Earnings Report /
Turkey

TAV Airports Holding: 3Q22 review – Better than expected results

  • TAV Holding posted EUR98mn net income in 3Q22, higher than our estimate of EUR72mn and consensus of EUR76mn net income.

  • The company reported EUR138mn EBITDA, 4% higher than our estimate of EUR132mn and consensus estimate of EUR132mn.

  • After 3Q22 results the company management revised up its EBITDA guidance

Mustafa Bayram
Mustafa Bayram

Equity Research Analyst

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ATA Invest
31 October 2022
Published byATA Invest

TAV Holding posted EUR98mn net income in 3Q22, higher than our estimate of EUR72mn and consensus of EUR76mn net income. Deviation was mainly due to EUR20mn lower than expected tax expenses and higher than expected EBITDA.

The company reported EUR138mn EBITDA, 4% higher than our estimate of EUR132mn and consensus estimate of EUR132mn.

According to the CEO Kaptan’s statement, Almaty’s cargo aircraft stopovers doubled in 9M22 compared to 9M19, partially due to geopolitical events and partially due to increased operational efficiency. The company also had a major turnaround in lounge and catering services and significant growth in duty free and IT services. Moreover, their luxury stores in Istanbul Grand Airport have benefitted from dazzling passenger growth. As the summer season ends, the company expect demand for travel to stay intact during the winter season as well. In the third quarter, the company submitted a bid to operate and develop Lagos Airport in Nigeria for 20 years. As the bidder preferred to proceed to the negotiation phase of the tender, their goal will be to position TAV in a place where the potential rewards far outweigh the potential risks. Nigerian economy and favorable demographics offer attractive growth prospects for diligent investors.

Revenues increased by 71% y/y to EUR341mn in 3Q22. Total PAX was up by 26% y/y in 3Q22 to 30.3mn from 24.1mn in 3Q21. International PAX increased by 42% y/y in 3Q22 to 22.1mn from 15.5mn in 3Q21. Domestic PAX decreased by 4% y/y to 8.2mn in 3Q22 from 8.6mn in 3Q21. 

After 3Q22 results the company management revised up its EBITDA guidance due to upward revision to its revenue guidance supported by Almaty operations and service companies. The management revised up its revenue guidance to EUR970-1010mn from EUR900-940mn for 2022E (ATA Est.: EUR937.0mn). The company management revised up  its EBITDA guidance to EUR272-313 from EUR252-291mn for 2022E (ATA Est.: EUR302.3mn). Management maintained its EBITDA margin guidance at 28-31%. Management maintained its PAX guidance at 71-76mn for 2022E (ATA Est.: 74.0mn). The company revised up its net income guidance to EUR75-105mn from “>EUR50mn net income for 2022E (ATA Est: EUR101.9mn).

Net debt decreased q/q to EUR1,608mn in 3Q22 from EUR1,645mn in 2Q22. The main reason behind decrease in net debt is strong EBITDA generation.