What’s new? OTE published Q4/FY results with Q4 revenues/adj EBITDA(L)/adj net income at +5.1%/+2.8%/+20.2% yoy. Much better sequential growth rates, thanks to Greece (+1.6% yoy EBITDAL) and Romania (E4m from E0m). But also lower financials (-E16m) and depreciation (-E3m). FY 2023 cash flow of E500m came in line with guidance (E104m in Q4).
The negative surprise was the lower cash flow guided for 2024, at E470m, attributed to higher cash taxes; and which OTE sweetened with a higher payout ratio (96% from 84%), distributing E450m (from E425m), via a higher cash mix (66% from 59%), resulting to higher DPS (E0.71 from E0.58) but a lower buy-back (E153m from E175m).

Piraeus just announced FY 2023 results and detailed 2024-2026 business plan targets. Given the HFSF’s stated plan to exit its 27% stake in the bank, we analyze 2024-2026 guidance, to help readers decide what to do with the stock.

Quoting from p.61 of the IPO prospectus: ‘AIA expects that it should be able to grow its earnings over the long term at a rate consistent with passenger traffic, which […] is forecast to grow at an app 2% CAGR for domestic traffic and app 3% CAGR for international traffic for the period 2022 to 2046.’
We initiate coverage on AIA with a DO NOT OWN (DOI) rating and a price target of E8.1. Reasons: a) the low -capped- earnings growth outlook; b) the uncompelling 3.6% dividend yield left over from 2023 (paid in 2024); c) DCF/DDM valuation; and d) the warranted discount to peers given the shorter remaining concession life.

PPC provided aggressive/ambitious 2024-2026 financial targets, with 2026 EBITDA at E2.3bn (from E1.5bn pro forma in 2023), implying +15% p.a. But not that different to the previous strategy update (2021). The main difference being Enel Romania, adding E500m p.a. or 22% of group EBITDA. Greece implied EBITDA of 1.8bn in 2026 is a bit higher than previous guidance for E1.74bn. In 2030 PPC expects EBITDA will rise to E3.0bn.

The company itself is new, being in transformation mode since 2021 and having gone through ownership and shareholding control fights, shedding assets and slashing costs. With this note we are trying to answer the following questions: a) what is the business strategy? and b) how much is the company/equity worth?