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Market Comment:
Across the board, the General Index ended at 1,286.88 units, with minor losses of 0.21%, after a fluctuation within a margin of 24 units. Approximately 20.7 million units worth €69.79 million (including 5.2 million in pre-agreed trade) were traded on Thursday, while a total amount of 75 shares declined, 54 rose and 152 remained unchanged.Most up stocks: HTO 7euros +4.79%, MIG 0.56euros +3.70%, OPAP 12.92euros +2.13%. Most down stocks: ATE 0.43euros -8.51%, Alpha Bank 3.30euros -4.62%, EFG 3.15euros -3.37%, BoC 2.12euros -3.20%. 10YR Bond Yields: 16.38% *10YR bond spread against German bunds -- 13.38 ppts *Euro -- U.S. $1.42
Results Review:
FF Group:
Revenues reached 219.2m euros (-4.4% yoy) [in line with estimates], ebitda at 43.5m euros (-20%) [above estimates for 39m euros]. Profit after tax reached 22.9m euros (-22%) [above estimates for €18m euros]. Gross profit margins fell to 48% from 50.6% and ebitda margin fell to 19.8% from 23.5%.
Segmental reporting:
Jewellery revenues remained almost unchanged declining by 1.2% to 114.3m euros.
Travel revenues increased by 1% to 39m euros. Department stores decreased by 7.5% to 33.7%. Retail/Wholesale decreased by 19.5% to 30.4m euros. Other activities reached 1.6m increasing by 141%.
Q1 2011 is not directly comparable to the same quarter last year, due to missing Easter business throughout the first quarter 2011.
Conference Call Highlights:
Results were negatively affected from:
§ Increasing raw materials [in particular: Jewellery operation and Links of London]
§ Japan deterioration [jewellery operation]
§ Adverse economic conditions [retail -wholesale activity (48% of which comes from Greece)]
Projections for the rest of the year:
§ April & May show incredible well results for Travel retail, not because of increased traffic, but because of quality tourism. 2Q11 will be a better quarter for jewellery activity as well. Retail /Wholesale activity seems that it will continue suffering for the rest of the year.
§ FY 2011 Capex at 20m euros [1Q11 4.1m euros] mostly invested in retail and travel
The Extraordinary General Meeting approved the Increase of Share Capital of the Company by 1.9m euros in cash, through the issuance of 6.36m new common nominal intangible shares of the Company with voting rights, with a par value of 0.30 euros each and subscription price of 13.30 euros with the preference right of the old shareholders cancelled in favour of FOSUN.
PPC:
NI was better than anticipated at €93.3m [-63.8 yoy]. Turnover reached € 1,376.1m [-7.7% yoy], including an amount of € 27.7m reflecting network users’ contributions for connections to the network [1Q2010: € 48.2m]. ΕΒΙΤDΑ amounted to € 327.7m [-37.4% yoy], with ΕΒΙΤDΑ margin at 23.8%, compared to 35.1% in 1Q2010. The first quarter results reflect the increase of the energy balance cost and the negative impact from the remaining distortions in the retail market.
Total electricity sales, including exports, decreased by 360GWh [-2.8%], while the corresponding revenues declined by 9% yoy. Total electricity demand in Greece, increased in 1Q2011 by 300GWh [+2% yoy] to 15,370 GWh, with electricity sales and revenues in the domestic retail market decreasing by 3.8% and by 9.6% respectively. Volume of sales decreased significantly for commercial sector [-16.6% yoy] but increased by 12.1% yoy for the industrial High Voltage sector.
The expenditure for liquid fuel, natural gas and energy purchases increased by 27.5% yoy, mainly driven by the higher expense for energy purchases [€ 61.9 m] and the increase of the Special Consumption Tax on diesel [€ 19.4 m]. Operating expenses, excluding depreciation, increased by € 80.3 m [+8.3% yoy], provisions for bad debt, litigation and slow moving materials reached € 45.7m [+29% yoy], depreciation expense in 1Q2011 reached € 168 m [+14.8% yoy] and net financial expenses increased by 26.6% yoy, mainly due to the increase of the interest rates and to a lesser extent the increase of debt during the period. Payroll costs were significantly reduced by 20% yoy [€ 67.4 m] and CapEx was down by €60.3m.
2011 Expectations:
For the full year, PPC management expects the decline in revenues from electricity sales to be contained to 3.5% - 4% compared to 2010, with turnover marking app. a 2.5% decline. Assuming Brent oil price of $110/bbl and €/$ exchange rate of 1.37, EBITDA margin is estimated to be in the range of 19%-20%, mainly as a result of a worse energy mix and higher energy costs.
NBG:
Results & Conference Call Highlights:
§ Resilient results at €157mn, despite higher provisions (+21% yoy), with pre-provision earnings +27% yoy. NII stood at €991 [-4% yoy] impacted by weakening Turkish lira and higher interbank repos, Group NIM at 371bps. Trading income come in at €27m from €158m losses last year. Overall a better than anticipated performance. Domestic operations NI at €2m, Finansbank NI at TL326m maintaining a high NIM of 544bps
§ Expenses declined by 1% yoy overall and by 8% in Greece while ECB reliance was down by €3.2bn and GGB exposure by €555m.
§ Asset quality improvement in Turkey and stabilizing in SEE but conditions adverse in Greece with 90+dpd ratio at 9.2%.
§ Deposits in Turkey increased by 26% yoy [24.1bn TL] whereas customers deposits in Greece where down by 14% yoy and overall by 9% yoy. Group loans up by 2% yoy [+18% in Turkey]
§ Tier I ratio slightly reduced since the beginning of the year at 12.9% and Core Tier I ratio at 11.8%
Motor Oil:
We remind you that Motor Oil performed better than expected. Sales at €1,824m [+64% yoy], EBITDA at €118.4m [+230%] and NI at €62.4m [+399%]. Ebitda and net income include inventory gains. Production volume stood at 1,958 thousand metric tones (+19.7% yoy) accounting for 90% of total sales volume, despite the 3 weeks maintenance of the refinery unit.
Conference Call Highlights:
The strong results were due to:
§ The new CDU unit [started production on 2Q10]. With the new CDU now being fully on stream, refining margins performed significantly well [MOH delivered an adjusted blended margin of $51/ton (7% down y/y]. while production volumes grew 16% yoy.
§ Inventory gains (35m euros) and FX gains (19m euros)
Also,
§ Korinthos will start operating at the end of 3Q11 [as planned]
§ The company is gradually moving its debt down, while cash flow improvement is ready to support robust dividend payments
§ General meeting decided the return of €0.25/share capital return. Payment will take place on October
§ Strong refinery margins trend is expected to continue throughout 2011
§ Marketing margins suffered from higher oil prices
Marfin Bank:
NI at €71m, excluding a one-off gain of €53.4m from disposal of Australian subsidiary and special deposit tax in Cyprus NI at €20.6m. NII at €181.5m [+3% yoy] due to asset repricing and improved deposit spreads in Greece and Cyprus
1Q2011 Results Preview
Bank of Piraeus:
Posts results on Friday 27 May pre market. The bank is expected to deliver a weak set of results for another quarter. Consensus estimates for NII are at €305m [+4.1%] and NI is expected at €1.1m [-84.3%]. Provisions are expected at €171m increased by 28%. Domestic environment and recent events in Egypt will negatively affect bank’s operations. BoP in Q4 produced a very strong trading income that is not likely to be sustained in this quarter. Reduced loan volumes are expected to negatively impact Fee Income and an increase in NPLs is more than likely. Focus on cost cuts, international operations performance and asset quality.
Conference Call
Friday 27th May 2011, Time: 09:30 am (GR). In order to participate in the teleconference, please use one of the following telephone numbers: Greek participants:+30 211 180 2000 or +30 210 946 0800 UK participants:+44 (0) 800 368 1063, USA participants:+1 866 288 9315, Participants from any other country may choose any of the above numbers
Government
Gov - President K. Papoulias to meet tomorrow with all Greek party leaders
Privatizations – German Company Fraport that manages Frankfurt airport, said that it is interested in El. Venizelos airport
Macro
Greece's trade balance deficit dropped by 36.4 percent in March this year, resulting in a 33.4 percent decline for the first quarter of 2011, fuelled by rising exports and declining imports due to decreasing consumer demand
Corporate News
HTO/Government is expected to exercise its right to sell to DT very soon for the transaction to be completed by the end of June
ATE Bank/Greece's ATEbank said it plans to sell its banking participations in ATEbank Romania [74.12%], and participations in AIK Banka Serbia and FBBank as part of its restructuring plan
Sidenor/Package for 1.2% of the Company at €2.70/share
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