Motor Oil | Capex ramp up to enhance future FCF
In this report we are reflecting the group’s new capex plan in our numbers and reassessing the group’s longer term cash generation capacity, leading to a c. 10% upgrade to our 12m TP. Following years of significant cash generation and concurrent shareholder remuneration the group has opted to capitalize on its operating flexibility and ample balance sheet capacity to undertake a new capex plan involving a naphtha complex. This EUR 310mn project aims to produce some 700 MT of high value products, the vast majority (80-85%) being higher octane gasoline, hydrogen and kerosene. The objective is to benefit from the price differential between the lower value naphtha vs. higher value gasoline, which effectively given the production capacity can deliver as much as EUR 90 to EUR 100mn as per management in EBITDA upon completion. The project is expected to be completed by the end of 2021.Motor Oil Hellas Corinth Refineries operates in the oil sector with its main activities being oil refining and oil products trading. Due to its flexibility, Co. can process crude oils of various characteristics and produce a full range of petroleum products, complying with the most stringent International Specifications, serving major petroleum marketing companies in Greece and abroad. Apart from fuels, Co. is the only lubricants producer and packager in Greece. Base oils and finished lubricants produced, are approved by International Organizations, ACEA, API, the U.S. NAVY & ARMY.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
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