Hellenic Petroleum - Low dependency on Russian crude

Hellenic Petroleum, a leading oil refiner in Greece, is making progress in its Vision 2025 strategy by building a 0.3GW renewable energy portfolio as of Q122. The company reported Q421 adjusted EBITDA of €138m, up 80% from Q420 (€77m), supported by a recovery in the refining sector. We expect Hellenic to continue to benefit from favourable refining margins and higher oil demand in Q122 and note that margins increased as an immediate reaction to Russia’s invasion of Ukraine. However, as natural gas and oil prices have surged, we expect a negative impact on cash flow due to increased working capital (estimated at a c €300m outflow). Due to the complexity of factors and the uncertain environment, we do not adjust our post-FY22 refining margin estimates at this stage. Hellenic could potentially provide a dividend yield of c 10% for FY22, including a special dividend once the sale of DEPA Infrastructure completes.