BGC Partners: ARCLK 1Q19 Earnings Review - bottom line slightly better, operationally broadly in line
Arcelik reported 1Q19 net profit of TL225mn (+27% y/y), slightly higher than projected due to non-recurring currency/hedging gains, operationally broadly in line... The reported net profit is 18% higher than consensus and 23% higher than our expectation. Arcelik’s EBITDA margin at 9.8% reflects the IFRS 16 impact, which the company states to be around +100bps. Excluding the IFRS 16 impact, we calculate that the reported EBITDA is 2% lower than consensus and 8% lower than our estimate. On the other hand, the headline net profit is higher than expectations thanks to higher than expected net foreign currency and derivative gains that went through the P&L amounting to LT170mn. The management indicated that around 2/3rds of that total can be viewed as non-recurring as the company held a long fx position at the end of 1Q19 due to the upcoming US$75mn payment for the acquisition of Singer in Bangladesh and the company made derivative gains in the swap market in 1Q19. We find the results overall neutral but will be going through the numbers in more detail, while the management’s new 2019 guidance indicates a slight upward bias compared to the previous guidance.Arcelik is engaged in the commercial and industrial activities in respect of the production, sales and marketing, customer services after sales, exportation and importation of consumer durable goods and consumer electronics. Co. has two segments: white goods reportable segment, which comprises washing machines, dryers, dish washers, refrigerators, ovens, cookers and the services provided for these products; and the consumer goods reportable segment, which comprises televisions primarily with flat screens, computers, cash registers, other electronic devices and the services provided to consumers for these products.
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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