Park Elektrik - 1Q13 results

·         Park Elektrik has disclosed a net profit of TRY 14mn in 1Q13, down by 27.8% QoQ and by 34.6% YoY from TRY 22mn in 1Q12, below our estimate of TRY 24mn and market consensus of TRY 25mn. The difference between our forecast and the realization stemmed mainly from weak operational profitability (especially the lower top-line).

 

·         EBITDA decreased by 57.7% YoY and 43.2% QoQ to TRY 21mn in 1Q13 due to decreased net sales revenue and also the decline in depreciation expenses (TRY 7.9mn in 1Q13, vs TRY 23.1mn in 1Q12). The 1Q13 EBITDA is below our TRY 46mn estimate, and the market consensus of TRY 41mn. Margins were negatively affected by decreasing copper prices and rising additional costs of the transition from underground to open-pit mining in Q1.

 

·         We have lowered our average copper price assumption to USD 7,500 in 2013 from US$ 8.000. And we kept our coopper price assumption of USD 7.500 for 2014 and onwards. As a result, we are revising our price target for Park Elektrik from TRY 8.20/share to TRY 7.90/share, its currently trades at TRY 6.66/share. Hence, our target value represents 18% upside potential. Therefore, we maintain our Outperform recommendation for the company.

 

 

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