Turkey - TKFEN Analyst Meeting Notes
We participated to the analyst meeting held by Tekfen Holding. Main highlights are as follows.• It is shared that the worst scenario is over after the losses experienced on the contracting segment in the last two quarters. Due to project-based changes and external factors (weather conditions), losses were recorded in the ongoing projects.
• There are developments in gas transportation and pipeline contracting works and that new projects can be acquired in the future.
• In the last one-year period, the Company bid for approximately USD 20 billion of new work of much have not been clarified yet.
• Tekfen plans to focus on sustainable growth by focusing on more profitable projects instead of large projects on the contracting side in the upcoming period.
• Russia has a serious potential after many companies have withdrawn from the market. Due to the uncertainty in Russia, Tekfen may not take aggressive steps in this market for the time being.
• The Company has a USD 1.41 billion backlog as of the end of March on the contracting side. Focused markets: Qatar, Saudi Arabia and Iraq.
• There was not much investment in manufacturing and engineering segments in the previous period. Investments in these segments may be accelerated in the coming period.
• Fertilizer exports were prohibited due to government policies. While the high course of fertilizer prices decreased the demand in the domestic market, the export ban had a negative impact on operational profitability. As of May 1, exports are allowed with a quota (30% of the capacity), thus stronger results can be seen in the fertilizer segment compared to the previous quarter.
• Strategic partnerships can be considered in the fertilizer segment with the aim of growing in the foreign markets.
• Tekfen has a consolidated net cash position of USD45 million as of the end of 1Q22. It was stated that the decision not to repurchase is for the purpose of keeping it safe for use in a possible turbulent period.
• Tekfen is expected to announce its second quarter results in mid-August.
• According to the announcement shared on the Public Disclosure Platform, Demet Turhan applied to MKK for the sale of 1,799,444.96 TKFEN shares.
Tekfen Holding conducts its operations in four main business segments: Contracting, Agriculture, Real Estate and Other operations. Contracting group focuses on construction of petroleum and gas facilities, land and sea terminals, offshore platforms and tank farms. Agricultural group has operations in chemical fertilizer, ground and vegetable grain, production, distribution and trade of seedling and sapling. Real estate group operates in designing, constructing, renting, and sale of real estates such as residents, offices, shopping centers and hotels. Operations of other segment comprise of light-pulp trading, cotton yarn production and trading, insurance services and holding operations.
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