TURKEY METALS & MINING - Recovery continues with a temporary miss
Koza Gold reported net income of TRY191m in 4Q18, slightly lower than our estimate of TRY204m but 28% lower than Research Turkey’s TRY265m. Since the company had already announced gold production figures for 2018, the deviation at the bottom-line came from weaker operational performance on lower-than-expected gold production during the quarter. 4Q18 EBITDA of TRY256m came 22% lower than our estimate of TRY329m due to weaker gold production due to a temporary production halt at Kaymaz mine.
We lowered our TP for Koza Gold by 2% and Koza Metal by 2% on slightly higher cash cost assumptions. We keep our positive stance on Koza Gold as it offers a promising turnaround story, backed by increasing gold production amid rising interest rates and TRY weakness. We view Koza Metal as a value play that provides alternative exposure to Koza Gold. Due to a lack of catalysts other than a valuation discount, we prefer Koza Gold to Koza Metal.
Koza Altin Isletmeleri AS. Koza Altin Isletmeleri AS is a Turkey-based company established to explore and operate gold mines in Turkey. The Company had a gold production of approximately 338,182 ounces in the 12 months of 2012. As at 31 December 2012, it had 53 operating licenses and 406 exploration licenses throughout Turkey in the Aegean and Marmara regions, the Black Sea region and Central and Eastern Anatolia. The Company owns four operating mines: an underground mine at Ovacik, a mine at Mastra & Cukuralan where it utilizes both underground and open pit mining methods, a mine in Cukuralan where it utilizes both underground and open pit mining methods and an open pit mine at Kaymaz.
TEB Investment equity research analysts and strategist team consists of 8 analysts with an average finance sector experience of 15 years and special focus on international investors.
With our 6 equity research analysts we cover 93 companies across 21 sectors, reflecting 80% of the total market capitalization of all BIST companies and 86% of the BIST100 companies. Our strategy team provides in depth top-down and bottom-up market views with insight on FX and bond markets by publishing sectoral and strategic reports both in English and Turkish.
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