Hellenic Petroleum - Strong Q1 results

Hellenic Petroleum reported Q1 adjusted EBITDA of €99m, a 54% increase year-on-year and c 20% ahead of consensus (€82m; based on four analysts). This was driven by strong benchmark refining margins and Greek market recovery (fuel demand was up 16% y-o-y). It was partially offset by higher energy and CO2 costs and an approximate two-month planned outage at the Elefsina refinery. As a result of the outage, net production was 2,798k metric tons (MT), down 16% y-o-y; however, this was partially offset by increased trading, with sales volumes down 3% at 3,292k MT. Reported EBITDA was €501m due to inventory gains of €267m and a temporary IFRS gain on increased CO2 prices, both of which should reverse in the coming quarters. Given the potentially large fluctuations in results quarter-on-quarter, we maintain our previous valuation of €7.48/share, which is derived from a blend of DCF, EV/EBITDA and P/E.