Beta Sec- Thursday, August 26, 2021 Market Monitor- Market Comment- In the Spotlight

 

¢    Market Comment

Stocks ended up, hitting two month highs, on stock-picking among blue-chips and some buying interest for smaller caps. Volumes improved.

General index ended at 914.43 points, gaining 0.76%, having reached an intraday high of 915.46 (+1.53%). Blue chips rose 0.84%; mid-caps 0.96% and small caps ended 0.74%. Turnover was €56.5 million slightly up from Tuesday’s €55.68m.

Top gainers were OPAP +3.6%, NBG +2.9%, ADMIE +2.7%, Motor Oil +2.5%, Piraeus +2.1%. On the flip side Alpha lost 0.48%, Aegean 0.55% and Ellaktor 0.8%.

Significant short term gains may tempt for some profit taking in today’s session easing momentum. Still, we expect rotating buying interest to support current levels.


¢    In the Spotlight 

Greece/PDMA:  Greece’s raised €812.5mn yesterday through the offering of 26-week Treasury-bills which yielded -0.39%, unchanged from the previous similar offering in July, the debt office said. The bid-offer ratio settled at 1.67 versus 1.82 in the previous sale. The government has accepted non-competitive bids of 30% of the initially offered amount of €625mn during the auction and may accept another 30% by Thursday Aug.26. Settlement will take place on Friday, Aug. 27.

Greece/Budget Execution: Greece revised slightly down its January-July budget execution figures largely due to lower July tax revenues, than initially thought. On a modified cash basis, state budget posted a primary deficit €9.1bn compared to target of €9.6bn in deficit. The budget deficit stood at €12.5bn. State net revenues underperform the budget target by 2.3% or €636mn, amounting to €27bn. The Ministry cited the lower-than-budgeted July Public Investment Budget revenues, by €1.01bn. On the other hand, Greece collected €644mn in SMP/ANFA revenues which were not included in the 2022-25 Midterm Fiscal Plan. January-July ordinary revenues, which exclude receipts from social security organizations and local governments, also fell short of the target by 2.2%, reaching €29.5bn. Tax revenues stood at €24.4bn, €101mn below the budget target. In July alone, tax revenues stood at €3.3bn, exceeding the monthly target by €45mn. Public Investment Budget revenues stood at €2.1bn, €17mn above the budgeted target, while state spending amounted to €34.2bn, €641mn below target. State spending amounted to €39.5bn, €1.1mn below the target.

 

Banking Sector: The presence of the European Central Bank in the Greek bond market will continue until the end of 2023, regardless of what will be decided for the emergency bond market program of the pandemic (PEPP). According to ECB Governing Board member Philip Lane in an interview with Reuters, the ECB will reinvest the bonds in its portfolio under the PΕPP program, which expire at least by the end of 2023. “Consequently, there will be a sufficient presence of the ECB in the Greek bond market through the pandemic program (PEPP), regardless of what will happen with the regular program of buying bonds APP (Asset Purchase Program)” as he stated characteristically.

Greek bonds participate in the PEPP program but not in the APP program, as Greece does not have the required creditworthiness.

In general, as the ECB official explains, ensuring favorable financial markets favors the bond market as a whole, and the benefit is not limited to bonds purchased by the Central Bank. According to Mr. Lane, the participation of Greek bonds in the pandemic program was quite an important development, as the risk of recession was quite high due to the crisis caused. In this context, the PEPP program worked effectively.

He declined to comment on whether the ECB plans to increase the APP program after the pandemic program is completed in March 2022.

 

MOH-GEK TERNA: The Greek competition authorities have reportedly approved the joint scheme between Motor Oil and GEK-Terna for the development of a €375mn CCGT power plant fueled with natural gas of 877 MW capacity in Komotini. The construction of the power plant is scheduled to commence within 2021 and is expected to be commissioned for commercial operation early in the year 2024. TERNA will undertake the construction works of the plant. The two groups will participate with a 50% stake each in the joint scheme which will develop the power plant.

AUTOHELLAS: The company signed a Cooperation with JPMorgan Chase for EUR 180m financing through securitization of lease receivables (Asset Backed Securitization). The agreement is a non-recourse transaction.

Hellenic Petroleum (Results Q2/H1:21): ELPE will announce Q2:21 results today after market hours followed by a conference call. Despite the increase in demand in marketing unfavorable refining spreads will make for a rather soft quarter. Oil price gains are expected to enhance HELPE’s EBITDA reported figures in the tune of €78m. In more details:

§  On the refining segment ELPE is expected to post a small improvement since refining margins bounced at a moderate yet crude differentials remained considerably unfavorable in Q2:21. Refining EBITDA is seen at €19m -52.5% y-o-y. Petchems had a solid performance posting €33m on the back of higher PP prices. On the marketing front domestic EBITDA is seen at €10m on higher automotive fuel demand while International marketing was up too at €12m. All in we expect adjusted EBITDA to shape at €72m. Inventory effect should lead to €150m reported EBITDA, up 95.4% y-o-y.

§  Further down we forecast adjusted net loss of €8m from adjusted net loss of €22m in Q2:20 and adjusted net income of 1m in Q1:21.

§  On a H1:21 basis, we forecast adjusted EBITDA of €130m, down 32% y-o-y, and adjusted net loss of €6m from adjusted net income of €21m in H1:20.

In the conference call we expect some color on refining outlook, RES deployment, working capital and debt and any comments regarding DEPA privatization.

The following table summarise our estimates:

Hellenic Petroleum

2020

2021

Y-o-Y

2020

2021

Y-o-Y

EUR mn.

H1

H1

(%)

2Q

2Q

(%)

Refining Volumes (MTx1000)

7,506

6,960

-7.3% 

3,623 

3,550 

-2.0% 

Marketing Volumes (MTx1000)

1,921

1,952

1.6% 

871 

1,100 

26.3% 

Petchems Volumes (MTx1000)

141

142

0.7% 

65 

70 

7.7% 

Sales

2,986

3,522

18.0% 

1,067 

1,800 

68.7% 

Refining Supply & Trading

126.0

25.0

-80.2%

40.0

19

-52.5%

Petchem

36.0

69.0

91.7%

16.0

33

106.3%

Domestic Marketing

11.0

20.0

81.8%

-1.0

10

International Marketing

26.0

22.0

-15.4%

10.0

12

20.0%

Other

-7.0

-6.0

14.3%

-3.0

-2

33.3%

Adjusted EBITDA

191

130

-31.9% 

63

72

14.3% 

EBITDA

-341

326

195.6%

76

150.0

97.4%

Adjusted Net Income

21.0

-6.0

-128.6% 

-22 

-8.0

63.6% 

Net Income

-336.0

140.0

141.7%

5

50.0

900.0%

Conference Call details: 26/08/2021 18:00 GR-Time.

§  UK           +44(0)8003681063

§  US           +15164475632

§  GR           +302130096000

Alpha Bank (Q2:21 results preview):Alpha is set to announce Q2:21 results today after market hours followed by a conference call. Galaxy securitization will weight on results, yet we expect on adjusted basis net profit of €90m. In more details:

§  NII is see lower at 370m down 7.4m q-o-q on tough comps since Q1:20 include 25m extra income from TLTROs funding. On the other hand fees ate seen higher by 11.6% assisted by loan disbursements. Trading and other income is expected to normalize in Q2:21 after strong contribution of GGB’s in Q1. Total income is expected to reach 505m down 9.2%.

§  OpEx is seen at 270m affected by 12m restructuring expenses and higher G&A’s with recurring part at €258m. All in Pre Provision Income is forecasted at 235m up 70.9% q-o-q.

§  Ordinary credit impairments are expected to reach 160bps or 130m in the quarter. Below net profit we expect Alpha to book €2.1bn losses from Galaxy transaction.

§  We should look for new NPE formation, NPEs coverage post Galaxy transaction and trends in major income lines.

The following table summarise our estimates:

Alpha Bank

Act.

Act.

Est.

Latest read

Overview

(In Million Euro)

1Q20

1Q21

2Q21

QoQ

YoY

NII

381.2

399.6

370.0

-7.4%

-2.9%

Fee income

89.2

84.3

94.0

11.6%

5.4%

Trading

85.7

60.9

30.0

-50.8%

-65.0%

Other Income

9.9

11.1

11.0

Total income

566.0

555.9

505.0

-9.2%

-10.8%

Operating costs

-259.0

-418.4

-270.0

35.5%

-4.2%

Pre-provision-profits

307.0

137.5

235.0

70.9%

-23.5%

Provisions

-307.4

-390.6

-130.0

66.7%

57.7%

Other results

-9

-5.6

-5.0

11.0%

44.6%

PBT

-9.4

-258.7

100.0

138.7%

1160.9%

Corporate taxes

1.5

23.4

10.0

-57.3%

566.7%

Net profit (continued)

-11

-282

90

131.9%

923.7%

Discontinued operations

0

0.0

-2,100.0

Net profit

-10.9

-282.1

-2,010.0

-612.6%

-18296.5%

Minorities

0.0

-0.1

0.0

Attributable net profit

-10.9

-282.2

-2,010.0

-612.3%

-18296.5%

Conference Call details: 26/08/2021 17:50 GR-Time.

§  Greek participants:   +30 211 180 2000

§  UK participants:       +44 (0) 800 368 1063

§  UK & International:  +44 (0) 203 059 5872

§  USA participants:     +1 516 447 5632

ATTICA BANK (H1:21 review):  Attica Bank posted H1:21 net losses of €19.5m vs. 29.6 a year ago. In more details:

§  Net Interest Income increased by 21.8% compared to the last semester

§  Net Commission Income increase by 51% y-o-y

§  Personnel expenses displayed a marginal decrease of 1.0%

§  Increase of deposits by 9.3% y-o-y

§  New financing and refinancing doubled in Q2:21, amounting to €109mn vs the previous quarter

§  5.1% of the performing loan portfolio (before provisions) relate to covid-19 exposures

§  NPE ratio less than 1% on a pro forma basis. Without taking into account the securitizations Astir 1&2 and Omega, NPE ratio stands at 45.3% and NPE Cash Coverage Ratio at 43.6%.

§  Gross Loans amounted to €2.1bn, an increase by 4.0% compared to 31.12.2020. New financing and refinancing stood at c. €184.5mn

§  Gross loans to deposits ratio stood at 71.4%.

§  Development according to plan of the capital adequacy recovery program (Capital Plan). During the current period, the Bank finalizes all actions concerning the implementation of the enhancement of the regulatory capital based on the relevant program.

§  EGM on September 15 to approve the issuance of state warrants.

 

PPC: PPC will donate €3mn toward anti-erosion, anti-flooding and reforestation projects in northern Evia, the region devastated by wildfires that burned throughout August, the Environment & Energy Ministry. PPC will grant the funds directly to local forestry cooperatives, it said.

B&F: The company expands in Bulgaria by setting up a fully owned subsidiary namely B&F Bulgaria Limited to operate mainly in the e-sales area.

PROFILE: On August 23 and August 24, Profile bought 2,700 shares for a total amount of €13.114K (€4.86/share).

MYTILINEOS: On August 24, the company bought 37K shares at €15.9834/share for a total amount of €591.384K. Total treasury at 7,204,342 shares or 5.04185 of share capital.

OTHER RESULTS:

 

IDEAL (H1:21 review): Gross cash at €5.294mn vs €4.57mn in FY:20 and €9.864mn in H1:20).

IDEAL

2020

2021

Y-o-Y

EUR thous.

Η1

Η1

(%)

Sales

10,647

18,000

69.1%

EBITDA

775

1,745

125.2%

EBITDA Mrg

7.3% 

9.7% 

+242 bps 

Net Income

516

1,469

184.7%

Net Mrg

4.8% 

8.2% 

+331 bps