1. travel
2. tourist destinations
3. greece

Daily Note
AVG Research
19 November 2014
Athens General
Market Turnover (EURm)
Market Cap (EURbn)
Market Cap / GDP*
daily
Y-t-d
916.2
%
3.90%
%
-21.20%
88.99
147.5%
58.21
31.8%
*2014
Headlines
close
Athens General Index
Macroeconomic News
1,050
1,000
As troika ups pressure on Greece, the coalition government, through the Vice President Evangelos Venizelos, assured that
reforms will continue, while there will be no additional austerity measures. Evangelos Venizelos also suggested that the main
opposition party Syriza show responsibility in these negotiations, while daily Kathimerini notes that the PM Antonis Samaras and
Evangelos Venizelos are contemplating a meeting with Syriza head, Alexis Tsipras – According to press, the international lenders’
reduced the estimated fiscal gap for the target for 2015 from EUR3.6bn to approximately half - According to press, the
government proceeds to submit the final draft of the 2015 budget by Friday.
950
900
850
800
17 Oct
24 Oct
Corporate News
31 Oct
07 Nov
14 Nov
ASE Indices & Sectors
Motor Oil will announce 3Q:14 results today after the closing of the market. The company will host a conference call tomorrow at
17:30 local time (15:30 UK time).
Additional Headlines
Hygeia group released its 9M:14 results with reported revenues standing at EUR163.8m (vs. EUR169.8m in 9M:13), while
adjusting for rebate and claw-back mechanisms revenues stood at EUR174.5m (+2.8% y-o-y). Reported EBITDA stood at EUR10m
(vs. EUR14.7m in 9M:13), while adj. EBITDA stands at EUR20.7m (+40.6% y-o-y). Finally, the group reported net losses of
EUR11.3m (vs. losses of EUR11.1m in 9M:13), or losses of EUR2.1m on an adjusted basis.
Aegean Airlines announced that it is adding 16 new destinations in 10 new countries to its network next summer, reaching a total
of 134 destinations, 34 domestic and 100 abroad in 42 countries. The airline’s network will add Helsinki in Finland, Toulouse,
Deauville and Metz in France, Naples and Pisa in Italy, Malta, Kuwait, Amsterdam in the Netherlands, Paphos in Cyprus, Riyadh in
Saudi Arabia, Tallinn in Estonia, Oslo in Norway, Tehran in Iran, Dubrovnik in Croatia and Yerevan in Armenia. Aegean will also
increase its flights from major markets for Greek tourism such as Britain, Germany, Switzerland, France and Italy, and to popular
island destinations. The 2015 schedule will offer 15mn seats, up 2mn from 2014, as its summer schedule has evolved into a
stronger one than initially planned, with more new destinations, given that the growth prospects of the company appear
particularly positive.
Following the submission of the relevant legislation, EYDAP (Athens Water and Sewage Company) will now be able to acquire or
obtain management of municipal entities operating water and sewage applications beyond Athens. EYDAP will be able to sign
management agreements with municipal entities across Greece, while the required investments will be undertaken by the local
municipalities since EYDAP will only hold the operational management. In the case that EYDAP acquires the operations of a
municipal entity according to the legislation it will not be obliged to proceed with investments unless it receives a fair return on
them. This was expected by the company and will be one of the key operational drivers in the coming years.
HELEX will hold its EGM today to approve the following: (i) an increase of the share capital by capitalizing the untaxed reserves
amounting to EUR 55.7m; (ii) a reduction of the share capital of the company in order to offset losses by writing off losses from
the “Retained earnings” account via a reduction in the share par value; and (iii) electing new BoD members. Importantly, note
that the above measures are technical in nature and aim to increase the equity efficiency of the company to the benefit of
shareholders through future distribution of dividends and share capital from 2015 onwards.
Moody's has upgraded to B3 from Caa1 the ratings of the covered bonds issued under Bank of Cyprus' Covered Bond Programme
(Cypriot Pool). The rating action was prompted by the upgrade of the deposit rating of the issuer Bank of Cyprus.
Reportedly (Kathimerini), citing Israeli firms, the reserve estimate for the Aphrodite natural gas field off the coast of Cyprus has
been raised by 12%, and most of the gas is likely to be exported. The new estimate given for the natural gas field is 4.54 trillion
cubic feet (tcf). The estimate for condensate, a liquid byproduct of natural gas, was also raised to 9 million barrels from a previous
estimate of 8.1 million, two Israeli firms said in a statement to the Tel Aviv Stock Exchange on Tuesday. Delek Drilling and Avner
Oil Exploration, both subsidiaries of Israel’s Delek Group, each own 15% of Aphrodite, while Texas-based Noble Energy controls
the rest.
According to Imerisia, the Greek government will submit to parliament in the coming days a Ministry of Infrastructure bill that
provides the ‘green’ light for the completion of the privatization of Trainose and maintenance company Rosco. Under the
legislation, the new owner of Trainose will receive a EUR50m subsidy per annum in order to maintain lower revenue generating
routes, while in other related legislative provisions, Trainose will have the ability to assign the maintenance of railway equipment
for 10 years.
Carlsberg’s local brewer (Mythos) will merge with Greek beer-maker Olympic Brewery and Carlsberg will hold a 51-percent share
in the new company. According to Carlsberg officials, the two breweries combined would hold a market share of about 29% in
Greece. Carlsberg already fully owns the Mythos Brewery, Greece's third-largest. Carlsberg CEO Joergen Buhl Rasmussen said that
the merger would make it "a strong number two player" in Greece, after the Heineken-owned Athenian Brewery. No financial
information was provided on the deal, which is subject to Greek regulatory approvals.
Please continue overleaf….
Weekly Calendar
FTSE - 20
FTSE - 40
FTSE - 140
ASE - Banks
ASE - Telecoms
ASE - Industrial
ASE - Construction
close
daily %
Y-t-d %
296.2
848.7
711.1
116.5
2463.6
2153.9
2251.2
4.1%
2.0%
4.0%
5.0%
5.7%
3.1%
2.4%
-23.0%
-27.3%
-23.0%
-35.2%
-7.4%
-33.6%
-16.1%
FTSE ASE 20 Ratios*
2013f
2014f
21.7
1.2
7.7
1.1
1.2%
21.5
1.1
6.4
1.0
1.8%
P/E (x)
P/BV (x)
EV/EBITDA (x)
EV/Sales (x)
Dividend yield (%)
12-14f
CAGR
-0.57%
-5.88%
-16.38%
-8.45%
45.37%
*consensus FactSet
FTSE ASE movers (last trading day)
TOP
Public Power Corporation
EurobankS.A.
Ergasias SA
Ellaktor SA
9.1%
7.6%
6.9%
BOTTOM
SARANTIS S.A.
Forthnet S.A.
Titan Cement Co. SA
-0.3%
0.0%
0.5%
Foreign Indices / Rates / FX
DJ Industrial Average
Nasdaq Composite
S&P 500
Euro STOXX
FTSE 100
CAC40
DAX
Austria ATX
Russia RTS
Turkey ISE 100
10 - Year Yield (DE)
USD / EUR
close
daily %
Y-t-d %
17687.
8
4702.4
0.2%
0.7%
0.5%
1.1%
0.6%
0.9%
1.6%
1.4%
1.7%
1.0%
6.7%
12.6%
11.0%
0.3%
-0.6%
-0.8%
-1.0%
-12.5%
-29.2%
20.0%
1.2%
0.6%
33.1%
-9.1%
2051.8
315.4
6709.1
4262.4
9456.5
2228.5
1020.8
81329.
9
3.0%
1.25
Macros: 19/11/2014 - Turnover Index in Industry (Sep-14)
Credit rating on Greece: 21/11/2014 Fitch Ratings
Earnings announcements: 19/11/2014 - Geniki Bank, 20/11/2014 - Lamda Development
Corporate: 19/11/2014 - Hellenic Exchanges (AGM), 20/11/2014 - Bank of Cyprus (AGM)
Axia Ventures Group - 4 Vas. Sofias Ave., 10674 Athens Greece, Tel: +30 210 7414400, Fax: +30 210 7414449, Web: www.axiavg.com
Please refer to the last page for disclosures and analyst certification
Daily Note
Greek Economy – Troika Negotiations
Fact: As troika ups pressure on Greece, the coalition government, through the Vice President Evangelos Venizelos, assured that reforms will
continue, while there will be no additional austerity measures. Evangelos Venizelos also suggested that the main opposition party Syriza show
responsibility in these negotiations, while daily Kathimerini notes that the PM Antonis Samaras and Evangelos Venizelos are contemplating a
meeting with Syriza head, Alexis Tsipras – According to press, in a teleconference between troika and Greek government officials, the
international lenders’ reduced the estimated fiscal gap for the target for 2015 from EUR3.6bn to approximately half - According to press, the
government proceeds to submit the final draft of the 2015 budget by Friday.
Assessment: n comments made by EU Commission spokeswoman Mina Andreeva, discussions on a follow-up program can begin ‘only once a
staff-level agreement for the completion of the review has been reached,’ while the troika will return to Athens to complete the review ‘as soon
as the conditions are there.’
The timing of troika’s return is up to Greek government’s determination to negotiate the key issues. Apart from this, according to Kathimerini
the strategy of the government has been modified insisting also to have a ‘clear view’ about the day after of the Greek program (including the
precautionary credit line and the role of the IMF in the new support framework) before any agreement with the troika is reached.
In this effort the government (according to Kathimerini) could try to approach the leader of the main opposition party, Alexis Tsipras (invite a
meeting of the party leaders of New Democracy, Pasok, and Syriza) to present to him a packaged solution that will also include Greece’s
commitment to specific reforms that could not be implemented during the current review (to be included as conditions to the precautionary
credit line).
To this end Evangelos Venizelos talking to reporters suggested that Syriza has to show more flexibility as he acknowledged that negotiations
have been hampered because Greece’s partners were skeptical of the political and social climate in the country, as the domestic situation, is
‘sterile and unproductive.’
In respect of the fiscal part of the negotiations, Evangelos Venizelos made it clear that there will be no new austerity measures and that the
government will not proceed to changes of the draft budget it has already presented. He went further suggesting that troika’s forecasts of the
budget performance have proven wrong over the past 3 years, while the actual results support the government’s estimates.
To this end, reports note that during a teleconference between troika and Greek government officials yesterday, troika officials accepted some
of the government’s positions reducing their estimated gap for the 2015 primary surplus target gap from EUR3.6bn to about half of this amount.
The negotiations are expected to continue but the Greek government will reportedly submit to the Parliament on Friday the final draft of the
2015 budget that foresees a primary surplus of 3% of the GDP (in line with the targets of the Greek program).
Finally, in respect of reforms, Kathimerini reports that in a meeting yesterday Samaras and Venizelos agreed that they will not negotiate at this
stage changes in the Social Security, in the VAT and in collective dismissals but other labor reforms as well as the new salary framework in the
Public administration will proceed. All of the above reforms are part of the 19 points that troika wants the Greek government to act upon in
order for the review to proceed.
Name: Constantinos Zouzoulas
Closing Price (EUR)
Market Cap (EUR m)
e-mail: constantinos.zouzoulas@axiavg.com
6.30
697.9
MOTOR OIL S.A.
Phone number: +30 210 7414460
Oil / Greece
Reuters / Bloomberg: MORr.AT / MOH GA
Fact: Motor Oil will announce 3Q:14 results today after the closing of the market. The company will host a
conference call tomorrow at 17:30 local time (15:30 UK time).
12.0
10.0
8.0
6.0
4.0
2.0
0.0
Nov 13 Dec 13 Feb 14 Mar 14 May 14 Jun 14
Jul 14
Sep 14 Oct 14
MOTOR OIL (HELLAS) CORINTH REFINERIES S.A.
ATHEX Composite (Rebased)
Cons. Est.*
EV/EBITDA
P/E
P/B
EPS (EUR)
*FactSet
2013
2014f
2015f
9.4
6.8
9.9
1.23
0.64
5.1
6.7
1.09
0.94
1.16
-0.04
Assessment: The refiner is expected to post a satisfactory set of results given the industry environment during
the third quarter of the current fiscal period.
Refining division performance will be driven by the persisting recovery of cracking margins for Med refineries.
Significantly improved crude sourcing availability in Med region and lower prices should allow for lower
sourcing costs. At the same time demand is expected to remain solid for Med refineries, given the capacity
curtailments over the past periods.
Regarding the marketing division, fuel demand in Greece is starting to show early signs of recovery with
significant support coming from the tourism contribution.
We note that due to the strengthening of the USD we expect some FX losses and also some significant losses
from inventory revaluation given the prevailing oil prices.
All in all the market expects “clean” EBITDA of EUR116.8m, up by 42% y-o-y for 3Q:14 and “clean” net income
of EUR51.5m (+73% y-o-y)
EUR m
EBITDA
"clean" EBITDA
Net Income
"Clean" Net Income
9M:13
146.8
181.9
0.3
41.4
9M:14e
128.3
185.2
-2.1
40.5
y-o-y
-13%
2%
n.m.
-2%
3Q:13
85.4
82.4
32
29.8
3Q:14e
66.8
116.8
14.5
51.5
y-o-y
-22%
42%
-55%
73%
Source: Factset, Reuters, AVG Research
Name: Constantinos Zouzoulas
AVG Research
e-mail: constantinos.zouzoulas@axiavg.com
Phone number: +30 210 7414460
Page 2
Daily Note
Corporate and Macro Calendar
Company
Companies Earnings Announcements
Period
Date
Macros - November 2014
For the month of
Release date
Geniki Bank
Q3:14
19/11/2014
Turnover Index in Industry
Sep-14
19/11/2014
Motor Oil
Q3:14
19/11/2014
Commercial Transactions (prov data)
Sep-14
25/11/2014
Lamda Development
Q3:14
20/11/2014
Producer Price Index in Industry
Oct-14
28/11/2014
Jumbo
Q1:14
24/112014
OPAP
Q3:14
25/11/2014
Fourlis
Q3:14
25/11/2014
Aegean Airlines
Q3:14
25/11/2014
Rating Agency
Release date
Piraeus Bank
Q3:14
25/11/2014
FitchRatings
21/11/2014
Metka
Q3:14
26/11/2014
Moody's
28/11/2014
Mytilineos
Q3:14
26/11/2014
Folli Follie Group
Q3:14
27/11/2014
Company
Fact
Bank of Cyprus
Q3:14
27/11/2014
Hellenic Exchanges
AGM
19/11/2014
Athens Water
Q3:14
28/11/2014
Bank of Cyprus
AGM
20/11/2014
Thessaloniki Water
Q3:14
28/11/2014
Piraeus Port Authority
AGM
25/11/2014
AVG Research
Event
Credit rating review on Greece
Corporate
Date
Page 3
Daily Note
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Persons responsible for this report: Constantinos Zouzoulas (analyst)
Key Definitions
AVG Research 12-month rating*
Buy
The stock to generate total return** of and above 10% within the next 12-months
The stock to generate total return* *between -10% and 10% within the next 12Neutral
months
Sell
The stock to generate total return* * of and below -10% within the next 12 months
Under Review
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**total return: % price appreciation –percentage change in share price from current price to projected target price plus projected
dividend yield
AXIA Ventures Group Limited Rating Distribution as of today
Coverage Universe
Buy
Hold
Sell
Restricted
Not Rated
Under Review
Count
Percent
10
100%
Of which Investment
Banking Relationships
Count
Percent
5
50%
Daily Note
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Daily Note
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Research
Constantinos Zouzoulas
constantinos.zouzoulas@axiavg.com
+30 210 7414460
Louis Nikolopoulos
Louis.nikolopoulos@axiavg.com
+30 210 7414463
Argyrios Gkonis
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+30 210 7414422
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+30 210 7414429
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+30 210 7414425
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athanasia.markidi@axiavg.com
+30 210 7414428
Ioanna Georgiou
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