Mytilineos | Energy to the fore
In this report we offer an updated viewpoint on the group’s main operating segments. We discuss current operating dynamics in the domestic energy sector, which support strong performance by the Power & Gas arm. We argue that Metallurgy should not be a source of concern despite LME price volatility, since we believe the market is overreacting to the USD metal price change, while overlooking the favourable FX for Euro-denominated players.We also shed light on the new CCGT unit, which is expected to enter commercial operation at the end of 2021e, contributing sales and EBITDA of €300mn and €80mn per annum respectively and incremental operating cash flows of €60mn per annum (+20% vs. our previous assumptions).
We reiterate our Buy rating and set a new target price of €14.40 from €13.40 previously, which effectively values the group at c 7.5x 2020e EV/EBITDA.
Mytilineos Holdings is an industrial group engaged in the sectors of Metallurgy, EPC, Energy, and Defence. Co. and its subsidiaries are engaged in three main operating business segments: Metallurgy, Constructions and Energy. Co. and its subsidiaries monitor its performance on Metallurgy and Mining Sector through the subsidiaries Aluminium S.A. (Alumina-Aluminium) and Sometra S.A. (Zinc-Lead). Co., through its subsidiary, METKA S.A., is an EPC Constructor in Greece.
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.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
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