Construction manages adjusted net income of E6m in 2Q; on track to E1bn sales this year. Attiki Odos traffic -4% in 1H14: now model -2%; cumulative -40% since 2010. With Moreas  traffic not picking up yet; we still expect related losses and the reason behind concession adjusted loss of E6m in the quarter; one off gain of E10m in 2Q…

1Q14 earnings at E2m and on track to managing E18m this year. FCF was negative as expected on positive working capital in construction. Construction EBIT margin at 2% albeit should up in the remainder of the year. PBT in concessions down by E5m yoy …

The US did not add to profits, Egypt took away some with good chances to take out more. And the reason behind our 7% EBITDA cuts on average over 2014-16. On the other hand outlook is still good enough to warrant and OWN IT rating. This year incremental EBITDA at E34m with ….

Earnings at an inflexion point on decent FCF but not good enough for a positive thesis, despite record high FCF in the previous years due to past profits from construction. In 2016 we see net income at E37m and FCF at E61m – we think is decent but not fireworks. Attiki Odos traffic to grow earnings albeit not to the extent the market expects. If construction EBIT margin beats us by 100bps our 2015 EPS ups by 40%. IPO of wind parks is a positive development to crystalise value. For now at our target price there is not enough upside to warrant an OWN IT rating…contact@researchgreece.com