IBERIAN DAILY 05 NOVEMBER + 3Q'21 RESULTS. PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, ACCIONA ENERGÍA, ACS, APPLUS, CAIXABANK, MELIÁ HOTELES, ROVI, SACYR.MARKETS YESTERDAY AND TODAY
At the end of today’s report, and during the entire results season, we will include a presentation with previews for the 3Q’21 results to be released over the coming days in Spain.
The Ibex does not take part in the rally
European stock market saw gains, where the Fed message based on short-term rate rise expectations was reinforced with the BoE’s decision of not raising rates, which weighed on indices with higher weight in financials, such as the Ibex. In the Euro STOXX, Real Estate and Technology were the best-performing sectors (after the tightening of debt curves) and Basic Resources ended with the worst performance. On the macroeconomic level, as expected, OPEC+ will keep the increase in output agreed in the summer (+400,000 b/d monthly). In Germany, September’s factory orders climbed less than expected due to supply problems. In the euro zone, October’s services PMI was cut slightly although remaining at high levels. In Spain, the BoS warned about the risks in the hotel and restaurant industry, transport and automobiles given the rise in inflation. In the US, weekly jobless claims fell slightly more than expected. In Japan, real household consumption recovered more than expected in September. In China, the home development group Kaisa has been suspended from trading given liquidity problems and after a subsidiary defaulted a guaranteed product.
In US Results Citrix Systems, News Corp, Motorola and Kellogg beat expectations while Moderna released disappointing figures.
What we expect for today
European stock markets would open flat with some bearish bias after the doubts outlined by the WHO on a new outbreak of Covid-19 in Europe and the energy sector dragged down by the new drops in Brent crude. Currently, S&P futures are flat (the S&P 500 ended +0.18% higher vs. its price at the closing bell in Europe). Volatility in the US rose (VIX 15.44). Asian markets are sliding (China’s CSI 300 -0.2% and Japan’s Nikkei -0.6%).
Today in Spain and Germany we will learn September’s industrial output, in the euro zone September’s retail sales, in Mexico October’s consumer confidence and in the US non-farm employment, wage gains and October’s unemployment rate. In US business results, Kimco, Dominion Energy and Ventas among others, will release their earnings.
COMPANY NEWS
MELIÁ HOTELES. Better 3Q’21 Results on the operating level. SELL
Better 3Q’21 Results on the operating level (EBITDA excluding capital gains), reporting € 63.1 M vs. € 54 M BS(e) and € 55 M consensus). 9M’21 EBITDA (excluding capital gains) reached break even (around € 0.7 M). However, sales came in below expectations (+165.8% vs. +169.7% BS(e) and +172.4% consensus). In terms of cash generation, on a standalone basis on the quarter MEL generated positive cash (around € 2 M) and net debt (pre IFRS 16) totalled € 1.261 Bn, with € 439.5 M of total liquidity (€ +34.5 M vs. 2Q’21). The company stressed the need of lowering debt, and thus it continues to seek asset rotation options (in addition to thos already carried out). Visibility remains low, mainly with last-minute bookings and at different speeds depending on the segment and region although it expects the recovery to consolidate in the 4Q’21: (i) The recovery of international travel will be positive for those markets with lower potential of domestic clients (Caribbean, for instance). (ii) In the resort segment, bookings in the Canary islands and the Caribbean region stand out. (iii) In the urban segment, we see a significant recovery in most cities (both in the main and secondary ones), with the exception of London and Barcelona, being more dependent on corporate travel and MICE. (iv) MEL foresees organic growth in the Caribbean, Mediterranean regions and Southeast Asia.
In short, better results although with still low visibility into the strength of the recovery, while we believe that at current prices the share price is already factoring a positive scenario. In the past 3 months, MEL has outperformed the Ibex by +9.4%, already beating pre-Covid levels in terms of EV (+5%).
Acciona is the parent company of a construction group. Co. is engaged in general construction activities in the areas of civil engineering and buildings, including railways, marine and hydraulic works, motorways and airports, town planning, conduits, pavements, parking lots, and industrial and urban buildings. In addition, Co. is engaged in the provision of real estate services, the operation of parking lots, telecommunications, services, ecology and alternative means of energy. Co.'s operations are organized in six business divisions: Infrastructures, Real Estate, Energy, Water, Environmental & Urban Services and Logistic & Transport Services.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
Applus Services SA is a Spain-based company that provides inspection, testing and quality assurance services. The Company's activities are divided into five segments: Applus+ RTD, which provides non-destructive testing services mainly to the oil industry; Applus+ Velosi-Norcontrol, which offers solutions for technical assistance, supervision, inspection, quality control testing, certification and consulting services mainly to industrial, electrical, oil and telecommunications facilities; Applus+ Laboratories, which focuses on laboratory testing, system certification and product development services within aerospace, industrial and consumer goods sectors, among others; Applus+ Automotive, which is responsible for the vehicle roadworthiness testing services, and Applus+ IDIADA, which delivers design, engineering, testing and certification services mainly to car manufacturers. The Company operates in Europe, Africa, Asia and the Americas.
Caixabank is an investment company based in Spain. Co. is involved in investment portfolio management activities across two areas: Services and Financial Business and Insurance. In the services area, Co. provides investment solutions for companies involved in the infrastructure, energy, services and entertainment sectors. In the financial business and insurance area, Co. is engaged in the investments for international banks, insurance and specialist financial services. Co. focuses most of its banking investments in India, China, the U.S., and Central and Eastern Europe with a particular interest in retail banking. Co. is also involved in the disinvestments activities.
Laboratorios Farmaceuticos Rovi is engaged in the sale of its own pharmaceutical products and the distribution of other products for which it holds licenses granted by other laboratories for specific periods, in accordance with the terms and conditions contained in the agreements entered into with said laboratories.
Melia Hotels International is the parent company of a group engaged in the acquisition, management and operation of hotels. Co. operates its hotel network in Germany, Argentina, Brazil, Bulgaria, Cabo Verde, Chile, China, Costa Rica, Croatia, Cuba, Egypt, Spain, United States, France, Greece, Netherlands, Indonesia, Italy, Luxembourg, Malaysia, Mexico, Panama, Peru, Portugal, Puerto Rico, United Kingdom, Dominican Republic, Singapore, Switzerland, Tunisia, Uruguay, Venezuela and Vietnam under the followings brandnames: Paradisus Resorts®, Melia Hotels & Resorts®, TRYP Hoteles® and Sol Hotels & Resorts®.
Sacyr is the parent company of a group engaged in the acquisition, development and construction of urban properties for their subsequent rental or resale. Co. primarily leases and sells office buildings and complexes, housing units, and shopping centers. Co. is also engaged in the operation of urban car parking facilities. Co. offers services related to the real estate industry such as technical assistance in energy savings, inventory management, architectural design, telecommunications management, property maintenance, as well as gardening and landscaping. Co. also provides consulting services in the real estate fund management sector.
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