Euroxx - Public Power Company FY'12 Results
- 1. Euroxx Research - Utilities Flash Note, FY12 Results April 02, 2013 Public Power Corporation FY12 results Tolis Paschalis PPC released a resilient set of FY12 results last Thursday after the market opening. On a Energy / Refining paschalis@euroxx.gr reported basis, despite bottom-line settling below estimates, top-line and EBIDTA figures +30 210 68 79 492 landed in-line with market estimates mainly due to gains from the one-off settlement of outstanding financial issues between PPC and DEPA which reached 191.7m, Manos Giakoumis counterbalancing increased energy production costs, higher taxes and reduced electricity Research Director demand. giakoumis@euroxx.gr +30 210 68 79 322 On a recurring basis, despite the increase in top-line (due to market share recovery in the retail market after the suspension of operations of alternative energy suppliers) and the reduction of payroll costs by 14.3% y-o-y (or 178.8m), increased expenditures for liquid fuel, natural gas and energy purchases by 33.1% y-o-y (or 771.4m) weighed heavily in groups operating profitability. Finally, higher net financial expenses by 28.3% y-o-y (or 51.8m) and provisions by 50.7% y-o-y (or 113.5m) burdened, also, groups bottom-line results. In particular, FY12 revenues increased by 8.6% y-o-y to c6bn (in-line with consensus), while EBITDA came in up by 27.1% y-o-y to 991m (2.5% below consensus) with related margin up to 16.6% from 14.1% in the prior period. The increase in the top line was mainly a result of market share recovery especially in the retail market after the suspension of operation of two alternative suppliers (namely, Energa and Hellas Power) as of January 25, 2012 and the Low and Medium Voltage tariffs increases in 2012. Specifically energy sales revenues reached were up by 17.2% (or 5.7bn). Finally, at the bottom line PPC reported net profits of 30.5m vs losses of 149m in FY11. Group CapEX decreased not only as an absolute number by 287m, to 820.6m in FY12 (from 1,107.6m in FY11) but also as a percentage of total revenues to 13.7% vs 20.1% in FY11. Finally, Net Debt remained practically at the same with YE11 levels and settled at 4.7bn. In addition, the group refinanced 1.1bn of debt and paid back 383m, while Euler Hermes approved the insurance cover of a 700m loan for the Ptolemaida V project. The EGM th approved, on March 29 , the Ptolemaida V construction contract signing with Terna (the construction arm of GEKTERNA group)-Hitachi JV for the construction of the 550-660MW lignite plant. Recall, that the project is budgeted at c1.40bn, has a construction tenor of 70 months (c6 years) and will enable the decommissioning of older lignite fired-units. Finally, the BoD will propose to the AGM (to be held on June 13) a cash DPS of 0.025 (no dividend was paid in FY11), implying a dividend yield of 0.45% on Thursdays closing price, with the ex-div date set on July 5. Conference Call details PPC will host a conference call today, at 18:30 Athens time, to comment on results and outlook. Conference call details: Greece: +30 211 180 2000, UK: +44 (0) 800 376 9250, US: + 1 866 288 9315. Please refer to important disclosures in the Disclosure Appendix.
- 2. April 02, 2013 Greece / Utilities Q4'12 Results P&L (m) Q4'11 Q4'12 y-o-y Cons vs Cons FY'11 FY'12 y-o-y Cons vs Cons Sales 1,314 1,422 8.2% 1,450 -2.0% 5,514 5,985 8.6% 6,014 -0.5% Energy sales 1,119 1,370 22.5% 4,879 5,717 17.2% HTSO sales 101 0 311 1 -99.8% Other sales 94 52 -45.0% 324 267 -17.5% Total OPEX 1,329 1,244 -6.3% 4,734 4,994 5.5% % of sales 101.1% 87.5% 85.9% 83.4% EBITDA -15 177 203 -12.5% 780 991 27.1% 1,016 -2.5% % margin -1.1% 12.5% 14.0% 14.1% 16.6% 16.9% Recurring EBITDA -15 -15 -2.0% 780 799 2.5% % margin -1.1% -1.0% 14.1% 13.4% D&A 152 179 18.0% 657 660 0.4% EBIT -167 -2 123 331 170.2% % margin -12.7% -0.1% 2.2% 5.5% Recurring EBIT -167 -194 123 139 13.7% % margin -12.7% -13.6% 2.2% 2.3% Financials (net) 52 59 13.1% 183 236 29.1% Pre-tax profit -224 -60 -86 95 % margin -17.1% -4.2% -1.6% 1.6% Recurring PBT -224 -252 -86 -96 % margin -17.1% -17.7% -1.6% -1.6% Income Tax 15.5 27.7 78.7% 63.1 64.9 2.9% effective tax rate -6.9% -46.2% -73.5% 68.0% Net profit -240 -88 -32 -149 31 86 -64.7% % margin -18.2% -6.2% -2.2% -2.7% 0.5% 1.4% Recurring Net profit -240 -241 -149 -123 % margin -18.2% -17.0% -2.7% -2.1% EPS () -1.03 -0.38 -0.64 0.13 Source: PPC, Euroxx Research Euroxx Research / PPC FY12 results
- 3. April 02, 2013 Greece / Utilities IMPORTANT DISCLOSURES Analyst Certification The analyst identified on the front page of this report and the Head of Research (Certified Analyst) certify that the written views about each company and security they cover reflects only their personal opinions and estimates and their compensation are not linked to any investment banking services provided by Euroxx. Risks and sensitivity The views and recommendations for all the companies that Euroxx Securities covers or refers to in the daily report have various levels of risk depending on company, industry and market events. Furthermore, our estimates for each company we cover are affected by various factors such as interest rates, inflation, local economic environment, market volatility, currency, management continuity or other company specific events. Investors should be informed that the investment strategies discussed or recommended in these reports may not be realised and each company may fail to reach its targets or the analysts targets. Recommendation System Our recommendation system is based on the unbiased personal views of our analysts. The target prices have a time horizon of one year. Euroxx Securities S.A. aims in updating the covered companies on any new future material that may lead to a different recommendation but does not have a regular policy to update reports Coverage Universe (#) in Coverage % Com panies covered that are Rating Explanation the last quarter Universe (%) investm ent banking clients Overw eight Expected total return >10% 5 17% 0% Equalw eight Expected total return betw een -10% and +10% 6 20% 3% Underw eight Expected total return < -10% 0 0% 0% Under Review Recommendation and Target Price are subject to revision 19 63% 0% *The target price and rating have a time horizon of one year Investment recommendations are determined by the ranges described above at the time of initiation or review of coverage. Furthermore, the aforementioned ratings and target prices are subject to constant changes. Any unauthorised use, disclosure, copying, distribution, or taking of any action in reliance on these reports is strictly prohibited. Euroxx Securities S.A. and its employees are neither liable for the proper and complete transmission of these reports nor for any delay in their receipt. Euroxx Securities S.A. and its employees do not guarantee the accuracy of the research reports or daily report, while they are not responsible for any possible errors or omissions. Under no circumstances Euroxx suggests any buying or selling activity through this document. In producing its research reports, Euroxx Securities SA research departments may have received assistance from the subject company such as access to the companys sites, visits to certain operations of the subject company, meetings with management or employees and the handing by them of historical data regarding the subject company, as well as of all the publicly available information regarding strategy and financial targets. Other Important Regulatory Disclosures The information and opinions in this report were prepared by Euroxx Securities S.A., which is member of the Athens Exchange S.A. and regulated by the Hellenic Capital Market Commission. There is a separate location of analysts from Investment Banking, Capital Markets and Sales and Trading employees and research reports are produced away from them. The communication between the Research Department and the other departments of Euroxx Securities S.A. is restricted between the different departments. Note that "EUROXX Securities S.A. is regulated in Greece by the Hellenic Capital Market Commission, License No. 45/23.06.95/3. Valuation Method n/a Disclosure checklist for companies mentioned in this report 1. As of the aforementioned date, Euroxx Securities S.A. does not own 5% or more of any common equity securities. 2. As of the aforementioned date, no listed companies own 5% or more of a class of common equity securities of Euroxx Securities S.A. 3. Euroxx Securities S.A. does not act as a market maker for any listed company. 4. Euroxx Securities S.A. has made underwriting for the prior 12 months of the aforementioned date for the stock GPSB. 5. Within the last 12 months, Euroxx Securities S.A. did not have a contractual relationship or has not received compensation for financial advisory services from any listed company, except Postal Savings Bank 6. Euroxx Securities S.A. has not sent the research report to the company prior to publication for factual verification. 7. Following 6, Euroxx Securities S.A. has not changed the contents of the initially sent research report. 8. Euroxx Securities S.A. has not received compensation from the company for the preparation of this research report. Euroxx Research / PPC FY12 results
- 4. April 02, 2013 Greece / Utilities Rating History Date Rating Share Price Target Price 18/10/2007 Equalweight 27.64 27.00 02/01/2008 Equalweight 30.10 28.80 04/04/2008 Equalweight 27.30 30.00 29/05/2008 Equalweight 24.36 27.40 01/09/2008 Equalweight 16.92 18.80 29/09/2008 Equalweight 12.96 12.00 02/12/2008 Equalweight 11.48 15.46 19/03/2009 Equalweight 12.24 U/R 01/04/2009 Equalweight 13.60 16.10 20/06/2009 Overweight 14.57 18.00 26/08/2009 Under Review 16.14 U/R 08/03/2010 Equalweight 12.35 13.80 29/06/2010 Under Review 12.40 U/R Research Manos Giakoumis +30-210-6879322 giakoumis@euroxx.gr Maria Kanellopoulou +30-210-6879363 kanellopoulou@euroxx.gr Yiannis Sinapis +30-210-6879353 sinapis@euroxx.gr Tolis Paschalis +30-210-6879492 paschalis@euroxx.gr Fotis Zeritis +30-210-6879486 zeritis@euroxx.gr Sales George Polites +30-210-6879520 gpolites@euroxx.gr Ilias Dimitros +30-210-6879485 dimitros@euroxx.gr Danai Filioti +30-210-6879482 filioti@euroxx.gr George Lymberopoulos +30-210-6879494 lymberopoulos@euroxx.gr Christina Papakastrisiou +30-210-6879480 papakastrisiou@euroxx.gr Euroxx Securities S.A 7 Paleologou Str. 15232, Athens www.euroxx.gr Euroxx Research / PPC FY12 results