EUR 103.50 For Business Accounts Only

TAVHL 4Q18 Earnings Review... Bottom-line better, EBITDA worse

TAVHL – BOTTOM LINE BETTER, EBITDA WORSE .. Posted a net profit of EUR50mn in 4Q18, better than market consensus (EUR25mn) and our expectation (EUR44mn). Adjusted EBITDA came in at EUR88mn in 4Q18, worse than market consensus of EUR107mn and our expectation of EUR122mn. Main deviations from our expectations were i) an accounting change in Antalya Airport to include no goodwill leading to a net loss of EUR2.1mn from this asset in 4Q18 vs. our expectation of a net profit of EUR6.3mn, ii) negative contribution of ATU, TGS and Medinah Airports totalling EUR2.0mn while we were expecting a positive contribution of EUR4.7mn, iii) EUR10mn of impairment reversal for Bodrum Airport which had positive impact on earnings and iv) lower than expected net financial expenses in 4Q18. BUY Maintained. Our ex-dividend target price currently stands at TL37.00, pointing to a 12-month total return of 38%. TAV management will propose to distribute a gross DPS of TL2.0854, pointing to a gross yield of 7.4%. Ex-date is planned to be March 20th