7/8/14

Market Comment - In the Spotlight by Manos Chatzidakis

  Market Comment

Wednesday saw another one - the eighth consecutive - session ending lower, with the composite index closing below 1,100 points following a daily drop of 2.66 pct, to end the day at 1,093.51 points. Turnover reached €252.14ml the highest since June 25th.  

It appears that the Greek market followed its European peers' downward trend, based on investors' geopolitical worries due to retaliatory measures decided by the Russian President as a reaction against several waves of sanctions against Russia by the West, over the Ukraine issue.

Short term losses could trigger a strong reaction in the beginning of today’s session. However, uncertainties in geopolitical front may keep volatility high and affect market trend accordingly.

FTSE-25 stock returns since July 25

FTSE-25
06/08/2014
25/07/2014
Δ(%)
COCA COLA
17.45
17.62
-1.0%
ATHENS WATER
9.45
9.66
-2.2%
FFGROUP
30.90
32.05
-3.6%
EUROBANK PROPERTIES
9.32
9.67
-3.6%
OLP
17.01
17.70
-3.9%
OPAP
11.87
12.53
-5.3%
JUMBO
10.75
11.57
-7.1%
PPC
10.31
11.14
-7.5%
MOTOR OIL
7.65
8.29
-7.7%
ΙΝΤRALOT
1.72
1.87
-8.0%
TERNA ENERGY
3.65
3.97
-8.1%
GEKTERNA
3.46
3.79
-8.7%
HEL. PETROLEUM
5.50
6.04
-8.9%
METKA
11.45
12.58
-9.0%
HEL. EXCHANGES
7.24
7.99
-9.4%
MYTILINEOS
6.020
6.68
-9.9%
ALPHA BANK
0.57
0.64
-9.9%
ELLACTOR
3.54
3.97
-10.8%
MIG
0.42
0.47
-11.3%
VIOHALCO
3.91
4.43
-11.7%
HTO
9.54
10.85
-12.1%
TITAN
20.45
23.51
-13.0%
NBG
2.230
2.58
-13.6%
EUROBANK
0.304
0.360
-15.6%
BANK OF PIRAEUS
1.26
1.66
-24.1%
 

Greece/CPI:  ELSTAT announced that Greece's consumer inflation rate slowed to -0.7% in July from -1.1% in June and compared to -0.7% figure recorded in July last year.

Attica Holdings/MIG: Attica Holdings (a member of Marfin Investment Group) announced EUR75m agreement for a comprehensive, long-term refinancing of its current debt with Fortress Investment Group. Tellingly, Attica Holdings agreed that investment funds under management by Fortress Investment Group (with total assets under management of more than USD60bn) will invest EUR75m in Attica Group. In this context, Fortress will fully cover Blue Star Ferries Shipping’s (100% owned by Attica Holdings) two 5-year bond issues guaranteed with liens (including an early repayment clause) for a total value of EUR75m.

Flexopack: As of today the shares of the company are traded on the ATHEX under the final par value of € 0.54 per share, and excluding the right to participate in the capital return of € 0.05 per share - through a cash payment - to the shareholders of the company.   

Attica bank:  As of today the 4,233,152 new shares of the bank are admitted to trading on the ATHEX following the conversion from 4,233,152 bonds, at a conversion price of € 0.30 per share. Total number of the Bank’s listed shares amounts to 1,045,794,145 shares.

HTO/Byte: The OTE-Byte partnership signed yesterday a contract with "Social Security eGovernment S.A" for the development of an electronic prescription system for the State, as well as for the provision of relevant support services.  The contractual value of the project is 11.96 million euors plus VAT, while the project has a completion period of 18 months.

HTO (Results 2Q/H1 2014):  HTO will announce its 2Q/H1 14 results today before the opening of the market. The Group is expected to announce recurring net profits of 59 million in the second quarter from 79.1 million the same period last year (-21% y-o-y). On adjustment basis (excluding the sale of Globul) net profits are up by 3%. Q2 Turnover will settle at 960m (Fixed line Greece -4%, Cosmote -6%, Romtelecom +3%) decreased by -4% while EBITDA is expected down by 11.4% at 340m. Despite the improvements in operating costs Q2 is negatively affected by MTR cuts in Romania.
HTO’s management will host a conference call at 17:00 (GR Time) following the release, to review the results. Focus on Nova bid, trends in domestic market and the upcoming tender for the renewal of spectrum licenses.

Conference call details:
¡  Greek participants 00800 4413 1378
¡  UK participants 800 953 0329
¡  US participants 1866 819 7111

Frigoglass (Results 2Q/H1 2014):

The company released today, before the market opening, a weak set of H1 2014 results, coming in below market expectations at the profitability level – broadly in line in terms of Frigoglass reported H1 2014 group sales, EBITDA and net losses (ex-one off items) of EUR270m (-14% y-o-y), EUR36.6m (-23% y-o-y) and EUR3.4m (vs net earnings of EUR9.9m in 1H13), hit by deteriorating market dynamics in the cool division (Ukraine, Turkey, Africa), margin erosions (mostly due to lower utilization rates and FX movements), held back also by the fire incident at the Indian plant (early April), which caused disruptions in the manufacturing process. 

On the flip side, we welcome Frigoglass progress at the operating cost front in Q2, as well as glass divisions 8% y-o-y sales growth despite negative FX movements.Amid challenging market conditions, Frigoglass H1/Q2 2014 overall performance leaves a lot to be desired. Having said that, we expect a somewhat improved picture for H2 2014 thanks also to favorable y-o-y base effects.

Conference call details (16:00 Athens Time/14:00 London)
¡  Greek participants ++30 210 969 6444
¡  UK/Other International participants +44 203 139 4830
¡  US participants (+1 718 873 9077) - Participant Access Code 13868825#.

Frigoglass
Results H1 2014
Estimates H1'14
In thous. euro
2013
2014
Δ
 H1 14 E
Δ (Est)
Sales
312,997 
270,163 
-13.7% 
273,000
-1.0%
Q2
172,378 
145,916 
-15.4% 
148,753
-1.9%
EBITDA
47,618 
36,568 
-23.2% 
38,000
-3.8%
(% Sales)
15.21% 
13.54% 
-168 bps 
13.92%
-38 bps
Q2
27,350 
20,490 
-25.1% 
21,922
-6.5%
(% Sales)
15.87% 
14.04% 
-182 bps 
14.74%
-69 bps
Net Income
9,871 
-39,440 
-499.6% 
200
-19820.0%
(% Sales)
3.15% 
-14.60% 
-1,775 bps 
0.07%
-1,467 bps
Q2
6,245 
-36,037 
-677.1% 
3,603
-1100.2%
(% Sales)
3.62% 
-24.70% 
-2,832 bps 
2.42%
-2,712 bps

Coca Cola (Results 2Q/H1 2014):  

CCHBC announced a broadly in line set of result in Turnover and EBITDA while missed consensus net earnings estimate by 4%. In specifics:

¡  Sales in Q2 reached 1.852bn (-5% vs Q2 2013). Volume declined by 3% in the second quarter and the first half of 2014. Established markets, which had a slow start to the year, showed a sequential improvement with 2% decline in the quarter, bringing the half year decline rate to -4%. Italy, Ireland and Switzerland showed sequential improvement, partly due to Easter falling in the second quarter. Volume in Developing markets declined by 5% in the quarter. Hungary on the other hand, demonstrated growth in nearly every category. This segment has also shown an improving trend compared to the first quarter, bringing the half-year decline rate to under 7%. Emerging market volumes, down 3% in the second quarter and 2% in the first half.
¡  Comparable EBIT amounted to €194 million in the quarter, €15 million higher than the prior period, leading to a 130bps margin expansion to 10.5%. EBIT growth realised in Developing and Established markets, compensated for the EBIT decline in Emerging markets driven by Russia and Ukraine. Overall, positive developments in currency-neutral net sales revenue per case, lower input costs and lower operating expenses more than offset the impact of unfavourable foreign exchange movements and the shortfall in volumes.
¡  Profit after tax came at 134.4m while FCF in Q2 reached 172.6m (vs 137.2 in Q2 2013). Management stated that Russian market trends lead to a more cautious outlook for H2.

Conference call details (11:00 Athens Time/09:00 London):  
¡  Greek participants +30 210 969 6444
¡  UK/Other International participants +44 203 139 4830
¡  US participants +1 718 873 9077 - Participant Access Code 13868825#.

Mytilineos (Results 2Q/H1 2014):  

Mytilineos announced a good set of results in line with our estimates. METKA beat our and market estimates on bottom line due to lower tax rate and lower financials. In specifics:

¡  The Group posted increased profitability, strong cash flows and a strong decline of net debt to €345.9 million, down from €509.7 million at the end of 2013.
¡  Group’s consolidated turnover for the 1st semester of 2014 stood at €653.0 million against €730.8 million in the first semester of 2013. The improved performance of the Metallurgy and EPC sectors drove EBITDA up by 12% to €120.3 million, up from €107.7 million for the same period in 2013. Similarly, net profit after tax and minority rights stood at €24.1 million, up 71% from €14.1 million in the previous year.
¡  EPC Projects Sector (METKA) made the largest contribution to the Group’s financial results. METKA posted a turnover of €361.9 million for the 1st Semester of 2014, up 25% from €289.9 million for the same period in 2013. Similarly, EBITDA rose to €57.7 million from €45.3million for the same period in 2013. METKAs net cash position reached 285m.
¡  Metallurgy & Mining Sector posted a turnover of €204.8million against €224,5million for the same period in 2013, a decline caused by the weakened Aluminium prices at the LME, especially during the 1st Quarter of 2014. In contrast, EBITDA increased to €23.7 million, up from €15.3 million in the 1st Semester of 2013, reflecting the successful implementation of the “MELLON” programme, and the drastic cost improvements introduced, which safeguarded the global competitiveness of ALUMINIUM S.A.
¡  The Energy Sector posted a turnover of €90.0 million for the 1st Semester of 2014 against €219.7 for the same period in 2013, as a result of reduced demand and of regulatory changes in the operation of the market. Earnings before interest, tax, depreciation and amortisation (EBITDA)stood at €42.4 million against €48.6 million for the 1st Semester of 2013.
¡  Outlook is positive. The recovery of aluminium prices, the sustained record-high levels of Premiums and the strong performance of the US Dollar against the other currencies create positive prospects for an improved Sector performance in the 2nd Semester of 2014, provided that the State will proceed with the implementation of the recently announced measures regarding the reduction of the industry energy cost. Also METKA fast execution of MENA projects will continue enhancing EPC sector profitability. Management stated that in H2 expects significant lower financing cost.

Mytilineos
Results H1 2014
Estimates H1'14
In thous. euro
2013
2014
Δ
 H1 14 E
Δ (Est)
Sales
730,799 
656,405 
-10.2% 
650,000
1.0%
Q2
371,755 
311,825 
-16.1% 
305,420
2.1%
EBITDA
93,869 
120,579 
28.5% 
118,000
2.2%
(% Sales)
12.84% 
18.37% 
+552 bps 
18.15%
+22 bps
Q2
44,514 
53,328 
19.8% 
50,749
5.1%
(% Sales)
11.97% 
17.10% 
+513 bps 
16.62%
+49 bps
Net Income
12,537 
23,366 
86.4% 
24,000
-2.6%
(% Sales)
1.72% 
3.56% 
+184 bps 
3.69%
-13 bps
Q2
1,909 
8,156 
327.2% 
8,790
-7.2%
(% Sales)
0.51% 
2.62% 
+210 bps 
2.88%
-26 bps

METKA
Results H1 2014
Estimates H1'14
In thous. euro
2013
2014
Δ
 H1 14 E
Δ (Est)
Sales
289,930 
361,867 
24.8% 
360,000
0.5%
Q2
155,937 
172,807 
10.8% 
170,940
1.1%
EBITDA
45,287 
57,645 
27.3% 
58,000
-0.6%
(% Sales)
15.62% 
15.93% 
+31 bps 
16.11%
-18 bps
Q2
22,346 
24,925 
11.5% 
25,280
-1.4%
(% Sales)
14.33% 
14.42% 
+9 bps 
14.79%
-37 bps
Net Income
46,401 
54,496 
17.4% 
49,000
11.2%
(% Sales)
16.00% 
15.06% 
-94 bps 
13.61%
+145 bps
Q2
30,303 
29,056 
-4.1% 
23,560
23.3%
(% Sales)
19.43% 
16.81% 
-262 bps 
13.78%
+303 bps

Other Q2/H1 results

Petropoulos
Results H1 2014
In thous. euro
2013
2014
Δ
Sales
24,915 
30,373 
21.9% 
Q2
14,673 
18,972 
29.3% 
EBITDA
1,514 
2,146 
41.7% 
(% Sales)
6.08% 
7.07% 
+99 bps 
Q2
1,085 
1,599 
47.4% 
(% Sales)
7.39% 
8.43% 
+103 bps 
Net Income
321 
915 
185.0% 
(% Sales)
1.29% 
3.01% 
+172 bps 
Q2
531 
959 
80.6% 
(% Sales)
3.62% 
5.05% 
+144 bps 

Ideal
Results H1 2014
In thous. euro
2013
2014
Δ
Sales
15,528 
17,638 
13.6% 
Q2
7,396 
9,067 
22.6% 
EBITDA
624 
783 
25.5% 
(% Sales)
4.02% 
4.44% 
+42 bps 
Q2
160 
467 
191.9% 
(% Sales)
2.16% 
5.15% 
+299 bps 
Net Income
334 
423 
26.6% 
(% Sales)
2.15% 
2.40% 
+25 bps 
Q2
-3 
305 
10266.7% 
(% Sales)
-0.04% 
3.36% 
+340 bps 

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