Relief over Germany’s election results boosts stock markets. A higher price target and a buy recommendation give KBC a boost. Ekopak combines a decline in turnover with a higher operating profit.
The European stock markets are moving in the right direction, gaining an average of 0.4 percent around 12.30 pm. In Germany, the Social Democrats are the big winners of the elections, but the chances of a left-wing government taking office are slim. That brings relief to investors.
Energy values contribute to the rise in the indices. The lowest price of oil and gas pushes the oil price in London to the highest level in three years. Oil companies such as Royal Dutch Shell
from TotalEnergies
win more than 3 percent.
The concerns about China have not disappeared, however. Evergrande’s fate remains uncertain and an electricity crisis has erupted in the country. Factories have to produce and families fall here and there without power. That raises fears of a slowdown in growth.
Euronext Brussels keeps its head straight with 1 percent gain (up to 4,179 points) for the Bel20
. The driving forces are mainly KBC and Ageas
. The latter is recovering from a difficult summer. The share price has been under pressure since June as investors commented on the impact of stricter regulation and poor stock markets in China on the profitability of Ageas’s joint venture in the People’s Republic. Ageas wins 1.85 percent to 40.69 euros.
Czech rent and Ireland
Top in the index is KBC Group
with a 4.3 percent profit to 76.06 euros. Kepler Cheuvreux has activated profit forecasts for the bancassurer for the next two years. For 2022, the expectation for earnings per share (EPS) will increase by 13 percent, for 2023 by 22 percent. The increase raises higher net interest income, higher expense income and lower risk costs. Read: fewer problems with the sale of Ireland and therefore lower costs for it.
The analyst had expected the national bank the future future rise of the strong global economy and higher. He expects another 50 basis point hike this month and sees more increases in the months ahead.
He also thinks that KBC will announce a share buyback program of 0.9 billion euros in February. He also sees the sale of the Irish activities as a positive catalyst for the share. It will increase the capital ratio by about 70 basis points, he estimates, allowing for another round of share buybacks in 2023.
Maliestraat
The social unrest in the garages of D’Ieteren
leads to an integral intervention: two of the four Brussels dealers are closed. This includes the workshop at the holding’s headquarters on Maliestraat in Ixelles. According to D’Ieteren, the closure is a result of the rejection of an austerity plan by the. The two dealers that are closing were structurally loss-making. 103 jobs lost.
Since the impact, in the whole of D’Ieteren’s activities, remains limited and investors see an improvement in profitability only, but the share is 0.9 higher to 136.90 euros.
WaaS
The half-year results of Ekopak
– the first since the IPO at the end of March – were a ‘mixed bag’. Sales fell 16.1 percent, but gross operating profit shot up 84 percent. This remarkable one has everything to do with the combination of water as a service (WaaS), the innovative business model of the water treatment company. In the first half of the year, WaaS revenue grew by a quarter, ten to the detriment of non-WaaS revenue. However, WaaS delivers much higher margins, enabling greatly improved profitability.
Analyst Olivier Vandewoude of KBC Securities is positive: ‘The half-year results may seem a bit disappointing at first glance, but the underlying dynamics are certainly positive. We welcome the accelerated transition to WaaS and are impressed by the continued strong EBITDA margin performance.” He maintains his ‘buy more’ advice and price target of 18.50 euros.
The share of Ekopak is 1.6 percent higher to 17.52 euros.
There is also a positive reaction to the half-year figures of Fountain
. The Walloon provider of hot drinks service to SMEs presents a promising report for the first half of the year. Turnover rose 14.1 percent compared to the first half of 2020, partly due to the acquisition of new customers. Turnover remains almost 20 percent lower than in 2019, which Fountain attributes to the extensive teleworking. Higher exercise of the company for 1.1 million euros in the red.
Fountain won 1.2 percent to 0.85 euros on the first record.