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dividends per share with a dividend yield of 5.0% through 2018 net income, according to Seker Invest.
“Ford Otosan’s cost + plus type agreements, which are also denominated in Euro, help to limit the foreign exchange risk that the Company is exposed to. Ford Otosan’s foreign exchange risk stems from imported cars to the extent that TRY depreciation might not be fully reflected in sales prices,” Seker added.
Seker appreciated Ford Otosan’s business structure, which is settled on exports, and its profit orientation on the domestic market.
Although the Istanbul-based brokerage takes an optimistic approach towards the business structure of Ford Otosan, it considers the company’s laudable performance already priced in.
Yet growth in the business (organic growth + partnership with VW), being a regular dividend payer and having a natural FX hedge lead Seker to think that Ford Otosan should feature in long-term portfolios to mitigate the potentially negative effects of Turkey’s political and economic fluctuations.
Ford Otosan’s 20.5% stake was listed on the Borsa Istanbul with free-float shares equivalent to 41% of the company held by foreigners as of January, according to Seker.
Ford Otosan managed to up its profit by 28% y/y to TRY454mn in Q3 (market expectation: TRY431mn).
● Tofas
Global carmaker Fiat holds a 37.86% stake in Tofas (TOASO), established in 1968, while the Turkish conglomerate Koc Holding owns 37.6% of the company.
Tofas’ 24.6% stake was listed on the Borsa Istanbul while free-float shares amounting to 38% in the company were held by foreigners as of January.
Tofas is a steady dividend payer; it has been steadily distributing dividends since FY2005.
Tofas hoped to sell 70,000-75,000 units on the domestic market in 2019 while its exports forecast was for 200,000-210,000 shipped units.
Tofas endured a 20% y/y decline in exports to 194,107 units in 2019 while Tofas’ domestic light commercial vehicle (LCV) sales rose by 8% y/y to 78,692.
Tofas’ weak export result “does not affect export cashflows due to take-or-pay arrangements”.
9.2.3 Transport corporates
● Turkish Airlines
Turkish Airlines said on December 31 that it agreed with Boeing in compensation for grounded and non-delivery Boeing 737 MAX aircraft.
The airline did not specify the size of the payment but local daily Hurriyet reported it was worth $225mn.
Number of passengers declined by 1% y/y to 74.3mn in 2019 from 75.1mn in 2018. Domestic passenger tally dropped nearly 8% to 30.4mn in 2019
69 TURKEY Country Report OUTLOOK 2020 www.intellinews.com