Τη δηµιουργία µονάδας παραγωγής επίγειων καλωδίων στις ΗΠΑ εξετάζει η Cenergy καθώς η ζήτηση στη χώρα παρουσιάζεται ισχυρή.
Περνά στον έλεγχο του Τέλη Μυστακίδη η Aegean Baltic Bank.
Alpha Bank: Προσαρµοσµένα κέρδη 780 εκατ. ευρώ το 2023.Ο δείκτης απόδοσης κεφαλαίου έφτασε το 12,9%.Ο ∆είκτης Μη Εξυπηρετούµενων Ανοιγµάτων του Οµίλου διαµορφώθηκε σε 6%. Ο ∆είκτης FL CET1, διαµορφώθηκε σε 15,9%.Αύξηση στο Καθαρό Έσοδο Τόκων +41% σε ετήσια βάση. Πρόταση για µέρισµα 0,05 ευρώ/µετχ.
ΕΛΣΤΑΤ: Στο 2% διαµορφώθηκε ο ρυθµός ανάπτυξης της ελληνικής οικονοµίας (2,4% κατά τον προϋπολογισµό). Η συνολική τελική καταναλωτική δαπάνη παρουσίασε αύξηση κατά 1,8% σε σχέση µε το 4o τρίµηνο του 2022.Οι ακαθάριστες επενδύσεις παγίου κεφαλαίου µειώθηκαν κατά 5,7% σε σχέση µε το 4o τρίµηνο του 2022. Το ΑΕΠ σε τρέχουσες τιµές το 2023 ανήλθε σε 220,3 δισ. ευρώ.
*PANTELAKIS SECURITIES* (https://www.pantelakis.gr/)
Eurobank (Overweight): Q4 beat and slightly brighter 2024-26 outlook
* High-quality Q4 beat driven by NII strength (+3% qoq) and lower CoR; €0.34/18.1% FY23 clean EPS/RoTE above our estimate and guidance
* Updated business plan calls for c15%/13% 2024-25 RoTE (with partial Hellenic Bank integration), a tad above our 14.3%/12% estimates
* Upside risks to 2024-26 targets, not least by full HB integration; 17% CET1 allows both M&A and dividend payouts (starting at €0.09/sh)
Greek Economy – 4Q/FY23 GDP (provisional data): GDP increases in 2023 by 2.0% y-o-y, slightly below the State budget target and EC forecast of +2.3% and 2.2% respectively
The Facts: The Hellenic Statistical Authority (ELSTAT) announced that 4Q23 GDP (in volume terms seasonally adjusted) rose marginally by 0.15% QoQ, and by 1.17%, compared to a 2.08% YoY growth in 3Q23 and a 4.27% YoY growth in 4Q22. In 2023, GDP is up 2.0% YoY (slightly below the state budget target of 2.3% and the EC forecast of 2.2%). On a non-seasonally adjusted basis, 4Q23 GDP (in volume terms) rose by a strong 5.20%.
Our Analysis: According to the 4Q23 GDP breakdown (seasonally adjusted), total consumption was up 1.2% QoQ and up by 1.8% YoY, exports were up by 0.4% QoQ and up by 2.1% YoY, Gross capital formation was down by 5.0% QoQ and also down by 1.2% YoY and finally imports were up by 1.9 QoQ and flat YoY.
DBRS sovereign debt review on Greece out today amc
DBRS is set to release its country debt review on Greece today after the market close. As a reminder, last March DBRS Ratings upgraded the Hellenic Republic’s Long-Term Foreign and Local Currency – Issuer Ratings from BB (high) to BBB (low), with stable trends.
Sector Headlines
ECB kept rates on hold
The Governing Council of the European Central Bank decided yesterday to keep the three key ECB interest rates unchanged, with the interest rate on the main refinancing operations at 4.50%, on the marginal lending facility at 4.75% and the deposit facility at 4.00% respectively.
Company Headlines
HFSF disposed its stake in Piraeus Financial Holdings
HFSF announced that it disposed its 27.0% stake, corresponding to 337,599,150 common shares to both Greek and international investors at EUR 4.00 per share and raised EUR 1,350m. Greek investors acquired 67,519,830 shares or namely 20% of the totality of the offer shares (65% to retail investors, 35% institutional) and international investors acquired 270,079,320 offer shares or namely 80% of the totality of the offer shares. Taking into account valid subscriptions only, the total demand that was expressed in the offering amounted to 2,672,154,345 Shares, exceeding the offer shares by approximately 7.92x. The expected date on which the offer shares will be credited with the investors’ securities accounts is set for 11 March 2024.
Eurobank Holdings || Rating: Buy | CP: EUR 1.8960 | TP: EUR 2.41
4Q2023 Review: | Bottom line miss on one-off costs, BP targets feasible
Optima View | Even though pre-provision income beat our estimate on higher top line and better cost containment, reported net profit missed due to one-off costs related to recycling through P&L of FX reserves due to the completion of the sale of Serbian operations and loss from NPE transactions. Nonetheless, we believe that the BP targets are feasible as they assume a rapid increase of time deposits in an easing cycle environment as well as a static balance sheet of Hellenic Bank and without taking into account any synergies on revenues and costs over the period. We reiterate our Buy rating and following the announcement of the new business plan, we’ll revise our forecasts and TP.
2023 results | Reported net profit came in at EUR 1,140m (-14% y-o-y) in 2023 and at EUR 159m (-46% q-o-q) in 4Q23, well below our estimate of EUR 351m due to a unexpected loss of EUR 124m related to recycling through P&L of FX reserves due to completion of the sale of Serbian operations and a loss of EUR 48m related to Solar securitization & Leon NPE transaction. NII reached EUR 2,174m (+47% y-o-y) in 2023 and EUR 573m in 4Q23 (+3% q-o-q), 2% above Optima estimate of EUR 559m. NIM widened by 6bp q-o-q to 2.90% in 4Q23 and to 2.75% in 2023 vs. 1.91% in 2022. Fee income came in at EUR 544m (+4% y-o-y) and at EUR 141m in 4Q23 (+6% q-o-q), 3% higher than our estimate. Core income reached EUR 2,718m (+36% y-o-y) and EUR 714m (+3% q-o-q). Non-core revenues reached EUR 86m in 2023 and EUR 56m in 4Q23, well above our estimate. OpEx came in at EUR 901.9m (+5.2% y-o-y) and at EUR 229.1m (-0.1% q-o-q), well below our estimate. Pre-provision income stood at EUR 1,902m (+2% y-o-y) in 2023 and EUR 540m (+14% q-o-q) in 4Q23, well above our estimate. Loan loss provisions amounted to EUR 345m (+25% y-o-y) in 2023 and to EUR 90m in 4Q23 (0% q-o-q), 9% lower than our estimate of EUR 99m. CoR stood at 85bp in 2023 and 88bp in 4Q23. Group NPEs decreased by EUR 541m q-o-q to EUR 1.51bn, the NPE ratio squeezed to 3.54% from 4.86% in 9M23 and the NPE cash coverage widened further to 86.4% from 75.0% in 9M23.
Capital | Tangible equity rose by EUR 345m q-o-q to EUR 7,565m and TBVPS increased to EUR 2.07 vs. EUR 1.94 in 3Q23. Adj. RoTBV widened to 18.0% vs. 11% in 2022 and FL CET1 widened to 17.0% from 16.8% in 3Q23.
Balance sheet | Performing loans increased by EUR 1.1bn q-o-q to EUR 41.5bn. Deposits advanced by EUR 989m q-o-q to EUR 57.4bn. Time deposits increased by EUR 1.1bn q-o-q to EUR 20.2bn and accounted for 35.2% of the deposit base from 33.8% in 3Q23. LDR remain flattish q-o-q at 72.3%
Business plan targets | The business plan assumes a static view of Hellenic Bank balance sheet with no growth in loans and deposits in the 3-year period, no synergies on costs & revenues as well as the stake to reach 55.3% throughout the plan. Eurobank will consolidate Hellenic Bank as of 3Q24, which will have a negative impact on group CET1 of 80bp. Therefore, management targets core operating profit (Core PPI-LLPs) to exceed EUR 1.5bn (>2% y-o-y) in 2024e from EUR 1.47bn in 2023 and to EUR 1.6bn in 2026e. Net interest income is expected to increase to EUR ca2.3bn in 2024e and to accelerate further to EUR 2.4bn in 2026e, assuming time deposits to increase to 38% of the deposit base in 2024e and to 44% in 2026e vs. 28% in 2023, a conservative assumption, in our view. Fee income is targeted to reach EUR 630.0m (+15.8% y-o-y) in 2024e and to EUR 750.0m in 2026e. TBVPS is expected to reach EUR 2.30 in 2024e and EUR 2.70 in 2026e and the adj. RoTBV to narrow to 15% in 2024e and to 13% in 2025e-2026e from 18% in 2023e. Finally, mgt targets the NPE ratio to squeeze below 3.5% in 2024e and at 3.0% in 2026e and the NPE cash coverage to stand at 80.0% over the period, with CoR slightly less than 80bp in 2024e and at 65bp in 2026e.
Dividend payout | Management clarified on the conference call that the dividend payout from 2023 adj. net profit will be at least 25% or EUR 0.09/share, subject to regulatory approval and implying a gross dividend yield of 4.7%. Management will make the final decision in May.
Excess capital | FLCET1 is expected to surpass 17.0% in 2026e, creating an excess capital of >250bp above mgt target of 14.5% that will be used to fund M&A’s in the core markets of the group (Greece, Cyprus, Bulgaria) as well as to reward shareholders. DTC is expected to narrow to 36% of CET1 in 2024e, 31% in 2025e and 28% in 2026e from 44% in 2023.
Eurobank Holdings CC highlights
Management clarified yesterday in the CC that it will propose to the AGM of shareholders the distribution of a dividend of EUR 0.09/share (DY: 4.7%, Div. payout: 25% on adjusted net profit), subject to regulatory approval. The final decision will be made in May. According to the business plan, the bank will generate an excess capital of more than 250bp, which will be used to fund M&As in the core markets of the group (Greece, Cyprus, Bulgaria) as well as to reward shareholders. As far as the Hellenic Bank is concerned, Eurobank will launch a mandatory tender offer right after the approvals of Central Bank of Cyprus and the ECB. They aim to increase the stake above 55.3% and to merge Hellenic with Eurobank Cyprus. Finally, they estimate that for every EUR 1.0bn excess liquidity of Hellenic Bank they use, it will boost its NII by EUR 20m-25m. We reiterate our Buy rating and following the announcement of the new business plan, we’ll revise our forecasts and TP.
Alpha Services & Holdings CC highlights
Management stated yesterday in the CC that it will propose to the AGM of shareholders the distribution of a dividend of EUR 0.05/share (DY: 2.9%), subject to regulatory approval. Shareholders remuneration is its top priority and in this spectrum, distributions could take the form of buybaks and capital returns. Mgt also cited that it will assess M&A opportunities with strict criteria for EPS accretion and shareholder value creation. Recall that according to the business plan, management aims to generate an excess capital of EUR 1.5bn/ EUR 0.64 per share, above its 13% target by 2026e. We reiterate our Buy rating and following the announcement of the new business plan, we’ll revise our forecasts and TP.
Fitch Ratings affirms ‘BB-‘rating on PPC, and revised up its standalone rating by one notch
Fitch Ratings has affirmed Greece-based Long-Term Issuer Default Rating and senior unsecured rating on PPC at ‘BB-‘ while has revised up PPC’s Standalone Credit Profile (SCP) to ‘bb-‘ from ‘b+’.
HELLENiQ ENERGY and EDISON to terminate their partnership in ELPEDISON (press)
According to Euro2day.gr, HELLENiQ ENERGY and EDISON, are considering to split ways with regards to their 50%/50% partnership in ELPEDISON, an energy company with thermal generation and electricity and natural gas supply activity in Greece.
Cenergy Holdings 2023 conference call highlights
Key highlights include: a) Buoyed backlog offers visibility until 2028e for cables and 2025 end for pipes, b) offshore cables capacity expansion to be operational from 1Q25e, c) new production capacity in Thiva to be operational by 2025 end, d) explores investment opportunities for land based medium and high voltage cables in the US, e) management expects lower financial expenses in 2024, f) expects similar to 2023 needs for capex in 2024 (EUR 133m in 2023), g) cables projects EBITDA margins remain >20%, products margins 7%-9%, company strategically shifts towards more projects execution in its mix, h) dismisses any rumors on potential capital increase
Autohellas’ 4Q/FY23 results out
Autohellas announced revenues of EUR 240.2m (+21.9% y-o-y), EBITDA of EUR 57.9m (+20.3% y-o-y) and net profits (negatively affected by the significant increase in financial costs due to rising interest rates) of EUR 10.3m (-6.6% y-o-y) for 4Q23. Tin FY23 terms, sales were up by 31% to EUR 1,003m, driven by sales abroad of EUR 174.2m (+87.8% y-o-y) and the car trade activity which exhibited sales of EUR 560.1m, up 32.7% y-o-y, while Car rental activity in Greece was up by 7% y-o-y with revenues of EUR 268.4m. The company proposed the distribution of EUR 0.70/share dividend (dividend yield of 5.2%).
Viohalco 2023 results out
Viohalco reported 2023 revenues of EUR 6.3bn, down 9.8% YoY, adjusted EBITDA of EUR 537m, down 17.3% YoY and Net Profits at EUR 66.5m versus EUR 302.4m in 2022, further impacted by the increased interest rates. Group net debt stood at EUR 1,873m, slightly lower by EUR 184m y-o-y from EUR 2,057m at the end of 2022 and Capital expenditure for the period amounted to EUR 281m vs. EUR 317m a year ago. The Group proposed the distribution of EUR 0.12/share dividend for FY23 (dividend yield at 2.1%).
ASE ended the day with marginal losses of 54bps and inflated volumes driven by Piraeus Bank placement. Poor session for the banks, with NBG -3.7%, Alpha down 3.5%, despite solid results, Eurobank -2.2% and Piraeus -1.5%. On non financials, Titan cement stood out, recording gains of 3.1%, followed by GEK TERNA +2.8%. Terna energy flat.
MACRO – CORPORATE NEWS
MACRO
According to ELSTAT, Greek GDP in 4Q23 grew +1.2% yoy and +0.2% on qoq. Greek GDP growth in 2023 (first estimate) grew by 2.0%, vs 2.4% in the budget. The weaker GDP growth in 4Q23 mainly reflects the slowdown in gross fixed capital formation (down 2.6% qoq, reversing the solid positive trends of previous quarters) largely due to a drop in inventories, in our view. The outlook for 2024E remains positive, in our opinion, with GDP growth in the 2.0%-2.5% range, well above Eurozone averages.
EUROBANK <EUROB GA, OW> –
Eurobank reported another strong quarter with net earnings (recurring) of EUR 340m, above our and consensus estimates, mainly driven by another uplift in NII (+2.6% qoq). More importantly, Eurobank also presented the business plan targets up to 2026E. The management expects a ROTE of c.13% by 2026E, implying a net profit of c.EUR 1.2bn, which is broadly in line with our forecasts.
The key NII assumptions in the business plan are an ECB DFR of 3.25% at end 2024E and 2.75% at end of 2026E. The time deposit mix to total is expected at 38% in 2024E and 44% in 2026E (from 28% in 2023) with the deposit beta increase to 32% by 2026E from 18% in 2023. Performing loan growth for the group is c.7.0% (c.6.0% in Greece and c.10% in SEE) with a reduction in domestic corporate spreads to c.240bps by 2024E (from 271bps in 2023). The 2024E NII sensitivity for 25bps change in the 3M Euribor is EUR 30m. Although the rate assumptions appear more hawkish vs. peers we think the overall assumptions (particularly on deposit mix and beta) is on the conservative side. For Hellenic Bank, Eurobank assumes in the targets the stake to reach 55.3% in 3Q24 with line by line consolidation thereafter. The targets do not take into account any synergies (revenue or costs) or the target to raise the stake even further and eventually merge with Hellenic Bank.
All in, Eurobank expects core operating profits at c.EUR 1.6bn by 2026E (in line with our forecast of EUR 1.55bn) aided by the acquisition of 55.3% of Hellenic Bank and BNP Personal Finance Bulgaria. Eurobank anticipates NII to reach EUR 2.4bn by 2026E vs. EUR 2.2bn in 2023E with the additional NII mainly deriving from the Hellenic Bank consolidation. On COR, the bank inputs a COR of c.65bps in the targets, which we find rather conservative in view of the c.80% NPE Coverage (86.4% in 2023 with the NPE ratio already down to 3.5%). The FLCET1 ratio stood at 17% in 2023
Going forward the management anticipates the FL CET1 ratio to remain at >17%, including the impact from Basel IV implementation (-60bps) and the Hellenic Bank transaction (c.80bps). However, in the 2024-26E period the bank expects organic capital generation of c.250bps which (besides M&A) will fund loan growth and shareholders reward (in cash and / or share buyback). From 2023 net earnings the payout ratio if >25% on adjusted net profit (which implies a c.EUR 0.09 DPS, in line with our estimate). The pay-out ratio will gradually step up to 50% by 2026E. The dividend yield out of 2023 net earnings is c.4.7% and reaches 8-9% by 2026E.
On the 2026E guidance the shares trade on a P/E of 5.7x, a P/TBV of 0.7x and a dividend yield of 8-9%. We think this is inexpensive relative to European peers (P/E on 2025E for the SX7E at 6.7x, P/BV of 0.66x and dividend yield of 7.6%) with Eurobank posting a superior sustainable ROTE (13% vs. c.10% EU average). We also think that there are upside risks in the targets in terms of synergies with Hellenic Bank and on potential lower COR. We remain BUYers.
TERNA ENERGY <TENERGY GA, OW>
The company announced it has signed the first green PPA with a public sector company, Thessaloniki Water. Terna Energy will be responsible to provide up to 100GWh of electricity annually. PPA avg price is at EUR 80/MWh and PPA duration has been agreed for eight years with the option to extend for another four.
Market Comment // Greek stocks lost ground on Wednesday as profit taking prevailed throughout the session, with the benchmark index retreating -0.53%. Trading activity skyrocketed to €1.3bn, due to HFSF’s placement of its stake in Piraeus Bank, which accounted for more than 80% of the total traded value. Among laggards, NBG and Alpha Bank were down more than 3%, trailed by Profile (-2.35%) and Eurobank (-2.14%). Stocks posting a >1% decline were Elvalhalcor, Viohalco, Autohellas, Piraeus Bank, Epsilon Net, Quest and Sarantis. On the positive side, Titan surged by 3.11%, followed by Gek Terna (+2.84%) and OPAP (+2.03%), while Aegean Airlines, OTE, PPC, Mytilineos and Motor Oil were among the few stocks with mild gains. EU futures point to a positive opening ahead of the U.S. jobs data bolstered by dovish language by policy makers.
Economy // Q4 GDP data released yesterday was somewhat weaker than expected. Q4 GDP growth settled at 1.2%, thus leading to +2% growth for the full year, somewhat lower than govt and institution projections (2-2.5%). The underperformance was due to a poor showing from fixed capital formation and potentially an ongoing drag from the flooding in Q3. Overall, final consumption increased 1.8% in 2023, while fixed capital formation settled at -0.5%.
Eurobank // Eurobank reported very strong Q4 results with Adj. net profit of €340mn, better than consensus estimates (€301mn) on stronger than expected NII, fee generation and non-core income. Core PPI came in at €485mn (VA consensus at €466mn), +5% q/q, while reported PPI came in at €540mn, +14% q/q also reflecting the higher non-core revenues at +€55mn (vs €12mn in Q3’22). The management provided guidance for RoTE of 15% in 2024e fading towards 13% in 2026 (incorporating a 55% stake of Hellenic Bank). The proposed dividend stands at €0.09/share out of 2023 profits (4.9% yield).
FTSE-Piraeus // Following the divestment of HFSF from Piraeus Bank and the increase in the latter’s free float, PB’s investability weighting in the FTSE indices (FTSE All-World Index, FTSE Global Large Cap Index, the FTSE Emerging Index and the FTSE MPF All-World Index) will be increased to 81.4% from 54.4% previously. Changes will become effective from the start of trading on Monday 18th March (flow Friday the 15th March).
ASE-Piraeus // PB’s investability weight will increase to 82% (from 55% previously) in the FTSE/ATHEX Large Cap, FTSE/ATHEX Banks, FTSE/ATHEX Financial Services and the FTSE/ATHEX Large Cap Market indices. Changes will become effective on Tuesday 12 March (opening).
Piraeus Bank // As far as the allocation is concerned, the bulk of HFSF’s stake (i.e. 80% or 270.1m shares) was allocated to foreign qualified investors. The remaining 20% (i.e. 67.5m shares) was allocated to domestic investors, with 43.9mn shares given to retail and 23.6m shares to qualified investors.
Autohellas // FY’23 results landed c4% above expectations, with EBITDA shaping at €272m (+20% yoy) on revenues >€1bn (+31% yoy, or +21% organic). Autohellas proposed DPS stands at €0.70 (EEe €0.66/share), indicating a c5% div. yield (ex-date 22 April).
Terna Energy // The CEO of Masdar (the party negotiating for the acquisition of Terna Energy) will arrive in Athens today as part of the delegation from Abu Dhabi. The report states that the financing scheme for the deal has been established, the details of the agreement have been finalized, and that all signs indicate that an agreement is imminent.
Papoutsanis // Expanding our SME research program funded by the EBRD, we are initiating coverage on Papoutsanis (PAP), Greece’s sole and Europe’s largest soap manufacturer, operating across four product segments, namely Own brands, Hotel amenities, PL/Third party and Soap noodles. Strengthening of brand positioning, dominance in local PL, rising international sales (>55%) and vertical integration are key pillars of the business model, with branded and PL/third-party products driving revenue (c70%). PAP has a strong track record of double-digit revenue growth since 2016, only temporarily interrupted in 2023e (-12%) due to post-COVID adjustments. In 2023-2026e, we foresee a CAGR of 11% (volume-led) propelled by local market share gains and PL/third party contract expansion. Profit-wise, 2023e EBIT is set to return to 2021 record levels (€7m) and to shoot up to 9m in 2024e as inflation eases, settling >35% higher than 2019 levels. Beyond 2024, we forecast 2-digit profit growth (EBITDA CAGR c18% over 2023-26e). On the cash flow front, 2023 is set to be a turning point for FCF, as Papoutsanis has largely completed its high investment cycle and capex trends down to €5-5.5m. Valuation-wise, given the tepid performance in the last year the stock is still at c7.2x 2024e EV/EBITDA, namely 35% discount vs the EU HPC sector. Our valuation is based on a DCF (9.5% WACC) and yields a 12m PT of €3.0, effectively valuing the company at 8.6x 2024e EV/EBITDA, still at >20% discount vs. its peers. Our research report is freely available here.
HelleniQ Energy // According press, HelleniQ Energy and Edison are set to enter negotiations next month regarding their joint venture, Elpedison, with HelleniQ Energy reportedly interested in acquiring the remaining 50% stake from the latter.
Terna Energy – EYATH // The two Groups signed a green PPA contract for the supply of electricity up to 100GWh per year for 4 years, with the option of extension for an additional 4 years. The average price of energy to be supplied will be <€80/MWh.
Cenergy Holdings // Management provided a positive spin to the message for FY’24 in yesterday’s results call. Incremental improvements in profitability are expected in FY’24, thanks to a higher share of turnkey installations in cables and a skew towards more specialized projects in the upcoming backlog for steel pipes. Management anticipates strong FCF generation to continue into 2024 and expects it to be sufficient to cover both capex and financial expenses, while also providing room for distributions to shareholders. Overall, guidance for €230-250m Adj. EBITDA for FY’24 (EEe €243m) seems well underpinned.
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ΑΠΟΠΟΙΗΣΗ ΕΥΘΥΝΩΝ: Το περιεχόμενο και οι πληροφορίες της στήλης προσφέρονται αποκλειστικά και μόνο για ενημερωτικούς σκοπούς και σε καμία περίπτωση δεν μπορούν να εκληφθούν ως συμβουλή, πρόταση, προσφορά για αγορά ή πώληση των κινητών αξιών, ούτε ως προτροπή για την πραγματοποίηση οποιασδήποτε μορφής επένδυσης. Κατά συνέπεια δεν υφίσταται ουδεμία ευθύνη για τυχόν επενδυτικές και λοιπές αποφάσεις που θα ληφθούν με βάση τις πληροφορίες αυτές.
