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Analyses Financières
Analyses
Financières
Getting
the best of its asset base
16/10/2003
Getting
the best of its asset base
•
Weak 2002 results
Sapecís 2002 results were better than expected, following
poor 1H results, but remained unsatisfactory. This is mainly
because the sizeable investments in Spainís electricity
sector did not pay off as expected, but performed rather to
the contrary. In addition, the promising micro-nutrient business
has still to take off in a sustainable way. Finally, the balance
sheet does not make for happy reading in view of the widening
net debt position.
•
Should do (much) better
Against this grey picture, we have identified many sources
that could contribute to profit improvement in 2003 and probably
also 2004. That is, at least, if no problems arise.
•
Demanding valuation?
Over the last four months, the Sapec share has gained almost
50%, which is not bad for a very small cap. However, we need
to take into account the companyís large real estate
portfolio ñ which is not contributing to the current
profit ñ before taking too severe attitude on market
multiples. In fact, we believe that the Sapec share is ready
for a bit of a rest. Our target price is close to the current
share price, and in line with the Fortis recommendation rules.
We therefore are adopting a Reduce rating.
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