IBERIAN DAILY 30 OCTOBER + 3Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: FERROVIAL, OHLA, SACYR, SANTANDER, TELEFÓNICA, UNICAJA, VISCOFAN.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 3Q’23 results to be released over the coming days in Spain.
IBEX falls below 9,000 points in another week of drops
On track for the worst October in five years, most European indices ended with drops, marked by the rising tension in the Middle East, sovereign yields and the results campaign. In the STOXX 600, most sectors closed out the week with losses, led by Autos and Pharma, compared to the biggest gains in Basic Materials and Chemicals. On the macro side, in Spain the 3Q’23 GDP slowed less than expected (1.8% YoY vs. 2.0% YoY previously). In the US, personal outlays rose more than expected, with the underlying deflator at 3.4% YoY, as expected. In Germany, inflation in the Westphalia region suggests October’s inflation figure could be surprisingly low. In 3Q’23 US business results, Chevron and Exxon Mobil came in below expectations, Colgate beat expectations and Aon was in line.
What we expect for today
European stock markets would open with slight gains, with the oil sector hurt by the falling crude prices in a week full of Central Bank meetings, macro data and business results. Currently, S&P futures are up +0.42% (the S&P 500 ended -0.65% lower vs. the European closing bell). Volatility in the US rose (VIX 21.27). Asian stock markets are mixed (China’s CSI 300 +0.73%, Japan’s Nikkei -0.95%).
Today in the euro zone we will learn October’s economic confidence index, in Spain and Germany October’s inflation and in Germany the 3Q’23 GDP. In US business results, McDonald’s y Lowe’s, among others, will release their earnings.
COMPANY NEWS
UNICAJA. 3Q’23 results below estimates in provisions (-30%) and reformulation of ROTE. BUY
The 3Q’23 results came in slightly above estimates in NII (+1.4%, with lending falling -2.5%) and clearly below in provisions (-36% vs. consensus and -12% vs. BS(e)) due to CoR dropping from 40bps to 30bps. Net Profit was +4% above expectations. The NPL ratio fell (3.4% vs. 3.6% in 1H’23) due to portfolio sales in 3Q’23. CET1 stood at 14.2% (+38bps vs. 1H’23). ROTE was reformulated (5.7% vs. 5.2% in 1H’23), now taking figures from the past 12 months. In 1H’23 the figure was 7%, extrapolating the quarter. Following a flat performance YtD, the stock should react positively, but the market may not like the reformulation of ROTE. There will be a conference call at 9:30 (CET). BUY. T.P. € 1.36/sh. (upside +35%).
VISCOFAN, BUY
3Q’23 Results came in below expectations in both sales (-2.5% vs. +3.5% BS(e) and +2.2% consensus) and EBITDA (-7.0% vs. -1.5% BS(e) and -2.4% consensus). The performance continues to be hit by lower sale volumes in Asia Pacific (-12% vs. 3Q’22), the adjustment of inventories, lower electricity prices and FX. On the contrary, North America recovered (+4.2% LfL vs. 3Q’22).
In view of the operating and FX weakness, the management team cut its guidance: sales +4/5% (vs. +9/12% prev., +10.9% BS(e) and +7.5% consensus); (ii) EBITDA +2/4% (vs. +6/9% prev., +7.2% BS(e) and +4.2% consensus); (iii) Net Profit +4/7% (vs. +10/15% prev., +8.5% BS(e) and +3.4% consensus). The company expects this trend to be reverted in 2024, keeping its 2025 targets unchanged: (i) sales € 1.45 Bn (vs. € 1.46 Bn BS(e) and 1.42 consensus); (ii) EBITDA € 362 M (vs. € 367 M and 350 consensus); (iii) EBITDA Margin 25% (vs. 25.1% BS€ and 24.7% consensus).
We foresee a negative impact from these results due to the guidance’23 cut although the weak share price performance from March’23 levels (-25.5% vs. IBEX) could curb corrections.
Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.
Ferrovial is a transportation company based in Spain. Co. is engaged in operations in the transportation sector. Co. specializes in the design, construction, management, administration and maintenance of transport infrastructures. Co.'s services range also includes the maintenance of parking lots, and land-, sea- and air-based transport networks. Co. is also engaged in the promotion and operation of short-stay parking lots, parking regulation and management services and promotion and sale of residents' parking.
Obrascon Huarte Lain is an international concession and construction groups based in Spain. Co. maintains significant operations in 30 countries across all five continents. Co. is engaged in hospital and railway construction, transport infrastructure concessions, oil and gas, energy, solids handling and fire protection systems and international contracts. Co.'s operations are organized along four divisions: OHL Concesiones, OHL Construccion, OHL Industrial y OHL Desarrollos. Co. is also engaged in real state project developments of mixed use managed by the international hotel chains.
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.
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.
Unicaja Banco SA is a Spain-based financial institution (the Bank) engaged in the banking sector. The Bank offers services to individual and business customers. Its products and services range includes current and savings accounts, debit and credit cards, consumer and commercial loans, real estate credit, securities brokerage, funds management, leasing, factoring, pension plans, life and non-life insurance, international trade financing, money transfer, as well as treasury, among others. The Bank operates a number of branches in Spain and Morocco. The Bank is controlled by Fundacion Bancaria Unicaja.
Viscofan is the parent company of the Viscofan Group. Co. is divided into two major operational subgroups. The companies comprising the Naturin GmbH subgroup are engaged in the manufacture and distribution of artificial casings (small and big diameter collagen and plastics) for the meat industry. Through its wholly-owned subsidiary IAN, S.A., Co. also manufactures and distributes canned vegetables (asparagus, olives and tomato).
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