There was nothing particularly noteworthy in Q2 numbers. The same trends from Q1 continued, but with a significantly weaker Romania. As a result, adjusted EBITDAL did not grow yoy, despite a 1.5% increase in Greece. Lower depreciation and financial costs helped adjusted net income to grow by +5.6% yoy. The new CEO made a positive impression when describing the initiatives around FTTH and pay TV. Cash flow guidance for the year was maintained at E470m.

Q2/H1 clean EBITDA of E0.47bn/ E0.92bn in line with management’s guidance for E1.8bn for the full year. We have the distribution business to thank for that, as it accounted for c. 45% of the total number, and 60% of the delta vs H1 2023. Management sounded upbeat while announcing a new 629MW (600MW wind) acquisition in Romania, which comes on top of the business plan communicated earlier in the year.

With this note we are updating our estimates, target prices and ratings for Greek banks, following Q2 results. We are also sharing our Sector Map, in which we have compiled the main Q2 numbers. We outline the main points below.
In short, Q2 was a good set of results for the sector, supported by the higher-than-expected base rates, favorable deposit economics (mix, beta), low CoR and volume growth (finally). The slightly lower NII (-1.5% qoq) was offset by higher fees (+12% qoq) and lower CoR (-12bps at 59bps; impairments -16% qoq) => sending clean net income +3.5% qoq at E1.17bn and RoTE at 16% (flat qoq, post AT1). Net loans went up by +2.5bn or +1.7% qoq.

Jumbo released the trading update for June, showing sales +9% yoy, shaping the H1 rate at +8% yoy. This run rate is in line with full year guidance for 8%-10% growth in sales and earnings. But the real news came from management’s update on transportation and Red Sea supply chain issues, saying the disruption has not changed, freight rates have gone up and delivery times have doubled.

In this Food 4 Thought note we look at OPAP’s 15YRS lottery license renewal in Cyprus, announced on June 26: a) is the new deal better or worse than the previous one? and b) is there any readthrough for the renewal of the Greek license (offline) expiring in 2030?
Better or worse? It is positive OPAP renewed (compared to losing the license) but the new terms are worse than before: the GGR tax rate rose to 22.5% (from an effective 17%) and the annual license fee stands at E4.2m (from zero), with the one for 2024 already paid. We estimate EBITDA and net income will be going down by 60%-70%, albeit by a milder 20% if the intercompany fee stays the same.