This is our BoP Greek equities briefing. We have not made many changes compared to our semi-annual one in July: we downgraded Alpha and Helex; and upgraded Eurobank. Plus, we re-visited GEK, reiterating OI and replacing its soon-to-be-delisted RES subsidiary, Terna Energy.

EYDAP reported disappointing Η1 2024 results which, once again, showcased the need for higher tariffs. Even though water consumption increased by +7.6% yoy and overall sales grew by +7.2%, clean EBIT (adjusted for litigation provisions) stood at E1.6m compared to E2.0m last year. EYDAP will be submitting its proposals to the regulator soon. We are bracing ourselves for…

EYDAP reported FY 2023 results, above our estimates, for several reasons, some of which accounting in nature. The water utility remains a case study whereas a RAB model and higher tariffs remain the only catalyst for earnings (and dividends) to go sustainably higher. And for us to be able to put a target price on the equity.
Conclusion: In the meantime, we reiterate our DO NOT OWN IT (DOI) rating. Introducing a RAB model is as interesting as it is imperative. The lack of visibility remains on all fronts, namely tariffs, investment plan, capital structure and dividend policy.

H1 results did not bring anything new to the investment case. Water consumption moved further down, the non-invoiced part went up and EYDAP is still struggling to generate enough revenues to cover its (mainly) fixed cost base. EBIT was slightly negative (E0.3m). Not a reason to celebrate but adjusting for provisions, EBIT turns positive to E2.0m (from E1.1m in H1 2022). At least costs seem to have stabilized.

What’s new? FY 2022 results came in even worse than what we expected, on lower water consumption and rising electricity costs, pushing EBITDA down by -55% yoy and -40% vs our estimate. Taking out E25m of non-cash income for maintenance (to be booked until 2025), underlying EBITDA collapses to E14m (from E60m adjusted in 2022 and E105m in 2019) while EBIT turns negative by E25m. There is no better summary/description of 2022 results than the DPS announcement for E0.02 compared to E0.28 in 2021.