TURKEY METALS & MINING
Koza Gold reported net income of TRY484m in 3Q18, surpassing our estimate of TRY412m. The deviation at the bottom-line came from higher-than-expected financial income during the quarter. 3Q18 EBITDA of TRY271m came 21% lower than our estimate of TRY345m due to weaker average sales prices and a temporary production halt at Kaymaz mine.
Koza Metal reported net income of TRY193m in 3Q18, above our estimate of TRY167m. The deviation at the bottom-line came from higher-than-expected profit contribution from Koza Gold on better financial income. 3Q18 EBITDA of TRY266m came 23% lower than our estimate of TRY346m due to slower-than-expected EBITDA generation at Koza Gold.
We raise our TP for Koza Gold by 23.1% and Koza Metal by 22.4%, on updated macro forecasts. 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 over 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.
Koza Anadolu Metal Madencilik Isletmeleri AS (Koza), formerly known as Koza Davetiye Magaza Isletmeleri ve Ihracat AS, is active in the commercial printing sector. During the fiscal year ended 2008, it also added copper, lead and zinc mining to its activities. Its printing products include invitation cards and stationery products, such as postcards, notebooks, calendars, letterheads, envelopes, business cards and personal organizers. Besides manufacturing and marketing of printing products, Koza is involved in the trade of printing equipment. Its subsidiaries include Koza Altin Isletmeleri A.S., Bugun Televizyon Radyo ve Prdk. A.S., Yasam Haber Ajansi Ltd. Sti., Keyland Turizm Seyh. ve Tic. A.S. and ATP Havacilik Ticaret A.S.
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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