IBERIAN DAILY 26 APRIL + 1Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: IBERDROLA, METROVACESA, REDEIA, ROVI.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 1Q’23 results to be released over the coming days in Spain.
Profit-taking on the stock markets
The European stock markets saw sell-offs, penalised by the 1Q’23 results releases on both sides of the Atlantic and the spectre of the US banking crisis (First Republic slid -49% and mulls selling up to US$ 100 Bn worth of assets). Within the Euro STOXX, standing out among the few sectors that ended in the black were Food, Financial Services and Travel & Leisure, whereas Banks and Basic Resources saw the bigger drops. On the macro side, in Spain, industrial production prices contracted in March YoY for the first time since December 2020. In the US, consumer confidence fell more than expected in April, pricing in the worse performance of the S&P500. March’s new home sales climbed more than expected, as did February’s housing prices, and the Richmond manufacturing index worsened somewhat more than expected in April. In Mexico, the IGAE activity index slowed more than expected in February. In US business results, Microsoft, Alphabet, General Motors, Visa, McDonald’s, 3M, Moody’s and General Electric came in better than expected, and PepsiCo in line.
What we expect for today
European stock markets would fall -0.5%. Currently, S&P futures are up +0.48% (the S&P 500 ended -0.86% lower vs. the European closing bell). Volatility in the US rose (VIX 18.76). Asian markets are mixed (China’s CSI 300 +0.05% and Japan’s Nikkei -0.64%).
Today we will learn in the US March’s preliminary wholesale inventories and March’s preliminary durable goods orders. In US business results, Meta, Boeing, ADP, Glencore and O’Reilly, among others, will release their earnings. In debt auctions: Germany (€ 2.5 Bn in bonds due 2035).
COMPANY NEWS
METROVACESA. BUY.
Deliveries in Q1 were in line with what we expected: 331 units vs. 337 units BS(e) and vs. guidance of 1,500-2,000 for all of 2023, but with higher average prices. Sales: € 79.5 M (-43.7% vs. -48.7% BS(e)). EBITDA: € 4.4 M (-71.8% vs. -94.9% BS(e)). Net Profit: € -3.6 M (€ 10.7 M in 1Q'22 vs. € -1.3 M BS(e)).
Presales were satisfactory: 425 units, consistent with a run-rate of ~1,700-2,000 units sold annually. Presales coverage is >85% for 2023 and >60% for 2024.
The results are in line with expectations and are not very representative due to the low number of deliveries in 1Q’23, which does not allow the company to cover the cost structure. However, this is due to the calendar effect, as deliveries concentrate in the second half of the year. Additionally, more than half of the quarter’s deliveries were BtR, with lower prices. The results came in very much in line with expectations and do not change our stance on the company.
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.
Laboratorios Farmaceuticos Rovi is engaged in the sale of its own pharmaceutical products and the distribution of other products for which it holds licenses granted by other laboratories for specific periods, in accordance with the terms and conditions contained in the agreements entered into with said laboratories.
Metrovacesa SA, formerly Metrovacesa Suelo y Promocion SA, is a Spain-based real estate developer. The Company specializes in construction and sale of sustainable housing, both single-family and multi-family residential properties. Its activities also include promotion, urbanization and parceling of real estate in general, as well as real estate management for own benefit or on behalf of third parties. Its asset portfolio includes more than 6 million square meters of building land across Spain, as well as already developed properties in cities, such as Malaga, Almeria, Cordoba, Barcelona and Madrid, among others.
Red Electrica is engaged in the transmission of electrical energy, the operation of the system and the management of the transmission network in the Spanish electricity system. In addition, through its subsidiaries, Co. is engaged in the acquisition, holding and management of foreign securities, co-ordination of international exchanges, provision of telecommunications services for third parties, provision of consultancy, engineering and construction services outside the Spanish electricity system, securing of funds, carrying out of financial transactions and provision of financial services.
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