Currency in EUR
Last close As at 26/01/2023
EUR22.86
▲ 0.10 (0.44%)
Market capitalisation
EUR3,252m
Research: Industrials
It was announced on Friday that Mytilineos is one of just two Greek companies that were added to the MSCI Greece index, which forms part of the MSCI Global Standard indices. This should bring significant additional demand for Mytilineos’s shares. In this note, we also highlight Mytilineos’s strong Q122 results, reported on 4 May. They were roughly in line with our expectations. Net profit after minorities was €67m, an increase of 83% versus Q121 (€37m) and higher than the strong performance in Q421 (€65m). The strong performance extends across Power & Gas, Metallurgy and Renewable Storage Development, which have all delivered results in line with (or slightly above) our expectations. Sustainable Engineering Solutions is below expectations; however, we note that a number of projects are close to completion stage, which should imply a stronger performance in the coming quarters. Mytilineos is on a strong growth trajectory and has been investing to benefit from the energy transition. We maintain our forecasts and valuation of €27.0 per share.
Mytilineos |
Added to MSCI Global Standard indices |
Q122 results |
Industrials |
16 May 2022 |
Share price performance Business description
Analyst
Mytilineos is a research client of Edison Investment Research Limited |
It was announced on Friday that Mytilineos is one of just two Greek companies that were added to the MSCI Greece index, which forms part of the MSCI Global Standard indices. This should bring significant additional demand for Mytilineos’s shares. In this note, we also highlight Mytilineos’s strong Q122 results, reported on 4 May. They were roughly in line with our expectations. Net profit after minorities was €67m, an increase of 83% versus Q121 (€37m) and higher than the strong performance in Q421 (€65m). The strong performance extends across Power & Gas, Metallurgy and Renewable Storage Development, which have all delivered results in line with (or slightly above) our expectations. Sustainable Engineering Solutions is below expectations; however, we note that a number of projects are close to completion stage, which should imply a stronger performance in the coming quarters. Mytilineos is on a strong growth trajectory and has been investing to benefit from the energy transition. We maintain our forecasts and valuation of €27.0 per share.
Year end |
EBITDA |
Net income |
EPS* |
DPS** |
P/E |
Yield |
12/20 |
315 |
130 |
0.91 |
0.38 |
15.9 |
2.6 |
12/21 |
359 |
180 |
1.32 |
0.46 |
10.9 |
3.2 |
12/22e |
518 |
271 |
1.97 |
0.70 |
8.0 |
4.2 |
12/23e |
642 |
359 |
2.59 |
0.91 |
6.1 |
5.6 |
12/24e |
670 |
373 |
2.69 |
0.94 |
5.9 |
5.8 |
Note: *Number of shares includes Mytilineos’s recent (on 20 April) sale of 4.5 million shares previously held on own account. **Final distributed dividend per share
Following record-high results in FY21, Mytilineos’s continued strong growth momentum in Q122 demonstrates the robustness of its business model despite the energy crisis in Europe, inflationary pressures, rising interest rates, the evolution of the pandemic and the recent geopolitical tensions. We are impressed by the strength of the Power & Gas division, which has more than doubled its EBITDA to €61m versus Q121 (€29m), and it is a testament to Mytilineos’s integrated model (including increasing exposure to retail), its ability to source gas at competitive prices and the high efficiency and flexibility of its power generation portfolio. We expect to see solid growth in the Sustainable Engineering Solutions division in the coming quarters, as projects come to fruition, and are encouraged by the c 30% increase in its firm order book to €1.1bn at end of Q122, up from €0.8bn at end of FY21. It has an additional mature pipeline of c €1.3bn and is well positioned to benefit from the mobilisation of the European Recovery Fund’s resources to focus on ‘green’ development projects. In addition, we expect continued strong performance in the Renewable Storage Development division as Mytilineos, which has a c3.5GW mature development pipeline, is well-placed to benefit from accelerated growth in renewables in the EU (and other markets globally).
Despite Mytilineos’s ongoing heavy investment programme in the energy transition, net debt to EBITDA remains just 2.2x. Mytilineos continues to have significant financial flexibility, with total liquidity of c €1.5bn, augmented by strong operating cash flow in all areas of the business. We maintain our existing forecasts and valuation of €27.0 per share, which is c 65% above the current share price.
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Research: Oil & Gas
Hellenic Petroleum reported Q1 adjusted EBITDA of €99m, a 54% increase year-on-year and c 20% ahead of consensus (€82m; based on four analysts). This was driven by strong benchmark refining margins and Greek market recovery (fuel demand was up 16% y-o-y). It was partially offset by higher energy and CO2 costs and an approximate two-month planned outage at the Elefsina refinery. As a result of the outage, net production was 2,798k metric tons (MT), down 16% y-o-y; however, this was partially offset by increased trading, with sales volumes down 3% at 3,292k MT. Reported EBITDA was €501m due to inventory gains of €267m and a temporary IFRS gain on increased CO2 prices, both of which should reverse in the coming quarters. Given the potentially large fluctuations in results quarter-on-quarter, we maintain our previous valuation of €7.48/share, which is derived from a blend of DCF, EV/EBITDA and P/E.
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