Morning Note: 19/08/13; PMCR

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Index PX: 982 points (up 1.1% d/d); volume: CZK 534m (USD 28m)

 

Market comment

The PSE added 1.1% on Friday, boosted by financial stocks. Erste Group climbed to this year’s high, finishing at CZK 691.6 (+3.7%). Komercni banka grew only slightly to CZK 4,215 (+0.1%) and VIG gained 2.4% (CZK 1,086). Telefonica CR briefly fell below CZK on a lowered target price by KBC to CZK 209 but partially recovered and closed at CZK 291.8 (-1.8%). Pegas temporarily shut down its production line in Egypt due to an escalated political situation and the reopening will depend on further developments in that country. The stock declined by 2.5% (CZK 561). Electricity prices slightly grew but despite that CEZ did not maintain CZK 450, closing at CZK 445.5 (-0.4%).

 

PM ČR: Neutral (Analytik: Milan Vanicek)

Philip Morris CR (PMCR) is expected to announce its half-year unconsolidated results (IFRS) tomorrow.  We expect non-consolidated sales down 2.0% y/y, mainly due to a decline in the CR (exp. -7.6% y/y). The trend of positive contribution of other exports should continue. However, other exports generate relatively low margins, which should burden EBITDA margin, expected to be down 2.2pps at 25.1%, with EBIDTA reaching CZK 1.5bn (-9.7% y/y). The EPS should reach CZK 754 (-11.4%). If our projections are met, the earnings report could be disappointing for a part of the market since higher dividend potential might be expected. We project a full-year decrease in EBITDA of 5.1% and a dividend of CZK 840/share. 

 

IFRS uncons. (CZK m )	E1H13	1H12	y/y
Sales	5,961	6,081	-2.0%
EBITDA	1,495	1,656	-9.7%
EBITDA margin	25.1%	27.2%	-2.2pps
EBIT	1,271	1,439	-11.7%
EBIT margin	21.3%	23.7%	-2.3pps
Net income	1,035	1,169	-11.4%
EPS (CZK)	754	852	-11.4%

Source: PMČR, J&T Banka