IBERIAN DAILY 23 OCTOBER + 3Q’24 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ENERGY SECTOR, GLOBAL DOMINION, IBERDROLA.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’24 results to be released over the coming days in Spain.
Debt cools the markets
European stock markets ended flat in a session marked by the doubts surrounding the sustainability of sovereign debt. In the STOXX 600, Technology led the gains, with Utilities and Insurance posting the biggest losses. On the macro side, the IMF left growth estimates for the global economy unchanged at 3.2% for 2024 (for 2025 it lowered the estimate from 3.3% to 3.2%) thanks to the greater growth expected for the US (2.8% and 2.2% vs. 2.6% and 1.9% previously), whereas it lowered that of the euro zone by -0.1pp to +0.8% for 2024 and -0.3pp to 1.2% for 2025 (stagnation in Germany in 2024 and only +0.8% in 2025). The growth forecast for Spain rose +0.5pp for 2024 to +2.9% (unchanged for 2025 at +2.1%). In Mexico, August’s economic activity (IGAE) contracted more than expected. In US business results, General Motors and Moody’s released better profits than expected, 3M, Verizon and Paccar were in line and McDonald’s and Starbucks released disappointing earnings.
What we expect for today
Stock markets would open with slight gains in a session dominated by earnings releases. Currently, S&P futures are down -0.10% (the S&P 500 ended +0.21% higher vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +1.07%, Japan’s Nikkei -0.74%).
Today in the euro zone we will learn October’s consumer confidence and in the US September’s second-hand home sales. In US business results, Coca-Cola, Hilton, Tesla and T-Mobile, among others, will release their earnings.
COMPANY NEWS
GLOBAL DOMINION, OVERWEIGHT
The 3Q’24 results showed operating performance in line with expectations (€ 36 M of EBITDA vs. € 36 M BS(e) and € 35 M consensus) and a slight slowdown in organic growth in 9M’24 to +4.9% (vs. +4.7% in 1H’24 and vs. guisance’24 of more than +5%). The company has announced the sale of the industrial maintenance services business for € 27.5 M (~5.7x EV/EBITDAe vs. 3.6x DOM; ~14% NFD), a business with low margins (4.5% EBITDA vs. 12.6% DOM), which we see as positive. As there was no express mention made, we understand DOM maintains its guidance of organic sales growth above +5% CAGR’23-26e (vs. +5.8% BS(e)) and EBITDA above +7% CAGR’23-26e (vs. +6.9% BS(e)).
We expect a positive slant to the reception following the stock’s poor performance YtD (-14% in absolute terms and -31% vs. the IBEX).
Global Dominion Access SA is a Spain-based company primarily engaged in the construction and engineering sector. The Company's activities are divided into two segments: Multi-technological Services, which offers design, implementation and maintenance of fixed and mobile telecommunications networks, manages sales and distribution processes for telecommunications carriers, as well as renders of inspection, maintenance, repair and renovation services for industrial and energy firms, and Solutions and EPCs, which executes turnkey Engineering-Procurement-Construction (EPC) projects, provides construction, repair and renovation of industrial heating installations, as well as develops processes and other technological and business solutions in numerous sectors. Its services are provided in three areas: Technology and Telecommunications (T&T), Industry and Renewable energies. It operates worldwide in Europe, the Americas, Asia and Africa. The Company is a subsidiary of CIE Automotive SA.
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.
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