Unimot – 3Q19E results’ preview
The equities of Unimot remain one of our preferred picks. Similarly as a quarter ago we remain strongly optimistic with regards to the equities of Unimot (Buy, Overweight, 12M EFV of PLN 31.5 per share). We believe that the strong increases in the price of the equities recorded recently still did not close the valuation gap and there still seems to be a lot of fundamental upside potential.
The situation of Onico has become a huge opportunity for Unimot. The Company is clearly benefiting from the falling out of Onico from the fuel import business. First of all, Unimot managed to obtain a considerable part of Onico’s diesel and biofuel clients which has become pretty apparent given the staggering sale dynamics reported in July and August. Secondly, Unimot managed to recruit most of the bitumen business of Onico, which – the way we see it – could start generating 4 million EBITDA per annum starting from 2020. Moreover, the Company has big chances of utilizing the LNG shipping assets in Gdynia which were previously operated by Onico.
The Company’s EBITDA guidance is once again likely to be upgraded, in our view. Based on our updated estimates, in 1-3Q19 Unimot generated adjusted EBITDA of as much as PLN 45 million, while our FY19 EBITDA estimate increases to PLN 60 million. Such an estimate clearly shows that the current management EBITDA guidance for 2019 of PLN 46 million is conservative and bound to be increased. Please note that we remain quite bullish for 4Q19, given relatively stable fuel inland premium margins and the fact that Unimot will most probably recognize positive gains from the sale of diesel inventories repurchased indirectly from Onico.
The performance of inland premium fuel margins remains supportive. The Polish diesel fuel market remains in structural deficit and given the gradual increase in fuel demand it is not a surprise to us that the fuel inland premium margins are continuously at high levels. At the same time, the loss of Onico has probably acted as a support for inland premium margin. In this context the addition of diesel fuel products from Lotos’ EFRA units will most probably not be a game changer, in our view.
Unimot SA, formerly Unimot Gaz SA, is a Poland-based company engaged in the energy industry. The Company focuses on the trading of liquefied petroleum gas (LPG). The Company offers petroleum gas in bottles and tanks, to be used for heating and industrial applications, providing with the energy such sectors as services, agriculture, industry, household and bulk consumers. The Company is a distributor and an importer of LPG in the domestic market. In addition, the Company offers components from vegetable oils for diesel fuel, to be used as a pure fuel or as bio-component in conventional diesel fuel. Moreover, it is engaged in the wholesale of diesel. The Company also offers energy trade in Poland and Czech Republic, as well as distributes electric power to individuals and business customers. The Company is a part of the Group Unimot. It operates through Energogaz Sp z oo and Tradea Sp z oo.
BOS Brokerage, with over 20-year experience, offers brokerage services on the Polish capital market to satisfy numerous needs of institutional and retail investors.
Our comprehensive offer includes brokerage services on both the stock exchange and the forex market as well as brokerage services on the energy market, debt and equity issues, distribution of investment funds and assets management.
BOS Brokerage analytical team belongs to the most appreciated and acclaimed on the market. According to Parkiet daily’s poll (as of January 7, 2019), DM BOŚ equity research team was selected by institutional investors as the third best in Poland. Moreover, the team members won several individual best analysts awards, including Sobiesław Pająk – IT (best analyst), media/telco (ranked 2.), strategy (ranked 4.), Tomasz Rodak – video games (best analyst), overall ranked 5., Łukasz Prokopiuk – chemicals (ranked 2.), mining (ranked 3.), Maciej Wewiórski – real estate (ranked 3.).
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