Hellenic Petroleum

ASE: ELPE

€2509.3m market cap

€8.21 last close

Hellenic Petroleum operates three refineries in Greece with a total capacity of 341kbd, and has sizeable marketing (domestic and international) and petrochemicals divisions.

Investment summary

Changes to bunker fuel regulation to be implemented on 1 January 2020 by the International Maritime Organization (IMO) will have major implications for both the refining and shipping sectors. Shipping costs will rise, sour crude discounts will widen, high sulphur fuel oil (HSFO 3.5%) demand will collapse, being replaced by increased demand for ultra-low sulphur fuel oil (ULSFO 0.5%) and marine gasoil (MGO 0.5%). In this note, we outline some of the options shippers and refiners are likely to consider ahead of 2020. We continue to believe that Hellenic (ELPE) is well placed given its high middle distillate yield, above average complexity and crude slate flexibility. Our valuation of €9.22/share (from €8.90/share when we last published) is based on a blend of DCF, EV/EBITDA and P/E multiples. Edison’s FY19 and FY20 financial forecasts include management guidance on the impact of IFRS 16.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 7995.0 833.0 502.0 121.0 6.8 5.7
2018A 9769.0 730.0 388.0 95.0 8.6 5.0
2019E 9941.0 746.0 393.0 96.0 8.6 3.5
2020E 9960.0 847.0 516.0 127.0 6.5 3.1
Last updated on 22/03/2019
Industry outlook

European refining will likely face continued challenges in the coming years as demand falls and refinery systems elsewhere (Asia/US) hold structural advantages. To offset this, changing regulations should put complex, middle distillate-orientated refineries such as ELPE’s in a strong position.

Last updated on 22/03/2019
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net debt (€m) 1366
Forecast gearing ratio (%) 59
Price performance
%
1m
3m
12m
Actual 4.2 9.8 3.8
Relative* (0.4) (5.7) 15.4
52-week high/low €8.6/€6.7
*% relative to local index
Key management
George Grigoriou Investor Relations Officer
Vasilis Molfetas IR department
Vasilis Tsaitas Investor Relations Officer

You may also be interested in…