ACERINOX: 3Q'19 RESULTS AND T.P. CUT (ANÃLISIS BANCO SABADELL)
3Q'19 vs. 3Q'18 ResultsSales: € 1.22 Bn (-5.0% vs. -2.5% BS(e) and -7.4% consensus);
EBITDA: € 103.0 M (-33.1% vs. -38.2% BS(e) and -37.7% consensus);
Net Profit: € 44.0 M (-47.0% vs. -56.0% BS(e) and -55.4% consensus);
9M'19 vs. 9M'18 Results
Sales: € 3.662 Bn (-5.4% vs. -4.6% BS(e) and -6.2% consensus);
EBITDA: € 289.0 M (-31.5% vs. -33.4% BS(e) and -33.2% consensus);
Net Profit: € 113.0 M (-48.9% vs. -52.3% BS(e) and -52.0% consensus);
ACX has released better results than expected on the operating level and in Net Profit. On the EBITDA level the results are marred by a € -9 M inventory revaluation (as a result of the fact that the company has not been able to pass on 100% of the nickel price increase to all its clients), but also positively affected by the sale of a warehouse in California (€ 7 M), and thus the final EBITDA figure is almost fully comparable to the forecast. As for the future outlook, the company states that it continues to see heavy pressure on prices and that the 4Q’19 results will be similar to 3Q’19, which would bring the recurring EBITDA figure to €~390 M (vs. € 418 M BS(e)).
We take the opportunity of these results to cut our estimates for EBITDA’19 by -7% and by -10% on average for 2020/21 due to a weaker price scenario than expected in Europe. Our figures are -8.5% below those of the consensus, which we believe will have to be cut further. We cut our T.P. by -14% to € 9.80/sh. The upside potential stands at +14%, and thus we maintain our BUY recommendation, with the main drivers being a US-China trade agreement and, especially, more robust protectionist measures in Europe (which must no be ruled out, even if they do not appear imminent).
Acerinox is the parent company of a group engaged in the manufacture and sale of flat and long stainless steel products, and stainless steel wires. Co.'s major products include slabs, billets, black coils, plates, hot-rolled coils, hot-rolled sheets, flat bars, hot-rolled re-bars, hot-rolled black bars, engraved sheets, cold-rolled coils, cold-rolled sheets and circles. Co. also provides long stainless steel products, such as wire rods, angles, hot rolled flat bars, hot rolled re-bars, reinforced bars in coils, cold rolled re-bars, hot rolled black bars, cold drawn bars, and smooth turned bars. In addition, Co. offers wires, welding wire bars, and bars for electrodes.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.