Net income below estimates
Tofas reported TRY104m in net income in 3Q13 (+6% y-y, our estimate: TRY118m, CNBC-e consensus: TRY111m). EBITDA at TRY204m (+8% y-y) was above us (TRY184m) and consensus estimates (TRY189m). Despite better-than-expected operating performance, FX losses (TRY28m), higher tax expenses (actual: TRY6m, our estimate: zero), and higher D&A (our estimate: TRY71m, actual: TRY81m) drove the bottom line below our estimate. We assumed zero tax booking due to the recent tax investment incentive the company was granted for its Doblo investment.
Operating performance better than expected
Revenues at TRY1,660m (+8% y-y) were a tad above our TRY1,625m estimate (consensus: TRY1,585m). EBITDA margin remained flat y-y at 12.3% (2Q13: 11.4%), beating our 11.3% estimate. There can be volatility at EBITDA level due to take-or-pay bookings, but we believe 3Q13 results were overall decent, despite the challenges in the domestic market (14% y-y decline in Tofas’ domestic retail volumes).
Tofas reported TRY104m in net income in 3Q13 (+6% y-y, our estimate: TRY118m, CNBC-e consensus: TRY111m). EBITDA at TRY204m (+8% y-y) was above us (TRY184m) and consensus estimates (TRY189m). Despite better-than-expected operating performance, FX losses (TRY28m), higher tax expenses (actual: TRY6m, our estimate: zero), and higher D&A (our estimate: TRY71m, actual: TRY81m) drove the bottom line below our estimate. We assumed zero tax booking due to the recent tax investment incentive the company was granted for its Doblo investment.
Operating performance better than expected
Revenues at TRY1,660m (+8% y-y) were a tad above our TRY1,625m estimate (consensus: TRY1,585m). EBITDA margin remained flat y-y at 12.3% (2Q13: 11.4%), beating our 11.3% estimate. There can be volatility at EBITDA level due to take-or-pay bookings, but we believe 3Q13 results were overall decent, despite the challenges in the domestic market (14% y-y decline in Tofas’ domestic retail volumes).
Defensive, but low leverage to a potential recovery in Europe
Tofas has defensive characteristics thanks to take-or-pay bookings, but its leverage to a recovery in European markets is also low. We expect renewal terms for the next-generation Minicargo to be among the main drivers for the shares.
Analyst meeting today
Tofas will hold an analyst meeting today to discuss 3Q13 results and 2013 expectations. Further details on the newly announced new passenger car investment, dividend plans for 2014 amid the heavy capex programme, and updates on negotiations for next-generation Minicargo investment will be the important items to watch out for.
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