Greek Oil Refiners: working in a Margin Wonderland (HELLENiQ Energy and Motor Oil Hellas upgraded to BUY)
The season of goodwill in the refining business never seems to come to an end. Strong diesel cracks have driven refining margins all year, and will continue into 2024E, in our view. Refinery capacity utilisations are high and middle distillate yields are down in Europe, due to changes in feedstock availability. Energy costs have been falling, with gas prices in 2023 at just one-third of where they were in 2022. We expect further declines in 2024E. Both companies are investing heavily in renewables and will reach 1GW by 2025E and 2GW by 2030E. Despite the investments, we expect the leverage to remain under control and dividends yields to be generous. We have upgraded Motor Oil Hellas to BUY (from Hold), with an updated 12M price target (PT) of EUR 31.6, offering 26.1% upside. We have also upgraded HELLENiQ Energy to BUY (from Hold), with an updated 12M PT of EUR 8.67, offering 20.4% upside.Autohellas is a Hertz national franchisee. Co. is engaged in the rent-a-car segment, comprising of renting (short-term lease) and fleet management (long-term lease and fleet management) in Greece, Bulgaria, Cyprus, Romania, Serbia and Montenegro. Renting covers the needs of both individuals and companies for occasional, small duration rentals up to 1 year long.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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