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Market Comment
Uncertainty prevailing after ECB’s statements, dragged the GI towards the negative side (-0.44% down) at 1,322. Most up stocks: Motor Oil 8.86euros (+3.50%), Hellenic Exchanges 5.15euros (+2.18%), Coca Cola 3E 17.68euros (+1.67%). Most up stocks: ATE 0.51euros (-3.77%), MIG 0.57euros (-3.39%), Hellenic Petrol 6.89euros (-3.37%). ECB’s disagreement on Greek debt reprofiling [not accepting Greek bond collateral] drives spreads even higher. 10YR Bond Yields: 15.6% 10YR bond spread against German bunds 12.88 ppts. Market awaits news on privatizations.
Results Review
Jumbo / released 9M results at high end of estimates. Sales stood at 373m euros (-5.53% yoy) [in line with estimates] relatively stable despite the adverse economic conditions. Gross margin fell to 51.6% from 52.7% affected from the management’s decision to absorb VAT prices. Ebitda stood at 93.2m euros (-13.2% yoy) [cons. 90m euros]. Ebitda margin at 25% slightly better than expected. After tax profits amounted to 64.3m euros (-0.13% yoy) [estimates: 63m euros]. Excluding the extraordinary tax contribution of 9.8m at the profits of the respective period last year, bottom line results dropped 13.2%.
A positive effect from the high selling Easter period is expected on the last quarter of the year.
The company reiterates its guidance for an -1% to 0% increase in sales.
Results Preview
Hellenic Petrol /Company will be reporting results on May 20th, post market.
Conference Call on the same day at 18:00 Athens Time (C.E.T. +1).Conference Phone GR +30 211 180 2000, Conference Phone UK +44 (0) 800 3681063,Conference Phone US +1 866 288 9315
Sales are expected to be increased, amounting to €2.6bn (+21.8%), EBITDA (reported) at €156.4m (+5.2%) and NI at €110m relatively to €42.8m in 1Q2010.
Domestic demand is expected to be reduced due to high prices, partially attributed to high taxation. Inventory effect on EBITDA is estimated at €80m.
Key issues: The Elefsina refinery upgrade and positive impact on margins, union relations, trends in the domestic market consumption and developments in DEPA privatization
Corporate
§ Intralot/No divided will be distributed. Company focus on lottery privatizations, generation of free cash flows, investments in technology and existing projects efficiency
§ Banks/Forthcoming 1q2011 results are expected to show a 5% reduction in operating costs
§ FFGroup/Signed memorandum of international strategic collaboration with Chinese Group Fosun that holds 9.5% of FF Group
§ Opap/Signed agreement for 14% decrease in salaries
§ PPC/Government considers selling 100% of its participation to the company, or sell 17% to a strategic investor
§ HTO/DT asks for personnel reduction
§ Bank of Piraeus /AGM at 10am local to decide on reverse split
ECO
Finance Minister George Papaconstantinou said the government will detail more than 6 billion euros in spending cuts and revenue measures over the next few days to meet the 2011 deficit target of 7.4 percent of GDP.
Greek Jan-April budget execution (final figures)
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