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GREEK ENERGY | Greek Power Play Handbook: 2025 Edition

Charging in a new era; Prefer power companies over refineries – The Greek energy market underwent structural shifts in 2024, with disruptions in Eastern Europe driving high intraday volatility in electricity prices, which is likely to persist as long as Greece remains a net electricity importer. Since regulatory interventions were lifted in 2024, power generation units saw a step-up in their spark spreads, capturing 2-digit premia vs baseload prices amidst daily price spikes, while the retail market remains concentrated within the Big 5, who have shown little appetite for serious price wars. Renewables development continued to accelerate in 2024 (>2GW added; >16% higher yoy), with RES penetration reaching 40% of the energy mix (vs 36% in 2023). This rapid growth introduced curtailments of 901MWh (3.5% of RES generation), which we expect to persist and squeeze load factors until storage capacity is added to the system. Meanwhile, refineries experienced the long-awaited normalization of refining margins in H2’24, following sizable net additions of refining capacity in 2023/24. At these margins, capacity closures are anticipated, but their impact will likely materialize in 2026. Combined with muted fuels demand in Europe, this creates an opaque refining outlook, though the growing local fuels market offers some support. As such, we favor power companies (Metlen & PPC) in 2025, given their robust vertically integrated positions, which render them immune to shifts in natural gas prices.

PPC: It’s all about Implementation – Despite hosting two CMDs in 2024 with sequential target upgrades (c6GW RES additions by 2027), PPC’s stock price has yet to rerate, with investor focus remaining on timely implementation and adherence to the self-imposed leverage cap. Following the Nov.’24 CMD, we raise our FY’25 EBITDA to €2.0bn (+11% yoy; in-line with guidance) but adopt a more cautious growth outlook vs mgt guidance, assuming 30% fewer RES additions by 2027 and FY’27e EBITDA of €2.3bn (13% below guidance). Yet, we still see ample upside and lift our PT to €17.7 (from €17.5), placing PPC at 7.4x 2025e EV/EBITDA, justified by its superior growth profile vs foreign peers.

Metlen: Growing fast with a British aura – Metlen’s shares traded sideways in 2024, despite the healthy EBITDA growth profile, which remains supported by: 1) enhanced visibility of its rapidly growing RES segment (14GW portfolio), 2) the new CCGT capturing spark spreads >€30/MWh, 3) a growing retail energy platform (c20% mkt share) and 4) the expanding integrated Metals business. Our updated estimates forecast FY’25e EBITDA of €1.2bn (+8% yoy) and coalesce to a recalibrated PT of €48.0. We expect the anticipated LSE listing in H1’25 to catalyse a stock rerating.

HelleniQ Energy: Refined integrated energy play – The streamline of its P&G portfolio suggests LT value creation, but the muted refining environment poses challenges for 2025, with FY’25e EBITDA set to drop 18% yoy to €767m constrained by softer refining margins & lower utilization (maintenance). The incremental impact of the “windfall tax” and our revised refining margins shape our PT to €8.8, with the Buy case underpinned by a 11% 2025e cash yield, including a special dividend from the DEPA Commercial deal.

Motor Oil: The worst is now behind – The disruption caused by the fire is set to be fully resolved by Q3, with H1’25 likely to be tough due to base effects, however the insurance payments related to lost profits (EEe >€150m) should mitigate the impact. The latter is already largely reflected in the stock, now trading just 5% below its September levels. Filtering through the above and the subdued refining environment, we forecast FY’25e EBITDA at €920mn (-6% yoy). After lowering our mid-term refining margins, we revise our 12m PT to €28.1 but keep our Buy given the subdued valuation.