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AEDAS: 3Q’20 RESULTS AND T.P. INCREASE (ANÁLISIS BANCO SABADELL)

3Q'20 vs. 3Q'19 Results:
Sales: € 210.9 M (-15.8% vs. -25.9% BS(e) and -21.1% consensus);
EBITDA: € 46.4 M (-31.0% vs. -51.9% BS(e) and -42.4% consensus);
Net Profit: € 31.2 M (-30.7% vs. -52.0% BS(e) and -32.4% consensus).
9M'20 vs. 9M'19 Results:
Sales: € 277.1 M (-6.8% vs. -15.3% BS(e) and -11.3% consensus);
EBITDA: € 44.1 M (-25.0% vs. -49.0% BS(e) and -38.1% consensus);
Net Profit: € 22.9 M (-34.6% vs. -62.0% BS(e) and -36.9% consensus).

The results are basically in line with expectations on the commercial front (397 pre-sales in 3Q vs. 405 BS(e)) and above the P&L statement thanks to a higher delivery volume and higher ASP (347k vs. 332k). The 3Q’20 deliveries on a stand alone basis totalled 607 units, equivalent to € 211 M (vs. € 186 M BS(e)), with a 28% gross margin. Deliveries through Dec’20 total 920 units while 901 units are completed with first occupation licence awarded, and thus the company should be able to meet its delivery targets (around 1,900 units) in a year with an increasing performance (note that AEDAS changed the end of its fiscal year to March).
As for commercial activities, 99% and 63% of the deliveries expected for the years closed in March’21 and March’22 have already been pre sold, which gives high visibility into the short-term. AEDAS reiterates its delivery guidance for the next few years, although we see that the percentage of deliveries expected in two years time (FY2022/2023) currently are under construction is 57%, this level stands a bit below what would be desirable.
The share price has risen by +96% from 2020 lows and it is at pre Covid-19 levels but we believe it still has upside, and thus with these results we raise our T.P. by +18% to € 25.10/sh. (+21% upside, see details further down in this report) after revising our estimated based on the good delivery pace expected and other adjustments.
We highlight that the company will pay a dividend of € 1.00/sh. at the closing of the year (March 21), equivalent to a 4.8% yield, which we believe is sustainable, based on the company’s prospects for cash generation over the next few years. It is trading at a P/E (12-month) of 9.6x and at a discount of -38% to NAV (vs. -33% for HOME and -63% for MVC). We reiterate our BUY recommendation.