Prisa returns to lows despite advancing in its business division and the market foresees further falls

Prisa has returned to mark lows of the year. Despite pacifying the company with the entry of Vivendi and culminating its diversification into two new divisions, Education and Media, with the aim of selling the international division of Santillana and reduce the bulky debt, Prisa’s securities closed this Friday at 0.778 euros, repeating the low of early July. Since the beginning of the year lose 15% and add one market capitalization of 551 million euros, compared to a debt at the end of June of 743 million euros.

The market does not anticipate a recovery in value. Diego Morin, from IG, points out that «since the recovery of September 2020 and exceeding the trading euro, the securities have been developing decreasing maximums, forming a downward guideline since January 2021, without finding enough demand to pierce it ». “Despite the improvement harvested in the first half of 2021, I would stay out of value until I get to make your soil,” he explains.

The firm is in a downward spiral despite the fact that it has already refinanced the debt and has sold a good part of its assets. Prisa has gotten rid of its business in Portugal, Media Capital, and Santillana Spain, which has allowed it to reduce debt from more than 1,000 million to the aforementioned 743 million. It has also pacified the company, with the coup of Amber Capital and Telefónica, displacing Banco Santander and Javier Monzon, who held the presidency on behalf of the bank. The group’s shareholders are now rowing in the same direction, with the entry of Vivendi to support the Amber-Telefónica block.

However, this has not resulted in an improvement in the titles. They rose at the end of last year and during the first half, but have fallen again and are at levels unknown since last November, dates before Amber and Telefónica joined forces to take control of the media group.

Uncertainties

Despite this movement, the company continues to Red numbers -56 million in the first semester- and income has been reduced in the first six months of the year up to 306 million euros. Debt has also increased until June over December 2020.

Therefore, there are still many uncertainties in the company that presides Joseph Oughourlian. The plan is to finalize the separation of the two divisions to sell Santillana International, but there remains a difficult process of dividing the accounts of the two subsidiaries and determining how much of the debt each division assumes.

In addition, the future of that Education division is less clear because the recovery of the sector will be slower in the coming years due to the coronavirus, as reflected in a report from Santander in early August. That means that, if it is sold, the price falls, and a very high debt would still be pending to be ‘saved’ only with the media division.