IBERIAN DAILY 20 OCTOBER + 3Q’20 RESULTS PREVIEWS WEEK 19 TO 23 OCTOBER (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ENAGÁS, IAG, NH HOTELES, OHL, PRISA.At the end of today’s report, and during the entire results season, we will include a presentation with results highlights and previews for the 3Q’20 results to be released this week in Spain.
MARKETS YESTERDAY AND TODAY
Doubts at the beginning of the week
The initial gains seen in the early morning following China’s mixed data eased throughout the session due partially to the deadline imposed by N. Pelosi (Tuesday, 20 October) to reach an agreement on the fiscal stimulus plan and the risk of a disputed electoral result. However, value stocks closed again part of the gap vs. growth at both sides of the Atlantic, with the rises of financials standing our after C. Lagarde outlined that the recovery fund could become a permanent tool. Thus, in the Euro STOXX, Banks and Insurance led gains while Chemicals and Household saw the biggest drops. In the US, the unexpected rise in October’s NAHB construction confidence index underpinned the better performance in materials and cyclical consumption sectors in the S&P500. In US Results, Halliburton came in better than expected.
What we expect for today
The European indices would open with drops of less than -0.5%, with value stocks performing relatively better as Covid-19 infections increase on both sides of the Atlantic, but amid good news as regards the vaccine (the CEO of Moderna believes that the FDA will authorise the emergency use of the vaccine by December). Currently, S&P futures are up +0.2% (the S&P 500 closed down -1.25% vs. its price at the closing bell in Europe). Volatility in the US increased (VIX 29.18). Asian markets are falling (Hong Kong -0.2%, Japan -0.6%).
Today in the US we will learn housing starts and construction licenses (September). In US business results, Travelers, Procter&Gamble, Philip Morris, PACCAR and Netflix, among others, will release their earnings. Debt auctions: Germany (€ 4 Bn in bonds due 2022).
COMPANY NEWS
PRISA. Sale of Santillana España and debt refinancing. SELL.
The company announced yesterday the sale of Santillana España (~20% of the gorup’s EBITDA) to Sanoma for € 456 M (EV: 9.3x pro forma EV/EBITDA’19) in cash (capital gains of € 385 M vs. Net Profit’21 e of € 36 M). It also announced the refinancing of its debt (agreed with 79.7% of creditors), extending maturities to 2025 (from the previous 2022), that it will repay a € 400 M syndicated loan and that it has obtained an additional € 110 M of credit lines. With the sale of Santillana Spain the company manages to reduce group debt by around -38%, lowering the gearing ratio in 2021 to ~4x (from the current ~8x), with an impact of
Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.
International Airlines Group is an international scheduled airline and global premium airlines. Co.'s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports.
NH Hotel is engaged in the operation and management of hotels throughout Spain, the Benelux countries, Germany, and South America.
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.
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