Earnings Review
20.Aug.14
Turk Hava Yolları
Outperform
Stronger than expected operating performance…
(maintained)
Stake (%)
49.1%
50.9%
Share Price
USD
TRY
Upside Potential
Price Data (TRY)
BIST-100
Share Price
Absolute
Relativ e
Current
2.98
6.44
Target
4.04
8.75
36%
18.07.14
16.05.14
19.08.13
1M
82,315
6.63
-3%
1%
3M
75,009
6.89
-7%
-12%
12M
72,383
8.40
-23%
-30%
Price Chart (TRY)
10.0
1.5
1.0
5.0
0.5
Price (TRY)
2Q14
2Q13
YoY chg
1Q14
Revenues
6,139
4,611
33%
5,128
20%
11,266
8,199
Gross profit
1,223
1,032
18%
509
140%
1,738
1,470
18%
438
447
-2%
-226
-294%
212
363
-42%
EBIT
QoQ chg
2014/6M 2013/6M
YoY chg
37%
EBITDA
831
737
13%
157
429%
988
945
5%
Net Fin. Inc
-127
-234
-46%
-130
-2%
-256
-230
11%
Net profit
398
144
177%
-226
-276%
172
121
42%
Net debt
Key metrics
10,741
2Q14
8,205
2Q13
31%
YoY chg
10,927
1Q14
-2%
QoQ chg
Gross margin
19.9%
22.4%
-2.46
9.9%
9.99
15.4%
17.9%
-2.51
EBITDA margin
13.5%
16.0%
-2.45
3.1%
10.47
8.8%
11.5%
-2.76
Net margin
6.5%
3.1%
3.37
-4.4%
10.90
1.5%
1.5%
0.05
Source: Company
10,741
8,205
2014/6M 2013/6M
31%
YoY chg
Kenan Turan
[email protected]
Tel: 90 212 334 9858
J-14
A-14
J-14
A-14
Relative to BI ST (RHS)
All in all; Turk Hava Yolları continued its strong top-line growth and posted better than
estimated operating performance in 2Q14. Although, pax growth seems to stay behind
the management target for 2014, easing contraction in yields signals a better outlook for
the coming quarters.
Key financials
(TRYmn)
M-14
M-14
J-14
F-14
0.0
D-13
0.0
N-13
EBITDA came above estimates… Turk Hava Yolları reported TRY831mn EBITDA for
2Q14, down 13% y/y, above our estimate (TRY635mn) and Cnbc-e consensus
(TRY730mn). EBITDA margin came as 13.5% for the quarter (3.1% in 1Q14), denoting a
245 bps decrease compared to same period of last year due to contracting in average
yields (in USD terms) and higher wet lease, fuel and non-fuel expenses. Especially
intense new destination addition for the last 12 months and seat capacity expansion
(17% y/y in 2Q14) pressured the margins for the quarter. TRY1,065mn EBITDAR also
came above our estimates; denoting 17.5% EBITDAR margin for 2Q14 (19.4% in 2Q13).
Ownership
Priv atization Administration
Free Float
S-13
Top-line growth is still quite strong… Turk Hava Yolları reported TRY6.1bn revenues
in 2Q14 on the back of strong passenger growth and TRY depreciation, broadly in line
with our estimate (TRY6.0bn) and Cnbc-e consensus (TRY5.98bn). Yields continued to
decline in $ terms (-2.5% y/y) while depreciation of TRY contributed to top-line growth.
For 2Q14, revenues from passengers were up 32% y/y while cargo revenues grew by
28% y/y (contributing only 9% of consolidated top-line).
19.08.14
Airlines
THYAO TI
THYAO.IS
19,628
8,887
50%
1,380
119.5
79,276
O-13
Pax growth is behind the guidance… Turk Hava Yolları’s passenger growth slowed to
14% y/y in 2Q14 from 20% y/y in 1Q14. Accordingly the Company carried 26.2mn
passengers in 1H14, up 16.8% y/y (+20% y/y in domestic and +14.7% y/y in international
passengers), staying behind the official target of 23% pax growth in 2014 (59.5mn
passengers for 2014). Transfer passengers (represented 25% of total pax in 1H14 and
grew by 8% y/y for the same period) contributed to pax growth significantly. However, the
load factor was down by 105 bps y/y in 2Q14 (-49 bps y/y in domestic flights;-10 y/y bps
in international flights) amid 10% y/y and 17% y/y increases in fleet portfolio and seat
capacity for the same period, respectively.
Trading Data
Sector
Bloomberg
Reuters
EV (TRYmn)
Mkt cap (TRYmn)
Free float (%)
No. of shares (mn)
1-Mnth Av e. Daily Vol. (TRYmn)
BIST-100
A-13
Bottom-line exceeded estimates on strong operating performance... Turk Hava
Yolları reported TRY398mn, up 177% compared to same period of last year, above our
estimate (TRY219mn) and Cnbc-e consensus (TRY233mn). Revenues came almost in
line with the estimates while outpaced expectations on stronger margins. Higher net profit
of subsidiaries and low effective tax rate contributed to bottom-line for 2Q14
Yatırım Finansman Securities
Nispetiye Caddesi
Akmerkez
Tel: +90 (212) 317 69 00
E-3 Blok Kat:4
Fax: +90 (212) 317 69 32
Etiler / İstanbul 34337
Bloomberg: YATF
TURKEY
Emre Birkan
www.yf.com.tr
Executive Vice President
[email protected]
+90 (212) 334 98 40-41
Cenk Erdal
Head of Sales
[email protected]
+90 (212) 334 98 45-46
Müjde Erdoğan Birdal
Director of Sales
[email protected]
+90 (212) 334 98 42-43
Gülçin Sepken Aygün
Director of Trading
[email protected]
+90 (212) 334 98 51-52
Nida Aydın
Associate
[email protected]
+90 (212) 334 98 55-56
Mehmet Ali Sukuşu
Settlement
[email protected]
+90 (212) 317 68 42
Zümrüt Can Ambarcı
Head of Equity Research, Banks
[email protected]
+90 (212) 334 98 35
Kenan Turan
Conglomerates, Retail, Agriculture
[email protected]
+90 (212) 334 98 58
Gülçe Deniz
Steel & Mining, REIT, Cement
[email protected]
+90 (212) 334 98 36
Alper Üstünışık
Glass, Automotive, Consumer Durables
[email protected]
+90 (212) 334 98 64
Ahmet Emre Kılınç
Banks
[email protected]
+90 (212) 334 98 38
Özge Özcan
Associate
[email protected]
+90 (212) 334 98 39
Institutional Sales
Equity Research
Macroeconomic Research
Levent Durusoy
Chief Economist
[email protected]
+90 (212) 334 98 33
Ecem Özdemir
Associate
[email protected]
+90 (212) 334 98 89
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Turk Hava Yolları