8 Ocak 2013 Salı

Tav Havalimanlari Holding (TAV) (TAVHL.IS): High traffic growth continues in 4Q12, reiterate Focus List Buy


INVESTMENT LIST MEMBERSHIP: Pan-Europe Buy List
COVERAGE VIEW: NEUTRAL
News Turkey's largest airport operator, TAV Airports, reported passenger and air traffic data for December, 2012, up 34% yoy, bringing the FY2012 passenger traffic growth (including newly acquired airports) to 36% compared to our expectations of 33.5% growth. The total passenger traffic reached 71.5mn; organic growth was 19%. The Ataturk airport in Istanbul recorded a 21% passenger growth in December (and 19.4% in 4Q) to 45mn passengers, compared to our expectations of 19% growth for the full year, with in particular the high margin international passengers up 25% in December and 24% for the full year (we were expecting 22%).
Analysis While terminal operations represent close to 80% of TAV EBITDA, we estimate that each
1% point of incremental traffic has a €5 mn positive impact on the EBITDA (or 1.8% of the group EBITDA), although the actual number can vary as different airports charge different levels of fee. Going forward, we estimate for 2013 a 15.0% passenger growth across TAV airports (and 13.3% at the Ataturk airport), broadly in line with the company and Turkish Airlines expectations of c.15% passenger growth. Should the passenger growth trend seen in recent months continue into 2013, there could be a moderate upside to estimates.
Implications
Given sustained volumes growth during the recent months, we think this set of data could be positive for the stock and support a good 4Q. TAV remains on our CEEMEA Focus List as a Buy with 12-month price target of TRY15.4, which is based on peer multiples, taking into account both a premium for its higher returns, but also a 15% discount for the legal uncertainty regarding the third Istanbul airport. The main risk islower than expected traffic growth and an early termination to their concession for the Ataturk airport.

G.Sachs

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