BGC Partners - Adel Kalemcilik <ADEL TI> reported a net profit of TL3.3mn in 1Q19, lower (BGC: TL22.4mn, no consensus available)
1Qs and 2Qs are seasonally strongest quarters for Adel where revenues and EBITDA are the highest, while 3Q is weaker and 4Q is the weakest. In a seasonally strong quarter, Adel failed to show a good performance. Revenues of TL108.6mn in 1Q19 are down by 18.9%, y/y (after 19.5% growth in 2018), despite higher currency rates (majority of the stationery products in the market are imported), vs. our TL150mn estimate. Although EBITDA margin of 29.5% in 1Q19 is only slightly lower than our 31% estimate, due to weak revenues Adel posted TL32.0mn EBITDA in the quarter, well below our TL46.5mn estimate. Soaring interest rates and sizeable working capital financing during the year pushed financial expenses up, as expected. All in all, the company reported a weak TL3.3mn net income in the quarter vs. our estimate of TL22.4mn and 1Q18’s TL19.5mn. As a seasonal issue, working capital requirements soared by TL47mn to TL259mn in 1Q19, pushing net debt up to TL223mn in 1Q19 from TL161mn at 2018-end. Note that working capital requirements and net debt should decline significantly in 4Q19 (4Qs are collection periods). Adel has a small TL5.2mn long FX position as of 1Q19 (2018: TL9.4mn, 2017: TL18.8mn long FX position), We think that 1Q19 results are negative. (Matriks, BGC Partners)Adel Kalemcilik Ticaret ve Sanayi AS (Adel Kalemcilik) is a Turkey-based company engaged in the production of stationary supplies, including wood-cased black-lead, color and copying pencils, ballpoint pens, fiber pens, oil pastels, watercolors and erasers. The Company's product range also includes mechanical pencils, foil covered black-lead pencils, offset printed black-lead pencils, fiber pens, glue sticks, textile marking pencils, modeling clay, wax crayons and finger paint. It has two production facilities in Istanbul and Giresun. Adel Kalemcilik was established as a result of the partnership between Anadolu Endustri Holding AS and German Faber-Castell AG. The Company offers Adel, Faber Castell, Graf von Faber-Castell, Eberhard Faber and Atlas branded products. It exports its products to 54 countries worldwide. It has investments in Anelsan Anadolu Elektronik Sanayi ve Ticaret A.S. and Ulku Kirtasiye Tic. ve San. A.S.
BGC has been one of the major market players in Turkish OTC debt, FX and swaps markets since 1998.
We started offering corporate finance and investment banking services to our clients in 2013. We offer a complete range of financial services to help our clients achieve their goals. Our main areas of activity within investment banking are as follows:
- Mergers & Acquisitions
- Equity Capital Markets
- Debt Finance & Advisory
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