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.

We have updated our valuation as GEK completed the sale of its renewable subsidiary, Terna Energy, pocketing E866m (37% stake); which will finance new -lucrative- concession projects undertaken since our previous assessment two years ago…

H1 results were weak on a lower load factor (-440bps yoy) and flat operating capacity; sales/EBITDA/net went down by -7%/-10%/-25% yoy. The good news is the load factor is up in Q3. And the Kafireas 330MW mega-wind project is completed. We see delays in other RES projects, which is quite common for TEN and the sector. Speculation over M&A has abated causing the share price to lose its (E5-E6/sh) M&A premium. Management insists the interest is alive.

’If you cannot explain it simply, then you do not understand it well enough.’’ Testing ourselves, we share our understanding of each Greek investment case we cover within a few lines.
Conclusions: Our base case scenario is materializing, i.e., Mitsotakis administration renewing its mandate and Greece avoiding a recession. Equities have re-rated and are +36% YTD, so now…

What’s new? The most notable points from FY results are a) +10MW additional capacity vs Q3 (wind); b) +130bps load factor yoy; and c) 2023-2029 guidance reiterated. Revenues/EBITDA/net income came in at E298m/E165m/E68m or +9%/+3%/+3% yoy (adjusted for E49m non cash stock option expenses and discontinued trading operations) and +5%/-7% compared to our estimates.
TEN reiterated May 2022 Investor Day targets for 3.3GW installed in 2025 (from 905MW now) and >6.4GW in 2029 with EBITDA >E700m (from E160m-E170m in 2022). These remain ambitious along with the implied capex at E2.4bn by 2025. In 2022 capex stood at E238m from E400m guided/estimated as per the business plan.