6 Ağustos 2013 Salı

TOFAS OTOMOBIL - 2Q13: Worse than expected: HOLD

Operating performance and bottom line below expectations
In 2Q13, Tofas reported TRY109m net income (-12% y-y, BNPP: TRY134m, CNBC-e: TRY127m). EBITDA at TRY203m (-11% y-y) missed estimates (BNPP: TRY242m, consensus: TRY239m). Sharp decline in D&A (1Q13: TRY90m, 2Q13: TRY71m) partly compensated for the operating weakness.

Decline in revenues y-y, below estimates
In 2Q13, revenues declined 5% y-y to TRY1,778m (our estimate: TRY1,892m, consensus: TRY1,954m). Domestic revenues declined 3% y-y, and exports declined 6% y-y. Despite the cost cutting programs, OPEX/revenue ratio was up 0.5pp y-y to 5.7% due to diseconomies of scale.

Analyst meeting today
In 2Q13, Tofas recovered some market share vs. 1Q13; 2Q13 results hint this was at the expense of margins. The risk on FY13/14 EBITDA estimates is if Tofas focuses on gross margin and becomes more aggressive on pricing amid declining D&A. Moreover, declining D&A hints to us that take-or-pay agreements for Linea might have ended earlier than we assumed (YE13) (TBC). Despite dividend payments (TRY480m), adjusted net cash increased from TRY671m in Mar-13 to TRY845m in Jun-13 due to a decline in A/R days and increase in payable days. Tofas will hold an analyst meeting today. Market guidance, update on new passenger car projects and Minicargo renewal are critical items we would watch for.

 
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