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Turkey: Profit taking on global risk appetite

  • The positive mood of yesterday is likely to soured by the sell-off in global markets
  • 1Q results continue to be impressive for most companies
  • Turkish markets will close on Wednesday noon to be opened on the 17th. 

As we are in the last 1.5 days of trading this week, the positive mood of yesterday is likely to soured by the sell-off in global markets. 1Q results continue to be impressive for most companies. We like strong operational performance on bot Dogus Otomotiv and Aksen Enerji. The thematic investment on commodity related stocks( only steel in Turkey via Eregli and Kardemir) and opening up stories such as airlines, travel etc should continue their momentum throughout this summer.

Turkish markets will close on Wednesday noon to be opened on the 17th. 

Company news:

FROTO: previously announced production halt in Golcuk plant between 19 April and 13 June 2021. Today, the company announced they managed to reduce production downtime by 1-week. The company plans to start production in Golcuk plant by 7 June 2021. In addition, the ongoing chip problem started to impact Ford Trucks business. The company decided to bring forward their annual routine summer shutdown at Eskisehir plant and suspend production between 31 May 2021 to 17 June 2021. The company expects to ramp up production tempo in the following months and remain within the production and sales guidance provided for 2021E.

ALARK: goes ex-dividend today. DPS TL0.138/share. (1.37% dividend yield) 

AKSEN: Aksa Energy strong results in 1Q21, net income beats consensus by 104%. Aksa Enerji posted TL208mn net income in 1Q21, a figure that is much higher than the consensus of TL102mn and our estimate of TL72mn. Stronger than anticipated operational results and lower than expected interest expenses were the main reason behind the strong bottom-line figure. Consolidated revenues increased by 16% y/y to TL2,144mn, beating our estimate by 1%. Turkish revenues came at TL1,783mn, implying 21% y/y growth. Due to a widespread drought in 1Q21 across Turkey and favorable natural gas pricing, Aksa’s natural gas fueled Antalya power plant managed to obtain a CUR of 69%, a level that is much higher than the 1Q20 CUR figure of %32. African revenues were recorded as TL362mn, slightly lower than our estimates. Regarding African operations, effects of TL depreciation should be more visible in 2Q21. Aksa Enerji’s EBITDA increased by 29% y/y to TL492mn in 1Q21, 15% above the consensus estimate of TL427mn. Regionally, Aksa Enerji's adjusted EBITDA from Turkey increased by 65% y/y to TL185mn in 1Q21, again thanks to Turkish electricity market being more favorable in 1Q21 for gas and coal fueled power generators. African division’s EBITDA increased by 15% y/y to TL260mn during the same period. Aksa Enerji’s EBITDA margin increased by 231bps y/y to 23.0%, 277bps higher than our estimate of 20.2% in 1Q21. Net debt increased by 2.4% q/q to TL2.70bn in 1Q21. The company’s net debt / EBITDA ratio declined to 1.64x in 1Q21 from 1.71x in 4Q20. Management will hold a teleconference today at 3 p.m. Istanbul time in order to discuss the results.

DOAS : Better than expected results... Dogus Otomotiv recorded TL407mn net income which is 18% higher than our estimate of TL345mn and 22% higher than consensus estimate of TL332mn in 1Q21. Deviation was mainly due to positive impact of TL101mn higher than expected EBIT and negative impact of TL64mn higher than expected financial expenses. The company recorded TL562mn EBITDA which was 15% higher than our estimate of TL489mn and 20% higher than consensus estimate of TL470mn in 1Q21. In 1Q21, EBITDA margin was 9.1% which is 79bps higher than our estimate of 8.3% and consensus estimate of 8.1%. The company didn’t change its 2021E guidance. The company expects 2021E total motor vehicle (PC&LCV&HCV) market to be 700K units, implying %12 y/y decrease. In our base scenario, we expect total motor vehicle market to increase by 13% y/y to 903K units. The company expects its sales volume excluding Skoda volume as 100K units, compared to our forecast of 101K units. We will get more insight on the 1Q21 results and 2021E outlook during the teleconference which will be held today at 4PM Istanbul time

PGSUS: Worse than expected results… Pegasus posted -€101mn net loss in 1Q21 which is 12% higher than our estimate of -€90mn net loss and parallel to consensus estimate of -€100mn net loss. Deviation was mainly due to negative impact of €10mn higher than expected net financial expenses. The company’s EBITDA was -€5mn in 1Q21. Our estimate for 1Q21 EBITDA was -€10mn and consensus estimate was -€4mn. After 1Q20 results, PGSUS had withdrawn its 2020 guidance and no guidance is given about financials for 2021E with 1Q21 results due to ongoing uncertainties regarding Covid-19 developments. However, PGSUS expects improvement in demand starting from June 2021. PGSUS plans to reach 85% of its 3Q19 ASK in 3Q21E and 70-75% of its 2019 ASK in 2021E. As of 1Q21, fleet size reached 95 aircrafts with 2 net addition in 1Q21. PGSUS year-end fleet size estimate is 91 aircrafts.

KLKIM: New IPO will start trading in BIST on May, 18th with a reference price of TL 14.75

PENTA: New IPO will start trading in BIST on May, 17th with a reference price of TL 32

GWIND /DOHOL: Dohol bght 9.1 mn shares of GWIND at TL 4.70-4.77 band

 Weekly Macro Agenda:

May 11: March Current Account Balance(Consensus -US$3.8bn)

May 11: March Industrial Production(Consensus -0.5% m/m, 14.1% y/y) 


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