 points versus -32.6 in the previous month. 

Greece/PMI: Factory activity showed a further market contraction in May as the economy began to reopen following the loosening of lockdowns amid the COVID-19 pandemic, IHS Markt said. “The drop in output was largely driven by weak demand conditions, as clients continued to cancel and postpone new orders. Foreign client demand also fell amid ongoing lockdowns in key export markets,” Markit said. Also, workforce numbers fell markedly as excess capacity increased and pessimism was sustained. Markit’s PMI for manufacturing stood at 41.1 in May, up from 29.5 in April, signaling the second-sharpest deterioration in Greek manufacturing operating conditions since August 2015. 

Greece/Tourism: Lufthansa has announced it is increasing flights between Germany and Greece from June 15, doubling the number of services it provides from Athens to Munich and Frankfurt. “By restoring a part of our flying service in June, the Lufthansa Group is also restoring a part of its activity linking Greece with its global network again. This constitutes an important contribution and support for the restarting of industry and commerce, and mainly tourism for Greece,” stated Tzevelekos, general manager for sales of the Lufthansa Group in Greece and Cyprus. 

Corporate 

Bank of Piraeus (Q1:20 results review): Piraeus Bank reported losses of 232 million euros in the first quarter, after booking loan loss impairments of 438 million euros compared to 186 million euros in the year-ago period. Operating profitability was in line with our estimates, the miss in bottom line is attributed to the increased front-loaded provisioning. It is noted that COVID-19 impact for Q1:20 amounts to €370m (€324m impairments and €46m trading results). The respective impact in the Group’s Financial Statements stands at €351m, excluding €19m profit incurred in trading income. In more details:

§  Net Interest Income in Q1:20 reached €360m, flat y-o-y and 1% lower q-o-q. The €1.3bn new loans that were disbursed in the Q1:20 contributed to the resilience of the top line. Funding costs have been particularly supportive, -14% y-o-y and -11% q-o-q and that, despite the cost of T2 issues. Subsequently, the significant containment of deposit costs and the utilization of the ECB LTRO facilities absorbed the respective costs. Further, new time deposits rate dropped to 23bps in Q1:20 vs 59 bps in Q1:19. ΝΙΜ in Q1:20 stood at 239bps compared to 244bps in Q4:19.

§  Net Fee and Commission Income in Q1:20 increased to €71m, 3% y-o-y, despite a significant fall in transaction volumes in March due to the COVID-19 health crisis. Main contributors to the NFI were new loan generation, as well as bancassurance and asset management. The Bank incurred €46m losses in its trading portfolio due to the disruption in the market because of the COVID-19 crisis post late Feb.2020.

§  OpEx in Q1:20 reached €227m, including the asset management fee paid to the NPE servicer. If this fee is excluded, operating expenses are down 7% y-o-y and 16% q-o-q. The cost-to-income ratio (excluding the COVID-19 trading impact) stood at 50% in Q1:20 vs 56% in Q4:19. Staff costs declined by 11% y-o-y as the Bank reaped the benefits of the carve-out of the NPE servicing platform and the 2019 VES. In all, Piraeus Bank said that is on track to reduce Operating Expenses by a mid single-digit rate in FY.2020, after a 6% recurring decrease in 2019.

§  Pre provision income reached €185m in Q1:20 and €231m excluding trading losses related with COVID-19, from €214m a year ago, an increase of 8% y-o-y. In addition, NII plus NFI minus recurring OpEx in Q1:20 stood at €204m, 3% higher y-o-y and 11% q-o-q.

§  The Q1:20 loan impairment charges stood at €438m from €186m during the same period last year. The significant increase in impairment charges in Q1:20 is attributed to the recalibration of the IFRS9 models to incorporate the much worse macro scenarios in light of the COVID-19 pandemic. Cost of risk as a percentage of net loans stood at 260bps, of which 192bps related to underlying cost of risk and the remaining 68bps to COVID-19 impact (non-annualised). Other impairments climbed to €72m, also including COVID-19 related impact.

§  Pre-tax result in Q1:20 stood at a €340m loss, compared to €23m pre-tax profit in Q1:19; on a recurring basis and excluding COVID-19 impact, pre-tax profit amounted to €30m vs €23m profit in Q1:19. Group net loss amounted to €230m in Q1:20, compared to €14m net profit in Q1:19.

§  Deposits amounted to €46.7bn at the end of Q1:20, up by 7% y-o-y. Private sector deposits increased by €1.4bn year-to-date, with improvement in all retail customer segments. Deposit cost continued to decline to 24bps in Q1:20 vs 33bps in Q4:19 for the total book. Gross loans before impairments and adjustments amounted to €48.7bn at the end of March 2020, while net loans amounted to €37.7bn. The Bank’s domestic performing loan book increased by €0.4bn in Q1:20 on a like-for-like basis, with business lending driving the trend. Loan disbursements reached €1.3bn in Q1:20 and €2.2bn until late May 2020, on track with €4.9bn new loan origination target for 2020. The Group’s net loan-to-deposit ratio further improved to 81% vs 88% a year earlier.

§  The pro-forma Common Equity Tier 1 (CET1) ratio of the Group as at 31 March 2020 was at 13.2%, while total capital stood at 15.2%. The loss making result of the Q1, following the increased impairments taken due to the COVID-19 crisis, was the main reason for the reduction of the capital ratios in Q1:20. Fully loaded CET1 and total capital ratio stood at 10.8% and 12.9% respectively, the lowest in systemic peers.

§  NPEs stood at €24.1bn at the end of Mar.2020 down from €24.5bn at 31 Dec.2019. The NPE coverage by cumulative provisions ratio remained stable at the level of 46%. Preparations for the €7.0bn NPE securitization continue, with the hive-down expected to be completed in Q4:20.

Overall a “brave” set of results as the bank seems confident for the rest of the year to continue with the scheduled securitisations in order to reduce decisive its NPE stock. Thin capital buffers is a matter of concentration yet management expects that future transactions will be capital accretive while pending EC amendments will create a capital buffer of €1.8bn. The management is looking to issue T2 instruments in the tune of €0.9bn.

Piraeus trades 0.11x its TBV reflecting execution risk and current challenging economic environment. 

The following table summarize results vs. our estimates: 

Bank of Piraeus

Act

Overview

Est.

(In Million Euro)

1Q19

4Q19

1Q20

QoQ

YoY

1Q20

vs Est.

NII

360.3

363.0

360.0

-0.8%

-0.1%

361

-0.3%

Fee income

69.1

91.0

71.0

-22.0%

2.8%

72

-1.4%

Trading

15

359

27

-92.5%

75.2%

-10

370.0%

Other Income

0

0

-46

0

Total income

445

813

412

-49.3%

-7.4%

423

-2.6%

Operating costs

-231

-264

-227

14.0%

1.7%

-228

0.4%

Pre-provision-profits

214

549

185

-66.3%

-13.5%

195

-5.1%

Provisions

-174

-221

-438

-98.2%

-151.6%

-200

-119.0%

Other results

-17

-50

-89

-78.0%

-423.5%

0

PBT

23

278

-342

-223.0%

-1593.8%

-5

-6740.0%

Corporate taxes

9

88

-110

-225.0%

-1322.2%

0

Net profit (continued)

14

190

-232

-222.1%

-1769.8%

-5

-4540.0%

Discontinued operations

5

0

2

0

Net profit

19

190

-230

-221.1%

-1317.3%

-5

 

PPC: PPC is scheduled to release its 1Q20 results today, after the close of the market. Management will host a conference call on Wednesday at 16:00 local time (14:00 UK time). 

AVAX: The company announced the conclusion of the sale of two independent buildings of a total surface of 25,597sqm that house its headquarters for a total consideration of €34m. 

MYTILINEOS: Reportedly the group has entered into a 10-year agreement with Gazprom for gas supply. In other news the company initiated its share buyback program of up to 105 of share capital at a price range between €0.97-€20 per share valid till March 26 2022. 

Banking Sector: Banks are asking for the law concerning deferred tax assets to be extended for two years in a bid to earn time to manage the consequences of the economic crisis stemming from the coronavirus pandemic. The request has already been submitted to the European Central Bank’s Single Supervisory Mechanism and aims to avert the possibility of the state’s stake in their share capital growing due to possible losses they may have to take from the increase in nonperforming loans this year. The law on deferred tax assets provides that in case a bank shows losses from its activities in Greece – not on a group level – it will have to increase its share capital, and if existing shareholders do not cover that increase, then the state will step in. The issue is a concern for local lenders, whose vulnerability depends on the intensity and the length of the economic contraction, even though the first-quarter data published to date by Alpha, National and Eurobank have shown they are not facing any major losses due to Covid-19. Notably, banks are heavily dependent on their postponed dues as the deferred tax assets amount to 56% of Greek lenders’ share capital. 

Intralot: Intralot said its US subsidiary launched the digital sports betting solution in Washington DC. No financial details were disclosed. “GambetDC, the world class sports betting platform powered by the DC Lottery, went live with a soft launch on May 28, 2020. The new sports betting experience offers responsible entertainment, while generating revenue supporting public programs, services, and initiatives that benefit the residents and the economic vitality of the District of Columbia,” Intralot said in a statement. Intralot, as part of its current contract with the DC Lottery, deployed its new Intralot Orion sports betting platform to enable the GambetDC mobile and desktop sports betting offering. 

TERNA ENERGY: On May 29, the company bought 16,251 own shares for a total consideration of €162.487 (€9.9985 avg price per share). 

Alpha Bank: BlackRock’s stake to the bank rose to 5.2% from below 5% previously. Alpha Bank said it initiates a hive-down process by way of a spin-off and the establishment of a new entity in a bid to press ahead with its already announced securitization of sour loans. “Pursuant to the Hive-Down, the banking business of Alpha Bank will be transferred to the New Bank, which will be licensed as a credit institution and shall be an 100% subsidiary of Alpha Bank,” it said in a bourse filing. Alpha Bank will retain certain assets and liabilities, and pursue non-core banking activities but, upon the completion of the hive-down, will cease to be a credit institution, while its shares will remain listed on main markets of the Athens bourse. The rights of the Hellenic Financial Stability Fund will be retained and preserved in full after the completion of the hive-down. The completion of the hive-down is subject to customary and regulatory approvals. 

OTE: On May 29, the company bought 53,050 own shares at €12.390/share (total cost €657.322K). OTE now owns 3,238,827 total own shares or 0.689% of share capital. 

MOH: The company concluded its share buyback initiated in May 2018 by acquiring in total 96,353 shares at €12.88/share (0.09% of total share capital). 

FOURLIS: On May 29, the company bought 12,650 own shares at €3.8675/share for a total consideration of €48.924K. Fourlis now owns 401,459 own shares or 0.7720% of share capital. 

Alpha Trust: As of today: a) the par value of the shares of the company increases from €0.04 to €1.44 per share and b) the shares of the same company are traded on the Alternative Market (EN.A.) of the Athens Stock Exchange at a new par value of €0.36 per share and without the right to participate in the share split, with the issue of 2,319,939 new (CR) shares, in terms of 3 new (CR) shares for each 1 old (CR) share. The start date of trading of the new 2,319,939 (CR) shares on the Alternative Market of ATHEX is set on June 5, 2020. 

MIG (FY 2019 results): Revenues up 7.2% at €1.07bn with net losses €32.5m vs losses of 46.9 a year ago.  Net Debt up 12.7% to €1.5bn. In more details:

§  Consolidated EBITDA amounted to €144.8mn, up 32.1% vs 2018. Excluding the positive effect of IFRS 16 implementation (which came in at €11.8m), consolidated EBITDA presented an increase of 21.4% settling at €133mn.

§  Net Income AM came in with a loss of €32.3mn vs €47mbn net profits last year, not comparable as FY’18 included profit from HYGEIA sale.

§  COVID-19 pandemic impact especially is expected to impact mainly transportation segment (ATTICA) and Vivartia’s food service segment.

§  The group has requested to extend debt maturing in 2020 due to COVID-19 pandemic.

§  Following a positive first two months for all the subsidiaries of the Group, sales of the dairy products and frozen food sectors of Vivartia group showed upward trends in March, while in April they were streamlined and moved to the levels of the corresponding period of 2019, presenting upward trends in high-stock products.

§  On the contrary, the mandatory suspension of operation of the stores of the food service sector in conjunction with restrictive travel measures has significantly reduced the turnover of both the transport sector (ATTICA) and the food service sector (of Vivartia group) during the period that the restrictive measures were in force.

§  Estimations for COVID-19 pandemic call for marginal improvements (on top line) on dairy and frozen food sectors of Vivartia group while for the activities of the Group affected by the pandemic (transport, catering) sales are expected to decrease by 30% – 40%, mainly as a result of the reduction of tourist traffic and the reduced domestic consumption expenditure caused by the pandemic. 

MIG

2018

2019

Y-o-Y

2018

2019

Y-o-Y

EUR thous.

FY

FY

(%)

Q4

Q4

(%)

Sales

996,164

1,067,767

7.2%

214,864

240,067

11.7%

EBITDA

90,100

144,750

60.7%

-10,800

21,050

294.9%

EBITDA Mrg

9.0%

13.6%

+451 bps

-5.0%

8.8%

+1,379 bps

Net Income

46,963

-32,253

-168.7%

46,963

-32,253

-168.7%

Net Mrg

4.7%

-3.0%

-773 bps

21.9%

-13.4%

-3,529 bps

 

ATTICA GROUP (FY 2019 results): The company reported FY 2019 results yesterday after market hours. Operating Cash Flow came in at €25.125mn lower than €82.145mn in 2018 due to increased WC needs on payments to creditors and increased receivables due to deferred public payments on subordinated routes. CAPEX stood at €34.41mn. Net Debt position increased by 6.5% to €305.436mn. Stock trades 0.43x its FY19 BV and EV/EBITDA 6.25x. Results highlights:

§  First time full year consolidation of HSW.

§  Attica’s traffic volumes during 2019 amounted to 7mn passengers (6.7mn for 2018), 1.02mn private vehicles (0.95mn for 2018) and 0.39mn freight units (0.36mn for 2018).

§  Consolidated sales up 10.9% to €405.4mn compared to €365.4mn in 2018 (7 months HSW consolidation only).

§  EBITDA up 37% to €78.02mn on HSW acquisition synergies and improved EBITDA margin to 19.2% from 15.6%.

§  Net income at €20.85mn including €15.8mn one-off gains form SUPERFAST XII vessel sale.

§  Cash at the end of 2019 stood at €105.33mn with debt at €410.76mn bringing net debt at €305.43mn.

§  The Group recorded during the first two months of 2020 positive growth rates in terms of its traffic volumes.

§  The reduction of the traffic volumes in the transport of passengers and private vehicles in April, compared to April 2019, reached 99% in international routes and 96% in domestic routes.

§  For freight volumes the reduction reached 18% in international routes and 47% in domestic routes.

§  The aforementioned reduction in the traffic volumes has led to a reduction in revenue for April by €18.4mn or 60%. A similar percentage decrease is also expected for May 2020 with gradual improvement from June 2020 onwards.

§  Nevertheless, management expects a reduction in Group’s revenue in 2020 is anticipated between 30% to 40% compared to 2019. The Group will present losses for the fiscal year 2020. Additionally, it is expected that the Group’s liquidity fully covers its cash flow needs. 

ATTICA GROUP

2018

2019

Y-o-Y

EUR thous.

FY

FY

(%)

Sales

365,401

405,395

10.9%

EBITDA

57,001

78,019

36.9%

EBITDA Mrg

15.6%

19.2%

+365 bps

Net Income

17,110

20,764

21.4%

Net Mrg

4.7%

5.1%

+44 bps

AthEx Calendar – Upcoming General Meetings 

02/06 Dromeas AGM

04/06: Attica Bank AGM, Mytilineos AGM

10/06: Loulis Mills AGM

12/06: Fourlis AGM

16/06 Cretan Plastics AGM Bank of Piraeus EGM, Bank of Piraeus EGM,

17/06 Elton Chemicals

18/06 Lavipharm AGM Athens Medical EGM, Space AGM

19/06 Thessaloniki Water AGM

24/06 Hellenic Petroleum AGM Karelias AGM

25/06 BYTE AGM, Sidma AGM, PPA AGM, PPC AGM, Plaisio AGM

26/06 Ellaktor AGM, Athens Water AGM, Flecopack AGM, Forthnet AGM, Motodynamics AGM, Quest Holdings AGM, Piraeus Bank AGM

27/06 Jumbo AGM Dividend €0.062, Paperpack AGM

29/06 Petropoulos AGM Intralot AGM

30/06 Intercontinental REIC, HAIDEMENOS AGM

07/07 KRI – KRI AGM, Autohellas AGM

09/07 Aegean Air EGM

15/07 Thrace Plastics

16/07 IPTO AGM

17/07 Motor oil AGM. Alpha Trust AGM

19/07 Thessaloniki Water AGM

27/07 Varvaressos AGM

30/07 Trastor AGM

01/09 ANEK AGM

02/09 Newsphone AGM 

Results Announcements 

02/06   PPC Q1:20; GEKTERNA FY:20

03/06    Motor Oil Q1:20

09/06   Quest Q1:20

10/06   OPAP Q1:20

17/06   Evrofarma FY:20

30/06   Athens Medical FY:19 

Kind Regards, 

Manos Chatzidakis

Head of research

29 Alexandras Avenue

11473 Athens,Greece

Tel: +30 210 6478755/754

Fax:+30 210 6410139

Email: [email protected]

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