Daily report 31-05-2013

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Manos Chatzidakis <mchatzidakis@beta.gr>	.
Market Comment General index fell below the 1,000-point mark on Thursday after 16 sessions on skepticism regarding the terms set by Piraeus Bank for its share capital increase and strong pressure in NBGs pre-emption rights. On a monthly basis General index returned to its starting point (974.09) despite the rise of 15% during May. Today we expect another volatile session following banking sector fluctuations while some flows are expected from MSCI rebalancing. We note also that today is the last day for Alpha bank rights exercise. Regarding Q1 results after 130 announcements (52%) overall picture is not optimistic as 62% of the companies are posting losses and EBITDA is down by 18% while bottom line is positive to €6.4bn affected by positive one offs in the banking sector (~€6bn). Due day for ASE listed companies is today with Eurobank announcing its Q1 after-market hours and concluding the official announcement period. Distribution of Profitable/Loss companies Q1 (50% of announcements) p Profitable 50 q Loss 80 pp Increase of Profitability 17 qq Increase of Losses 30 p Reduction of Profitability 20 q Reduction of Losses 35 M Profits Turn arround 13 L Loss Reverse 15           In the Spotlight Greece - Sentiment: Economic sentiment in May reached its highest point in the last five years in Greece, according to Eurostat data released on Thursday. The Greek economic sentiment index appears to be steadily continuing a rising course which started in January, reaching 93.8 points this month, as there has been an improvement in all sectoral business expectation indices. Greece - Privatizations: Hellenic Privatisation Fund picked two groups to proceed to the second phase of a competition to sell a 51 percent stake in Thessaloniki Water Supply & Sewage Co. SA. Suez Environnement Co and Aktor Concessions SA comprise the first group while Mekorot Development and Enterprise Ltd. leads the second group which includes Miya Water Projects Netherlands BV and Terna Energy SA. Bank Of Cyprus: The suspension on trading shares of Bank of Cyprus Plc has been extended until July 31. FFGroup (Results 3M 2013): FFGroup reported better than expected Q1 on strong Asian Sales and double digit increase in Luxury sales segment. Sales revenues increased by as much as 7.4% reaching €246.3 million, from €229.3 million in the previous quarter. Gross profit increased by 2.6% and reached €124.1 million. The relevant margin declined slightly to 50.4% Operating profit reached €47 million against €42.7 million in 2012, posting an increase of 10%. Profit after tax reached €30.3 million against €22.1 million for the previous quarter, posting an increase of 37.2%. EBITDA reached €53.2 million increased by as much as 8.4%, with the respective margin at 27.4% from 27.2% in 2012. In specifics: ¡         Revenues from the Jewellery, Watches and Accessories activity increased significantly by 14.8% to €146.7 million ¡         Travel retail segment increased by 2.1% from € 40.1 million in 2012 to €40.9 million ¡         Revenues from Department stores increased by 3% to €30.7million. ¡         Revenues of Retail/Wholesale of footwear and apparel decreased by 4.9% to €27.2 million. ¡         Other sales reached to €0.5 million. FFGroup Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 229,305  246,350  7.4% EBITDA 49,095  53,214  8.4% (% of sales) 21.41%  21.60%  +19 bps Net Income 22,116  30,339  37.2% (% of sales) 9.64%  12.32%  +267 bps PPC (3M 2013 Results): PPC reported a better than expected set of results on lower operational cost favorable production mix and lower Capex. Specifically: ¡         Turnover reached € 1,486.8 m, compared to € 1,549.8 m in 1Q2012, a decrease of € 63 m (-4.1%).  PPC’s total electricity sales, including exports, decreased by 273 GWh (-2.1%) to 12,773 GWh, mainly due to lower demand, despite the slight market share recovery in the retail market by 1.3 percentage points. ¡         ΕΒΙΤDΑ in 1Q2013, despite the turnover reduction, amounted to € 254 m compared to € 232 m in 1Q2012, increased by € 22 m (+9.5%), mainly as a result of the reduction of the total energy balance cost by € 198.2 m (-20.1%), with EBITDA margin reaching 17.1% versus 15% in 1Q2012. If we do not take into account the positive impact of the reversal of a € 52.7 m provision that was recorded in 1Q2012, relating to the settlement of overdue receivables for electricity consumption by the Attica region traffic lights, then the EBITDA margin in 1Q2013 (17.1%) compares to an adjusted EBITDA margin of 11.6% in 1Q2012. ¡         Expenditure for liquid fuel, natural gas and energy purchases decreased by € 181.7 m, a decrease of 22.1% compared to 1Q2012, mainly driven by the lower expense for natural gas and to a lesser extent for liquid fuel. ¡         The total reduction of payroll cost, including capitalized payroll, between the two periods amounted to € 4.8 m (-1.8%). 1Q2012 financial figures do not include payroll cost of € 2.1 m of the spinned off segment of the former Hellenic Transmission System Operator to IPTO. Taking into account said cost, total reduction of payroll cost between the two periods amounts € 6.9 m (-2.6%). Τhe net decline in the number of permanent employees on payroll amounted to 899, from 20,858 on 31/3/2012 to 19,959 on 31/3/2013. ¡         In 1Q2013, pre-tax profits amounted to € 45.1 m compared € 15 m in 1Q2012, increased by € 30.1 m. Furthermore, the re-measurement of the deferred tax position of the companies of the Group due to the rise in the nominal tax rate in Greece from 20% to 26% resulted to a positive impact of € 4.3 m. on net profitability for 1Q2013, resulting to net profit of € 49.4 m compared to net losses of €1.4 m in the respective period of the previous year. ¡         Net financial expenses slightly decreased to € 54.7 m (-7%), from € 58.8 m in 1Q2012, mainly due to the decrease of net debt between the two periods. ¡         Capital expenditure in 1Q2013 amounted to € 176.5 m. compared to € 253.9 m. in 1Q2012, reduced by € 77.4 m, while, as a percentage of total revenues it declined to 11.9% from 16.4%. Excluding network users’ contributions for their connection to the network (€19.7 m. and € 38.1 m. in 1Q2013 and 1Q2012 respectively), which fund a significant part of distribution projects, capital expenditure amounted to 10.7% and 14.3% of total revenues in 1Q2013 and 1Q2012 respectively. ¡         Net debt amounted to € 4,645.4 m, a reduction of € 204.9 m. compared to 31.3.2012 (€ 4,850.3 m.) or € 33.6 m compared to 31.12.2012 (€ 4,679 m.). PPC Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 1,549,831  1,486,800  -4.1% EBITDA 231,875  254,000  9.5% (% of sales) 14.96%  17.08%  +212 bps Net Income -1,410  49,400  3603.5% (% of sales) -0.09%  3.32%  +341 bps Hellenic Petroleum (3M 2013 Results): Hellenic Petroleum announced a weak quarter due to lower utilisation rates high one offs and sales mix. In specifics: ¡         1Q12 Adjusted EBITDA at €38m (-49% y-o-y) reflects the negative impact of domestic market demand drop (mainly HGO driven) on refining and retail business as well as the slower Elefsina ramp-up and contribution to profits ¡         Reported results were affected by inventory losses on declining prices at the end of 1Q (reversed since then) as well as higher depreciation and financing costs; EBITDA was reported at €-12m and NI at €-78m. One-off impact on deferred taxation from corporate tax rate increase to 26% at €11m ¡         Net Debt at €2.2bn, reduced y-o-y, with Gearing (D/CE) at 47%. Positive pre WC cashflow as Capex reverts to maintenance mode Key highlights and contribution for each of the main business units were: ¡         Refining, Supply & Trading: Domestic Refining Adjusted EBITDA at €23m (-58%), on lowest ever heating diesel demand in Greece and prolonged Elefsina optimisation process.  Improved operations at the Thessaloniki refinery, which also faced similar issues during its restart and ramp-up in 1Q12, following its own upgrade. Elefsina operation, albeit at lower utilisation than planned, led to increased total production at 2.9MT (+2% vs 1Q12) and increased middle distillates yield by 17%. Increased exports to 1.3MT, partly offset domestic market decline, driving sales to 2.8MT ¡         Domestic Marketing: Lower  volumes, led by heating diesel due to the duty increase and the economic crisis, as well as pressure on margins led to an Adjusted EBITDA of €-3m. Autofuels sales overall down by 5% with market shares gains recorded. C&I and Aviation sustained performance, while marine fuels sales were affected by credit considerations. Fixed cost base reduced by 6%, as the transformation project yields savings in rental and maintenance costs, partly offsetting the losses suffered due to volume and margin losses. ¡         International Marketing: International Marketing Adjusted EBITDA at €7m, flat vs 1Q12, as margin improvement and sustained volumes offset difficult macro environment. Performance in all markets was positive, while the Cyprus banking and sovereign debt crisis led to a provision of €4m. ¡         Petrochemicals: Seasonally strong PP margins underpin profitability, as prices remain high leading to an EBITDA of €14m, (+71% vs 1Q12). Higher propylene production in Aspropyrgos y-o-y, supporting vertical integration with Thessaloniki PP complex. ¡         DEPA contribution to Group results at €31m (vs €33m in 1Q12), on resilient DESFA performance.  ELPEDISON EBITDA at €13m (-15% y-o-y), on 8% lower electricity demand and reduced natural gas power generation. Hel. Petroleum Results Q1 2013 In m. Euro 2012 2013 Δ Adjusted EBITDA 76 38 -50.0% EBITDA 108 -12 -111.1% Adjusted Net Income 45 -21 -146.7% Net Income 71 -78 -209.9% Other Q1 results : Lamda Development Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 19,966  18,933  -5.2%  EBITDA 6,781  7,714  13.8%  (% of sales) 33.96%  40.74%  +678 bps  Net Income 3,384  -11,148  -429.4%  (% of sales) 16.95%  -58.88%  -7,583 bps  Viochalco Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 817,877  733,361  -10.3%  EBITDA 36,347  29,904  -17.7%  (% of sales) 4.44%  4.08%  -37 bps  Net Income -14,672  -41,160  -180.5%  (% of sales) -1.79%  -5.61%  -382 bps  Info-Quest Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 67,629  67,888  0.4%  EBITDA 2,045  2,705  32.3%  (% of sales) 3.02%  3.98%  +96 bps  Net Income 83  117  41.0%  (% of sales) 0.12%  0.17%  +5 bps  EYATH Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 19,256  18,348  -4.7%  EBITDA 6,491  8,661  33.4%  (% of sales) 33.71%  47.20%   +1,350 bps  Net Income 6,266  6,483  3.5%  (% of sales) 32.54%  35.33%  +279 bps  Ellactor Results Q1 2013 In thous. Euro 2012 2013 Δ Sales 280,653  260,091  -7.3% EBITDA 51,724  52,638  1.8% (% of sales) 18.43%  20.24%  +181 bps Net Income 2,369  -17,247  -828.0% (% of sales) 0.84%  -6.63%  -748 bps   Manos Chatzidakis Head of research Beta Securities S.A. 29 Alexandras Ave. GR - 11473 Athens, Greece