MARKET COMMENT by Manos Chatzidakis

     Market Comment

Fitch report extended the rally above 1100 level posting a 3.7% daily gains. Banks remained in the spotlight as the momentum remains strong. However the sector index has doubled since the end of April and this fast move should be considered as it increases the chances of a sharp correction. Technically the sector is overbought, fundamentals are in the foreground and short term trading is giving the tone to the market.

¢           In the Spotlight

Greece/ GDP: The Greek economy shrank by 5.3 pct in the first quarter of 2013, compared with the corresponding period in 2012, after shrinking by 5.7 pct in the fourth quarter of 2012, Eurostat said on Wednesday. The eurozone economy shrank by 1.0 pct in the January-March period, compared with the same period last year, for a decline of 0.2 pct compared with the fourth quarter of 2012. In the EU-27, the economy shrank by 0.7 pct on an annual basis and by 0.1 pct on a quarterly basis.

Greece/ Tourist arrivals: Greece’s largest port announced that the number of cruise-ship tourists increased to 97,068 in three months to March 31 from 77,847 in the same period of 2012, according to an e-mailed statement from the Piraeus Port Authority.

Mytilineos/METKA (Results 3M 2013): Mytilineos Group posted a consolidated turnover of €358.0 million, against €358.6 million in 2012. The key factor that helped sustain turnover at last year’s levels was the balanced contribution of the Group’s three key business activity sectors. The group generated positive FCF by €88m (vs €-56m last year) and reduced group debt by €49m. Specifically:

¡         The performance of the EPC Projects Sector was decreased as the turnover of the Group’s subsidiary METKA for the first quarter of 2013 stood at €134 million, down from €170.7 million in 2012. Earnings before interest, tax, depreciation and amortisation (EBIDTA) stood at €22.9 million against €27.8 million last year, with the EBITDA profit margin remaining high (at 17.1%).Net profit after tax and minority rights stood at €16.1 million, down from €23.5 million for the same quarter in 2012. Syria sales was the main difference between the two quarters (Q1 2012 €80m – Q1 2013 no contribution). FCF in first quarter was positive by €15m while METKA also posted interest gains of €7m. Backlog remains at €1.7bn (including €724m Syria II) and net cash position in 31.3 was €71m.

¡         The Group’s Metallurgy & Mining Sector posted the biggest improvement in performance compared to the same period last year, as a result of the successful implementation of the “MELLON” drastic cost reduction programme. Although at €112 million the Sector’s turnover was at the same levels as in the first quarter in 2012 (€117.8 million), this year saw the Sector returning to profitability, with earnings before interest, tax, depreciation and amortisation (EBITDA) standing at €6.3 million, against €1.9 million of losses in 2012. This development is particularly significant, as it was achieved during a period characterised by low prices for aluminium in the international markets, high energy costs and increased taxation. AoG turned positive helped by delivery premiums as the average Aluminium price during the quarter was settled at 2003 $/tn (-8% y-o-y).

¡         The Energy Sector boosted significantly the Group’s results for the first quarter of 2013. In particular, the Sector’s turnover stood at €113.9 million, up from €77.4 million for the respective quarter in 2012, and represents 32% of the Group’s total consolidated turnover. Correspondingly, earnings before interest, tax, depreciation and amortisation (EBITDA) climbed to €21.6 million from €14.5 million for the same period last year, boosted by the entry into operation of the Korinthos Power plant. Despite weak power demand (-5%) and unfavourable weather conditions power production was 95% y-o-y accounting for 11% market share. (44.5% of natural gas production)

ΜΕΤΚΑ	Results Q1 2013			Estimates Q1'13
In thous. Euro	2012	2013	Δ	3M 13 E	Δ (Est)
Sales	170,746	133,993	-21.5%	131,000	2.3%
EBITDA	27,735	22,941	-17.3%	21,000	9.2%
(% of sales)	16.24%	17.12%	+88 bps	16.03%	+109 bps
Net Income	23,525	16,098	-31.6%	15,500	3.9%
(% of sales)	13.78%	12.01%	-176 bps	11.83%	+18 bps

Mytilineos	Results Q1 2013			Estimates Q1'13
In thous. Euro	2012	2013	Δ	3M 13 E	Δ (Est)
Sales	360,059	359,044	-0.3%	355,000	1.1%
EBITDA	38,084	49,355	29.6%	55,000	-10.3%
(% of sales)	10.58%	13.75%	+317 bps	15.49%	-175 bps
Net Income	9,951	10,628	6.8%	12,500	-15.0%
(% of sales)	2.76%	2.96%	+20 bps	3.52%	-56 bps

PPC/Privatisations: The Greek government on Wednesday unveiled a plan for the restructuring and privatisation of the Public Power Corporation (PPC) - the country's electricity utility - which envisages the creation of a "small PPC" with representative electricity production units to be sold to private investors, in its search for a strategic investor for PPC and the selloff of 40 pct of the electricity grid networks. The plan, presented by the ministry of Environment, Energy and Climate Change, has a timetable of completion by 2015 and is included in a memorandum of economic policy agreed with the troika. Ministry officials said the plan will raise revenue for the state through the privatisation of PPC, while it will also ensure the creation of healthy competition in the market and the liberalisation of the electricity market in Greece. More analytically, the plan envisages:

¡         The separation and privatisation of the System Administrator paving the way for PPC's exit from energy grid networks. In the first phase, to be completed this year, the plan envisages the entry of an investor through a share capital increase scheme offering up to 49 pct of the equity capital and the management. In the second phase, to be completed in the second quarter of 2014, the investor will be able to acquire at least 51 pct of the equity capital, with the state holding a statutory minority stake.

¡         Creating a new vertical electricity company, which will own around 30 pct of PPC's existing production capacity and new units, along with a relative percentage of PPC's commercial activities. It will include lignite, hydro-electric and natural gas units. This project will be agreed on in consultation with the European Commission by the end of 2013, although early estimates are for 1,400 MW of lignite units, 500 MW of hydro- electric and 500 MW of natural gas units. The tender to sell the so-called "small PPC" will be made with the Hellenic Republic Asset Development Fund. These procedures are expected to be completed in the first quarter of 2015.

¡         Privatization of PPC. Under the plan, the state will offer 17 pct of the company's equity capital to a strategic investor - from 51 pct currently owned by the state. This process is expected to be completed by the end of 2015 or early 2016.

Plaisio: A Plaisio Computers annual regular general shareholders’ meeting on Wednesday approved a board plan to pay a 0.12 euros per share (gross) dividend to shareholders. The company said net dividend payment –after tax- will be 0.09 euros per share.

Coca-Cola HBC (Results 3M 2013): In the first quarter of 2013 volume remained in line with the prior year period. Volume increased by 7% in our emerging markets, fully offsetting 3% and 7% declines in our developing and established markets respectively.  Total net sales revenue was flat, while currency neutral net sales revenue per case increased by 1%, marking the seventh consecutive quarter of increase.  In the first quarter CCB registered a cash outflow of €40 million, compared to an outflow of €32 million in the same prior year period. The Board of Directors of Coca-Cola HBC AG decided to propose the distribution of a €0.34 dividend per share. First quarter is not indicative for the year and results are in line with market estimates.

Coca-Cola HBC AG's management will host a conference call with financial analysts, at 11:00 (GR), discussing the first quarter 2013 financial results. Participants should dial one of the following numbers:

¡         Greek participants: 00800 4413 1378

¡         US participants: +1 866 819 7111

¡         UK participants: 0800 953 0329

¡         Other Intl’ participants: +44 1452 542 301

Coca Cola	Results Q1 2013
In thous. Euro	2012	2013	Δ
Sales	1,433,400	1,431,900	-0.1%
EBITDA	81,700	83,300	2.0%
(% of sales)	5.70%	5.82%	+12 bps
Net Income	-28,900	-24,400	15.6%
(% of sales)	-2.02%	-1.70%	+31 bps