EUR 103.46 For Business Accounts Only

BGC Partners: Bizim Toptan 4Q18 - Slightly better

Bizim Toptan reported 4Q18 net profit of TL6.9mn (vs. net income of TL0.2mn in 4Q17), slightly higher than expected… The reported net profit is 16% higher than our estimate (TL6.0mn) and 19% higher than consensus (TL5.8mn), mainly because of higher main category sales than we predicted which had a positive mix effect on margins and the effective tax rate was slightly lower than we forecast. Although 4Q18 EBITDA margin at 4.9% appears extremely high at first glance leading to 40-50% beat on expectations, we note that the gains here are partially offset with the net expenses on purchases on credit recorded under ‘other operating income/expenses’, just below the operating profit line. The practice of factoring receivables and lending to Yildiz Holding continued in 4Q18. The outstanding non-trade receivables from Yildiz was TL55mn in 4Q18, down from TL130mn in 3Q18 and TL2.5mn at the end of 2017. The net interest expense figure for 4Q18 was also slightly higher than we predicted. Net cash was TL258mn at the end of 2018, vs. TL162mn in both 3Q18 and 2017-end.