Dogus Otomotiv posted TL1,766mn net income which is 15% higher than our estimate of TL1,538mn and 13% higher than consensus estimate of TL1,563mn in 2Q22. Despite higher than expected tax expenses and lower than expected other operating income, higher than expected operating profit led to higher than expected net income in 2Q22.
The company recorded TL2,157mn EBITDA which was 14% higher than our estimate of TL1,884mn and 14% higher than the consensus estimates of TL1,900mn in 2Q22. In 2Q22, EBITDA margin was 18.6% which is 154bps higher than our estimates of 17.0% (Consensus: 17.2%).
Based on our 2022E estimates, DOAS is currently trading at 3.6x EV/EBITDA, implying 36% discount to its 5-yr historic average.
Total wholesale volume including Skoda declined by 26% y/y to 29.0K units in 2Q22, 5% lower than retail sales volume indicated by ADA figures. Total wholesale volume excluding Skoda declined by 12% y/y to 22.2K, 5% lower than retail sales volume indicated by ADA figures. Commercial vehicle (CV) price in terms of EUR was up by 45% y/y to EUR41.8K in 2Q22 which was 60% higher than our estimate, whereas Passenger Car (PC) price in terms of EUR was up by 24% y/y which was 5% higher than our estimate. The company’s light vehicle (P. Cars and LCV) market share decreased by 440bps y/y and increased by 69bps q/q to 14.5% in 2Q22. PC revenues increased by 82% y/y while CV revenues declined by 31% y/y in 2Q22. Dogus Otomotiv’s revenue was up by 57% y/y to TL11,614, which is 5% higher than our estimate of TL11,064mn (Consensus: TL11,015mn) in 2Q22.
EBITDA was up by 189% y/y. Gross margin was up by 904bps y/y to 21.8% in 2Q22 which was 124bps higher than our estimate of 20.6%. Opex/net sales ratio of 3.8% was 26bps lower than our estimate of 4.1%.
DOAS management revised down its 2022E sales volume excluding Skoda guidance by 6%. The company maintained its 2022E total motor vehicle (PC&LCV&HCV) market guidance at 790K units, implying 2% y/y increase (ATA Est.: 791K). DOAS revised down its 2022E sales volume excluding Skoda guidance to 85K from 90K, implying 10% y/y decline (ATA Est.: 89K). The company revised up its CAPEX guidance to TL430mn from TL399mn for 2022E (ATA Est.: TL555mn).
The company’s net debt increased to TL305mn in 2Q22 from TL77mn in 1Q22. NWC need increased by TL677mn q/q in 2Q22. Receivable days increased by 1-day q/q, payable days increased by 5-days q/q whereas inventory days declined by 8-days q/q in 2Q22. As a result, cash conversion cycle declined by 11-days q/q in 2Q22.
Dogus Otomotiv’s net FX long position declined to TL1,420mn in 2Q22 from TL2,748mn in 1Q22.
DOAS will hold a teleconference today at 13:30 IST time.