IBERIAN DAILY 22 FEBRUARY + 4Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, IBERDROLA, NEINOR HOMES, REPSOL, TALGO, TELEFÓNICA.At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 4Q’23 results to be released over the coming days in Spain.
New rises in Europe
Awaiting the Fed minutes and NVIDIA’s results, European stock markets ended with slight gains. In the STOXX 600, Autos and Retail led gains, whereas Banks and Pharma ended with the biggest drops. On the macro side, in the euro zone, February’s preliminary consumer confidence improved almost in line with expectations. In Mexico, December’s retail sales slowed down unexpectedly. In the US the Fed minutes did not bring many surprises with several members warning about the risks of cutting rates too soon in view of a disinflation process that could have come to an end. On another note, all indications suggest March to initiate the discussions on the destination of the QT, which could continue even after the beginning of rate cuts. In Japan, both the manufacturing and services PMI fell slightly in February. In US business Results, NVIDIA and Garmin beat expectations and Verisk came in worse than expected.
What we expect for today
European stock markets would open with gains of up to +0.8%, fuelled by the technology sector. Currently, S&P futures are up +0.75% (the S&P 500 ended +0.25% higher vs. the European closing bell). Asian stock markets are climbing (China’s CSI 300 +0.64%, Japan’s Nikkei +2.19%).
Today in the euro zone we will learn February’s preliminary PMI data, in Mexico December’s IGAE activity index, and in the US weekly jobless claims and January’s existing home sales. In US business results, Vale, Pioneer and Edison, among others, will release their earnings.
COMPANY NEWS
NEINOR HOMES, BUY
The company had already released a trading update, and thus these results are unsurprising. Sales € 705 M (-7.8% vs. -7.8% BS(e)), EBITDA € 136 M (-6.8% vs. -4.1% BS(e)).
Although it is true that in the end the adjusted EBITDA figure is lower than the company itself had expected (€ 136 M vs. € 140 M expected), this is due to the fact that HOME has decided to delay the recognition of a € 12 M margin for fiscal reasons. Medium- and long-term forecasts: The company has raised its EBITDA guidance for 2026-27 by +10% to € 100-110 M (vs. € 104 M BS(e)). Furthermore, it has reiterated its expectation of paying € 200 M of dividends over the next 12 months. Net presales for the year totaled 1,781 units, with the presales book as of the year end reaching 1,283 units worth € 434 M (-21% vs. Dec’22).
We do not expect a significant impact from these results. Although the presales data for 2023 is lower than we expected (~1,900-2,000 units), the fact of the matter is that it is consistent with the company’s strategy of reducing its balance sheet. Additionally, HOME estimates that it needs to presell ~2,700 units over the next 24 months (~1,350 units/year) to meet its targets, which seems reasonable.
REPSOL. 4Q’23 results beating expectations. Improved dividend and more buybacks in the Strategic Plan. BUY
The 4Q’23 results beat expectations (€ 1.193 Bn vs. € 1.001 Bn consensus) due to the Upstream division, the company has announced an improvement to the DPS’23, which rises to € 0.90/sh. (vs. € 0.80 expected; 6.5% yield) and more buybacks (35 million shares and cancelling 40 million shares, 3.29% of capital). In the Strategic Plan the company also raises shareholder remuneration over the period (to € 1.26/sh. in 2027; 3% annual growth) and more buybacks (€ 5.4 Bn). REP will continue to invest (net capex € 16-19 Bn) and is mulling an IPO of its Upstream division. FCF of € 9-11 Bn. The company will continue with its decarbonisation process (9-10 GW in 2027e). We expect a positive reaction.
TELEFÓNICA. 4Q’23 Results above expectations in sales and adjusted EBITDA. Better 2024 Guidance in sales. BUY.
4Q’23 Results came in above expectations in sales (-0.5% vs. -2.5% BS(e) and -2% consensus), better than our estimates in all regions and with lower reported EBITDA (due to higher provisions), although with better adjusted EBITDA (+5% vs BS(e), +4% vs. consensus). On the domestic market results are better in sales and EBITDA, with favourable dynamics in retail revenues (+3.2%). FCF stands out (€ 1.56 Bn), which exceeds expectations (+3% vs. BS(e), +14% vs. consensus). As for the 2024 guidance, the company foresees +1% sales growth (vs. +0.3% consensus, +1.9% BS(e)) and up to 13% Capex/revenues (vs. +12.7% consensus, 13.8% BS(e)). We expect a positive market reaction (+4% vs. IBEX in 2024).
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.
Iberdrola is a holding company. Through its subsidiaries, Co. operates in four segments: network business, which includes all the energy transmission and distribution activities, and other regulated activity originated in Spain, the U.K., the U.S. and Brazil; deregulated business, which includes electricity generation and sales businesses as well as gas trading and storage businesses carried on by Co. in Spain, Portugal, the U.K. and North America; renewable business, with activities related to renewable energies in Spain, the U.K., the U.S. and the rest of the world; and other businesses, including the engineering and construction businesses and the non-power businesses.
Neinor Homes SA, formerly Neinor Homes SLU, is a Spain-based company engaged in the real estate sector. The Company focuses on the design, construction and promotion of residential properties. It develops housing projects in various Spanish cities, such as Malaga, Madrid, Barcelona, Cordoba, Vizcaya, Alicante, Almeria and Gerona.
Repsol is an oil and gas company. Co. is engaged in all the activities relating to the oil and gas industry, including exploration, development and production of crude oil and natural gas, transportation of oil products, liquefied petroleum gas (LPG) and natural gas, refining, the production of a wide range of oil products and the retailing of oil products, oil derivatives, petrochemicals, LPG and natural gas, as well as the generation, transportation, distribution and supply of electricity. Co. operates in more than 40 countries. Co.'s operations are divided into four segments: Upstream, Downstream, LNG and Gas Natural Fenosa.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
Telefonica is engaged in the provision of public or private telecommunications services, including ancillary or complementary telecommunications services or related services. Co.'s fixed business includes: traditional fixed telecommunication services, Internet and broadband multimedia services, data and business-aplications services, and wholesale services for telecommunication operators. Co. also provides a range of mobile and related services and products to consumer and business customers, including mobile voice services, value added services, mobile data and Internet services, wholesale services, corporate services, roaming, fixed wireless, and, trunking and paging.
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