Page 23 - TURKRptSep21

20% y/y. Automotive wave continued in Q2 while refiner Tupras made a comeback.
Tupras (TUPRS), by far Turkey’s largest company by turnover, reported a net profit of Turkish lira (TRY) 1.7bn ($198mn) in Q2 2021 after reporting a net loss of TRY760mn in Q2 a year ago.
Erdemir (EREGL), Turkey’s largest steelmaker, reported a jump in 1H profit to $738mn from $134mn a year ago, while Kardemir (KRDMD) reported a net profit of Turkish lira (TRY) 1.42bn ($164mn) versus a net loss of TRY268mn a year ago.
Erdemir’s net sales revenues rose 60% y/y to $1.73bn in 2Q although sales volume remained flat at 2mn tonnes.
Erdemir’s EBITDA per one tonne of sale reached $336 in 2Q. Kardemir’s EBITDA per tonne figure also jumped strongly.
Relatively smaller steelmakers Cemtas Celik (CEMTS), Yukselen Celik (YKSLN) and BMS Celik Hasir (BMSCH) also reported strong financial performances for 2Q thanks to high prices.
In Q1, the profit performances of Erdemir and Kardemir were better compared to 2Q. Erdemir’s net profit margin (net profit/sales) declined to 22% in 2Q from 25% in 1Q but remained above the 10% seen in 2020.
Whether higher prices will continue to materialise in the remainder of 2021 will be watched. In July, global steel prices (USD-denominated) fell on to a path of decline, although they are still significantly higher than the 2020 levels.
Glassmaker Sisecam (SISE) reported a jump in net profit to Turkish lira (TRY) 2.74bn ($323.7mn) in H1 from TRY527mn a year ago.
Turkish Airlines (THYAO) reported a net loss of Turkish lira (TRY) 59mn (€5.8mn) for H1, down from TRY4.3bn a year ago.
Low-cost carrier Pegasus (PGSUS) reported a net loss of €166mn for H1 compared flat with the net loss of €168mn a year ago.
The Borsa Istanbul-listed banks, seen as flagships of the market not too long ago, released their Q2 financials—but interest in the lenders remains rather low. Concerns over data reliability due to the state’s non-stop regulatory forbearance, which has reached unheard of proportions amid the pandemic impacts, and low profitability despite the heavy forbearance, has undermined the banks.
Much of the market treats the Turkish banks as if they are on the way to bankruptcy.
The Turkish banking industry’s return on equity stood at 10.3% at end-June, compared to official inflation of 18.75%. Problem loans were said to make up at least 15% of the loan stock, but the real figure may be much higher.
VTB Capital: “In Q2, the bulk of Akbank’s (AKBNK) net provision costs were related to the impact of FX rates on FX loans, including the Turk Telekom (TTKOM) related exposure.”
Akbank is controlled by Turkey’s Sabanci Holding (SAHOL).
In 2018, Garanti BBVA (GARAN), Akbank and Isbank (ISCTR) took over a 55% stake in Turk Telekom after the former owner of the stake, Otas—a unit of Dubai-based Oger Telecom—failed to keep up payments on a $4.75bn loan;
23 TURKEY Country Report September 2021 www.intellinews.com