Thursday, May 05, 2022 – Beta Sec: Μarket Monitor- Market Comment- In the Spotlight

Market Comment

Stocks in AthEx ended flat, in line with Europe’s muted performances, as investors are in a wait-and-see mode ahead of Federal Reserve’s policy decision.

  • General index closed at 900.35 points, slipping 0.01% from Tuesday’s 900.45 points. The large-cap FTSE-25 index contracted 0.04%, ending at 2,181.23 points. The banks index fell 0.16%, as National conceded 1.46%, Piraeus dropped 0.74% and Alpha parted with 0.19%, while Eurobank advanced 1.21%.

Ellaktor grew 3.52%, as Quest Holdings shrank 2.18%. In total 54 stocks recorded gains, 61 posted losses and 46 remained unchanged. Turnover amounted to 61.8 million euros, down from Tuesday’s €110 million.

A positive opening is expected following international sentiment. 

¢    In the Spotlight 

Greece/PDMA: Greece sold €812.5mn of 13-week Treasury-bills on Wednesday, at a higher yield, of -0.16% from -0.20% at a similar sale in April, the debt office said. The bid-to-cover ratio stood at 1.98 compared to 1.36 in the previous offering. 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, May 5. Settlement will take place May 6.

Greece/AIA traffic statistics: Economic sentiment in Greece is apparently taking a major “hit” from the global energy crisis and repercussions from the war in Ukraine, with the result in April 2022 marking a 12-month low. According to the latest monthly bulletin by the Athens-based Foundation for Economic & Industrial Research (IOBE), the economic sentiment index reached 105.0 last month, significantly down from 112.1 points in March 2022.

 

Greece/Consumer Confidence Index: Consumer confidence index stood at -55.3 points in April, down from -51.4 in March.

Greece/Energy Sector: Gov’t is expected to announce more measures today easing impact of rising energy prices. The main measure is a subsidy for consumption of more than 300 kilowatts per month. PM himself will make the announcements today. The overall goal is to return rates paid by consumers to last summer’s levels, while details are expected to be “fleshed out” a day later by relevant ministers.

BOG: The bank trades ex FY:21 gross dividend €0.6720/share (net €0.6384/share) as of today.

ALPHA BANK: Alpha Bank reportedly received three binding bids for the selection tender of a real estate strategic partner. Press reports said that the consortia of Invel-Prodea, Dimand-HIG and Brook Lane –Bain submitted binding offers. Alpha has said that it will pursue a joint venture through its listed real estate subsidiary Alpha Astika Akinita in the Greek market. The joint venture partner to be selected is currently intended to acquire a controlling stake in the €500mn project named Skyline of 573 different assets which have been recovered. Q1:22 results to be announced on May 26 after market close.

EUROBANK: Q1:22 results on May 25.

TERNA ENERGY: The company will setup an investor day on May 16 to financial community and analysts. On May 3, the company bought 2,500 shares at €17.07/share for a total consideration of €59.745K.

THRACE PLASTICS: AGM on May 25 to approve FY:21 div distribution (gross) €0.11/share.

MOTODYNAMICS: AGM on June 16.

KRI KRI: CEO Mr Tsinavos bought on April 29 and May 3 3K and 2K shares respectively at €7.0156/share and at €6.7756/share.

PREMIA: Premia Properties AGM approved the change in Premia’s legal status from Societe Anonyme to Real Estate Investment Company. On May 3, the company bought 15.5K shares at €1.3573/share for €21.039K.

Mytilineos (Q1:22 results review): Mytilineos announced a satisfactory set of Q1:22 results coming ahead of our estimates on the back of Metallurgy and Power and Gas strong performance. In more details:

§  Group turnover amounted to €1,042m vs €524m in Q1:21, posting an increase of 99%. EBITDA stood at €130m vs €81 million in the corresponding period of 2021, up 65.2%. Net profit after taxes and minority interests, rose to €67 million, an increase of 80% compared to Q1:21.

§  Power & Gas BU: Turnover came at €641 million, (61.6% of Group’s turnover), posting a 236% increase y-o-y. EBITDA stood at €61 million, in-line with Q4 2021 and significantly improved compared to Q1:21. In Q1:22 energy generation came at 1,526GWh up 22% vs. Q1:21 covering 11% of domestic demand. The new 826MW, highly efficient natural gas fueled CCGT plant is already in the “cold commissioning” phase and is expected to enter full commercial operation in Q3 2022. Total installed capacity, including the new CCGT and RES units, currently stands at c.2.3GW (out of which 211MW are RES). Consequently, the Company’s generation market share is expected to gradually double.

§  Metallurgy BU: Metallurgy recorded turnover of €214m, (20.5% of Group’s turnover), vs. €148m in Q1:21. EBITDA came in at €55m, vs. €35m in the corresponding period of 2021, posting an increase of 55%. Metallurgy BU has been significantly benefited by its competitive production cost structure, higher LME prices as well as high aluminium premiums, which for Southeastern Europe have settled at record levels. Premium billet price jumped in the first quarter of the year by 348%, at an average price of 1,464$/tn, from 327$/tn in Q1:21. Alumina Price Index (API) also recorded a significant increase of 40% in Q1 2022, compared to the corresponding period of 2021, mainly due to the reduced production from both China and Ukraine (Rusal’s Nikolaev alumina refinery), as well as the significantly higher energy costs in the production process.

§  The Renewables & Storage Development (RSD) BU: RSD recorded a strong start to the year in terms of profitability. In particular, turnover came in at €120m in Q1 2022 (11% of total turnover), 27% higher over the corresponding period of 2021, while EBITDA rose to €12m, vs €5m in Q1 2021, posting a 128% increase as well as a doubling of its EBITDA margin. The total capacity of BOT portfolio for projects in various stages of development came in at c.5GW. Regarding third-party EPC projects, RSD continues uninerrupted execution in countries like Spain, UK, Greece, Uzbekistan and Chile, with the contracted backlog standing at €214 million, while another €69 million are in negotiation stage. Regarding third-party EPC projects, RSD continues uninerrupted execution in countries like Spain, UK, Greece, Uzbekistan and Chile, with the contracted backlog standing at €214 million, while another €69 million are in negotiation stage.

§  Sustainable Engineering Solutions (SES) BU: Q1:22 turnover stood at €66, (6.4% of Group’s turnover), while EBITDA came in at €6m compared to €11m in the corresponding quarter of the previous year. SES’s expected weaker Q1 2022 performance, owing mainly to the fact that a number of projects are in the final stage of construction or even in the completion stage. During Q1 2022, in an effort to strengthen its backlog, SES has concluded significant agreements with projects both in Greece and abroad. Specifically, the BU signed engineering, procurement and construction contacts (EPC) for three open-cycle gas turbine (OCGTs) power plant projects in the UK, with contractual value of c.€330 million, establishing its presence in the UK market. SES’s signed backlog rose to €1.07 billion, while including projects in mature stage of contracting, total pipeline reaches c.€2.4 billion.

The company said that in the upcoming AGM, in June, profitability guidance will be updated, taking into consideration the significant progress of the investments across all Business Units. In other news on May 3, the company bought 18,200 shares at €17.6340/share for a total amount of €320.939K. Total treasury 4,211,431 shares or 2.9473% of share capital.  Q1:22 figures support management profitability guidance for the year (€260m with €500m EBITDA) and provide some space for rerating. Shares trade at 7.8x EV/EBITDA and 10.1x PE. We remain positive for the stock.

The following table summarizes results vs our Q1:22 estimates:

Segmental review (eur, mil)

Q1:21

Q1:22

y-o-y

Q1:22 Est.

Vs. Est.

Metallurgy revenues

148

213.9

44.5%

198.0

7.4%

EPC/SES & RSD revenues, of which

184.9

186.4

0.8%

322.3

-72.9%

  EPC/SES revs

90.8

66.5

-26.8%

109.5

-64.6%

  RSD revs

94.1

119.9

27.4%

118.8

0.9%

Power & Gas revenues

191.1

641.2

235.5%

574.6

10.4%

Group Revenues

524

1041.5

98.8%

1094.8

-5.1%

Metallurgy EBITDA

35.1

54.6

55.6%

49.5

9.3%

EPC/SES & RSD EBITDA, of which:

16.5

18.1

9.7%

17.5

3.3%

  EPC/SES EBITDA

11.2

6.1

-45.5%

10.5

-72.1%

  RSD EBITDA

5.3

12

126.4%

7

41.7%

Power & Gas EBITDA

29.2

60.8

108.2%

60

1.3%

Group EBITDA (reported)

80.8

133.5

65.2%

127

4.9%

Group EBITDA margin

15.4%

12.8%

-260 bps 

11.6%

+122 bps 

Group Net Profits (reported)

37.3

67.2

80.2%

62.2

7.4%

Group Net margin

7.1%

6.5%

-67 bps 

5.7%

+77 bps 

GEK TERNA: On May 3, the company bought 14K shares at €9.5423/share for a total amount of €133.593K.

MOH: On May 3, the company bought 16,000 shares at €14.852/share for a total consideration of €237.630K. Total treasury at 785,796 shares or 0.71% of share capital at €13.061/share average acquisition cost.

LAMDA DEVELOPMENT: On May 3, the company bought 31K shares at €6.192/share for a total consideration of €191.936K. Total treasury at 1,708,933 shares or 0.967% of share capital.

 

SPACE HELLAS: On May 4, the company bought 831 shares at €9.57179/share for a total consideration €7.954K. Total treasury at 98,403 shares or 1.524085% of share capital.

PROFILE: On April 29 and May 3, the company bought 1,900 shares for a total consideration of €13.615K (€7.165/share).

OTE: Over the period April 28 to May 4, the company bought 274,094 shares at €18.05/share for a total consideration of €4.95mn. Total treasury stands at 6,464,636 shares or 1.443% of share capital. AGM on May 25 to clear Fy:21 gross dividend distribution €0.558/share and 5,617,282 treasury shares cancellation.