Q3 was impressive, with the 9M adjusted EBITDA (E1.1bn) at 90% of our FY 2023 estimate. Refining margin of $22/bbl x 3.9m tn x 1.09 EUR/USD pushed clean EBITDA at E538m in Q3, higher than E155m in Q2 (lower margin, lower vol), but even higher than E447m in Q1. Jet, gasoline, and diesel cracks rebounded back to Q1 levels with the naphtha reformer leading to higher gasoline production. Equity cash flow at E488m/E745m in Q3/9M pushed net debt significantly lower at E1.2bn (from E1.8bn in Q4 2022).

If you are attending (or not) the Greek Investment Conference in London on Nov 27-28, organized by ATHEX and Morgan Stanley, perhaps you will find this brief update useful. It is a short description of each investment case included in our universe.
Keep in mind: Greek equities are not expensive. Our universe (x-banks) is on 8.7x EPS, 5.4x EBITDA and 5.4% dividend yield (2024E). With RoE at 16% and cash flow conversion at c.60%. The govt says the economy will grow by 2.9%, primary surplus will reach 2.1% and debt/GDP 152%.

PPA’s Q3/9M strong set of results forced us to look at the name more closely. Q3 sales went up +18% yoy; EBITDA +25% and net income +28%; the latter reached E66m in the first nine months of 2023, up by +40% yoy. The drivers: Domestic cargo TEU mix in Pier 1, concession income from Piers 2&3; plus, imported cars and cruise ships passing through the port. At this run rate, FY 2023 EBITDA and net income will reach E120m and E78m, with shares trading 5.5x EPS (x-cash) and 3.5x EBITDA 2023E; if payout does not change vs 2022 (50%), the implied dividend yield is 7.0%.

OTE published Q3 results with revenues/adj EBITDA(L)/adj net income at -2.6%/-1.5%/-6.4% yoy. Growth and business trends are the same with Q2, so we have little to add for this quarter. The big news is lower capex for 2023 (from E640m to E620m) with FCFE unchanged at E500m. This implies a lower L4L cash flow number. Which combined with the competitive landscape affecting revenues, is weighing negatively on the investment case.

Q4 Sector Map confirms NBG as our top pick. Highest NII, NIM, PPPM; RoTE; CET1; S3 covg combined with lowest NPE%, CoR; ECB funding. Additionally, it recorded the biggest increase in S1 loans qoq / decrease in S2+3 loans. The bank benefits from a low time-deposit mix at 18% (vs 24%-34% peers), therefore enjoying a lower deposit beta (10% vs 12%-15% in Q3); We estimate NBG’s RoTE excludes c. E17m (or 100bps RoTE annualized) in opex (one-offs) which does not change the comparison.