Information prepared by GVC Gaesco BEKA

Closing price from 04/13/2018


EUSKALTEL On the occasion of the roadshow celebrated, recently, with the company in Barcelona, have revised our estimates. In addition implement the results of 2017 in our model.

In the Residential sector although the incomes will decrease, think that the sangria of clients will be slowed down in fixed broadband. The incomes will suffer at least over the next quarters to the lost credit a significant part of the base of clients (-17.5k to/a). Our new estimates soften the rhythm of capture of the Plan of Expansión until the +4.2k clients in 2018e. However, for the positive side, improve the clients' organic loss in the sector until-6.6k (-1% to/a).

For the side of Business, after years of contraction believe that the sowing will start to give its fruits. Expect that incomes of the sector an are expanded +1.5% to/to with a stable client base with an ARPU in the environment of the 70 EUR/acc. that it will grow in the next few years practically in line with the CPI.

Additionally emphasise that the Plan of Expansión will reach cruising speed this year and the company wait that the incomes with origin in the new areas of expansion represent 5% of the total of the top-line.

In terms of assessment, all these changes also grassroots change of 2017 to 2018 of the DCF (WACC 6.4%, g 0.5%) we allow obtaining a new standard price of 8.5 EUR/acc. (+6.3% vs. 8 EUR/acc., previous) and we maintain our recommendation of Accumulating. To prevailing prices of contribution, offers a potential of the +16.1%.


BANCO SABADELL. Last week, appeared certain rumours in press on possible negotiations for two projects' sale of foreclosed assets valued at 7.5bnEUR:

1) Project Coliseum (5bnEUR); and

2) Project Challenger (2.5bnEUR).

Although the potential buyer is not yet known, the names with which speculates the press are the usual in this type of operations on the market Spanish such as Cerberus, Blackstone, Apollo, Lone Star or Oaktree.

Despite this possible operation, Banco Sabadell tells still with projects in force as:

1) Makalu (2.4bnEUR in unpaid foreclosed assets and credits); and

2) Galerna with 900mEUR in abortive loans.

To it it is necessary to sum the activity of Solvia property Developments with an assets for sale of 600mEUR (mostly land and some promotion to end).

Generally speaking and while awaiting know which are terms of the negotiations the news is positive given that the sale of these assets, for the company, would suppose practically reduce to zero its foreclosed asset exhibition exceeding in a broad way the objective for 2020 of 5bnEUR. With a theoretical assessment of 2.15 EUR/acc., to prevailing prices of contribution, offers a potential of the +23.4% which we we allow reiterating our positive recommendation of Buying.


OHL. After the sale of OHL Grantings and the results of 2017, have proceeded to revise our estimates.

The final price of the sale soared until 2.158mEUR (2.118mEUR net) after carrying out certain reductions. In addition, remembers that OHL promises to tell a net debt with appeal from scratch during, at least, the next five years.

We have estimated an exit of savings bank of 349mEUR before the sale of the division of grantings, affected by problematic contracts, new losses industrial, structure restructuring and costs.

In total expect a positive cash flow of 1.769mEUR including already the sale of the grantings which entails to a net savings bank 2018 of 769mEUR. In our estimates do not include dividend given that it has be approved by the JGA.

However, arrived at a surplus of savings bank of 194mEUR (0.68 EUR/acc.) having as soon as it previously mentioned. When it comes to the operations of the group expect a mg. EBITDA under construction 2018 of 2.7% and losses in the industrial division. Overall, some operational losses of 32mEUR and net of 9mEUR leaned on the goodwill for the sale of OHL Grantings.

With all of this, improve the assessment until 5 EUR/acc. (+31.6% vs. 3.8 EUR/acc., previous) and we modify our recommendation to Accumulate vs. Neutral. We arrived at this assessment giving a vote of confidence to the company, despite the disappointments of last years, not exempt from risk. To prevailing prices of contribution, the value offers a potential of the +24.7%