IBEX


Repsol: intuitive purchase with short term potential return of 10%

Morgan Stanley |  With oil up 30% YTD, fairly decent quarterly figures, dividends easily covered, with potential to grow and clearly above a market without upside, and with a process of positive profit revisions, we insist in dedicating half an hour to two ideas which are now being oversold and which have lost all they gained in Q1 and which their high dividend is clearly attractive in the market and which we believe could have returns of around 10% in the relatively short term.


After selling Nicaragua (390 M€, NFD -1%) Telefonica leaves Central America

Banc Sabadell | Telefonica (TEF) confirmed last week the sale of its subsidiary in Nicaragua for 390 M€ and so completes the sale of all its activities in Central America for a total of 2.052 M$/reduction of debt by 1.4 M€ (7.4x OIBDA 2018 vs our valuation of 6/7x for all the subsidiaries). The Spanish telco will reduce its net financial debt by 1% with this operation.

 


CIE Automotive

CIE Automotive renews a loan of 690 M€ until 2024

At the close of Q12019 CIE signalled that it’s net financial debt has risen to 943.6 M€, which implies a NFD/EBITDA ratio of 1.74X. Positive news for the firm, as it has more funds to increase the loan and extend repayment to 2024.


Abengoa desalination plant

Abengoa will build the largest reverse osmosis desalination plant in the EAU

Abengoa will begin construction of an inverse osmosis desalination plant of 909,000 cubic metres per day in Taweelah (UAE), which will be the largest plant of this kind of technology in the world. The project is valued at more than $700 M (623 M€), of which $243 M (216 M€) corresponds to Abengoa over the next 3 years, according to the Sevilla-based firm´s communication to the regulator (CNMV).




Telefonica Brasil did not correctly reflect incentives in its registers

Alphavalue | Telefonica´s poor figures for Q119 traded with falls of 31%. Sales of 11.98 Bn€ › 11.81 Bn€ estimated by the consensus. Our analysts highlight that the operator improved income in all the geographic areas where it is present, especially in Spain and Brazil, its two main markets.


After recent poor perfomance, IAG maintains its guidance for 2019

Banc Sabadell | IAG results in Q119 in line with expectations in EBIT and better in financing post tax profits: Sales: 5.318 Bn€ (+5.9%); EBIT: 135 M€ (-51.8%); post tax profits: 70 M€ (-66%). Sales evolved slightly below expectations (-0.7% vs BS expected) affected by unitary passenger income after currency change which fell -1.4% (vs -1% BS expected). Thus was compensated by unitary non-fuel costs which fell -0.6% at constant exchange rates (vs 0% BS expected). This poor income performance contributes a certain negative trend.

 


Repsol dividend

Repsol: best placed for new sulphur reduction law

Renta 4 | Repsol Downstream investors’ day showed not only the firm’s resilience but also its capacity for future growth. We recall that within its growth target for operational cash flow from 4.6 Bn€ in 2017 to 6.5 Bn€ in 2020 at 50%/b, Downstream cash flow would grow 800 M€: 300 M€ from international margins, 200 M€ from improvements in profitability from greater efficiency and 300 M€ from expansion and new low carbon business preparing for the energy transition.