EPS in red disappoints even
as EBITDA beats
Migros reported a net loss of TRY17m in 3Q12, compared to TRY91m net earnings a year ago. The bottom line is worse than expectations as we had estimated a TRY5m net loss while CNBC-e consensus was a TRY3m net loss. Nevertheless, 3Q12 EBITDA at TRY124m beats consensus and our estimate by 8% and 9%, respectively.
Operating performance beats estimates on stronger margins
3Q12 revenue at TRY1,825m (+13% y-y) was in line with estimates. Discrepancy on the EBITDA level occurred on higher operating leverage effects while opex management was disciplined across the board. While TRY30m FX losses marred the bottom line as expected, higher than expected other expenses and tax drove the bottom line below estimates.
BUY maintained
We maintain our BUY rating for Migros, on the back of growth prospects for organized retailers, and the solid franchise and brand equity of the company. A possible exit of BC Partners from Migros remains a potential strong catalyst. Currency weakness remains the key downside risk.
Migros reported a net loss of TRY17m in 3Q12, compared to TRY91m net earnings a year ago. The bottom line is worse than expectations as we had estimated a TRY5m net loss while CNBC-e consensus was a TRY3m net loss. Nevertheless, 3Q12 EBITDA at TRY124m beats consensus and our estimate by 8% and 9%, respectively.
Operating performance beats estimates on stronger margins
3Q12 revenue at TRY1,825m (+13% y-y) was in line with estimates. Discrepancy on the EBITDA level occurred on higher operating leverage effects while opex management was disciplined across the board. While TRY30m FX losses marred the bottom line as expected, higher than expected other expenses and tax drove the bottom line below estimates.
BUY maintained
We maintain our BUY rating for Migros, on the back of growth prospects for organized retailers, and the solid franchise and brand equity of the company. A possible exit of BC Partners from Migros remains a potential strong catalyst. Currency weakness remains the key downside risk.
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