Currency in EUR
Last close As at 26/05/2023
EUR7.62
▲ 0.04 (0.53%)
Market capitalisation
EUR2,329m
Research: Oil & Gas
HELLENiQ Energy reported Q322 adjusted EBITDA of €504m, c four times higher than Q321 (€125m) and c 25% ahead of consensus (c €404m; seven analysts). This was mostly driven by a strong performance in Refining, Supply & Trading, due to strong benchmark refining margins and exports (46% of total refining sales). In addition, HELLENiQ reported improved profitability of international subsidiaries, as well as a significantly greater contribution from RES (Renewable Energy Sources). Furthermore, improved refineries’ performance and crude oil supply opportunities, as well as the operational improvement initiatives, such as the digital transformation programme, the group reorganisation, premium products in retail and network development, also had a significant contribution. Adjusted net income was €381m, more than 11 times Q321 (€33m), and c 50% ahead of consensus. It announced an interim dividend of €0.25/share, which combined with a special dividend (from the sale of DEPA) of €0.40/share equates to a dividend yield of 9.5%, before taking account of any final dividend for FY22. Our forecasts and valuation are under review.
HELLENiQ Energy |
Another strong set of results |
Q322 results |
Oil and gas |
11 November 2022 |
Share price performance Business description
Analyst
HELLENiQ Energy is a research client of Edison Investment Research Limited. |
HELLENiQ Energy reported Q322 adjusted EBITDA of €504m, c four times higher than Q321 (€125m) and c 25% ahead of consensus (c €404m; seven analysts). This was mostly driven by a strong performance in Refining, Supply & Trading, due to strong benchmark refining margins and exports (46% of total refining sales). In addition, HELLENiQ reported improved profitability of international subsidiaries, as well as a significantly greater contribution from RES (Renewable Energy Sources). Furthermore, improved refineries’ performance and crude oil supply opportunities, as well as the operational improvement initiatives, such as the digital transformation programme, the group reorganisation, premium products in retail and network development, also had a significant contribution. Adjusted net income was €381m, more than 11 times Q321 (€33m), and c 50% ahead of consensus. It announced an interim dividend of €0.25/share, which combined with a special dividend (from the sale of DEPA) of €0.40/share equates to a dividend yield of 9.5%, before taking account of any final dividend for FY22. Our forecasts and valuation are under review.
Year end |
Revenue |
Adjusted EBITDA* (€m) |
Net debt** |
P/E |
Dividend yield |
12/20 |
5,782 |
333 |
1,673 |
N/A |
1.4 |
12/21 |
9,222 |
401 |
1,938 |
15.7 |
5.4 |
Note: *Adjusted numbers account for inventory movements and other one-off items. **Net debt excludes lease liabilities.
Reported EBITDA was €329m, due to inventory losses (€151m) during the quarter as a result of price decreases and following a material increase in inventories in H122, as well as accrual of a CO2 emission deficit (€82m), partially offset by an accounting profit on the DEPA Infrastructure disposal (€72m). Reported net income was €252m, more than five times Q321 (€49m). Net debt stood at €1.58bn at the end of Q322, down from €1.97bn at the end of Q222, due to increased operational cash flows and the DEPA sales proceeds. This includes cash of c €1.4bn, which, combined with credit facilities and ongoing cash flow generation, is enough to finance its investment programme. Net debt to EBITDA is just 1.2x, based on trailing 12 months EBITDA.
HELLENiQ is on track with its Vision 2025 renewable strategy, having completed the first phase in less than one year (including review of non-core activities, sale of DEPA Infrastructure and change in corporate identity). The RES expansion is progressing towards the targeted 1GW by the end of 2026 and over 2GW by 2030. Following the acquisition of 55MW of operating wind farms in August, the group’s installed RES capacity is now 340MW (wind and solar) currently in operation. The annualised EBITDA run rate for RES is now almost €50m (up from less than €3m in FY21).
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Research: Real Estate
Regional REIT’s (RGL) Q322 DPS declared of 1.65p is in line with its target of 6.6p for the year (+3%). Despite a deteriorating economic environment, Q322 operational progress included strong leasing activity, good tenant retention, an increase in occupancy and continuing strong rent collection. With all debt fixed/hedged for almost five years, interest costs are unaffected by rising interest rates, although higher bond yields are having a negative impact on asset values across the broad UK market.
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