TAV Airports (TAVHL TI) - 1Q18 NI undershot on FX losses: Maintain Buy
TAV Airports reported net income of EUR7m in 1Q18, undershooting our estimate of EUR10m and much below the Reserach Turkey consensus of EUR14mn. Weaker-than-expected bottom-line came from higher-than-expected FX losses (EUR19m vs. our estimate EUR14m).
Operationally, 1Q18 EBITDA of EUR97m was broadly in line with our estimate of EUR91m and consensus of EUR99m. The company posted robust operational performance in 1Q18, backed by continuous recovery in the domestic aviation marke and higher contribution of international operations.
Even though we maintain our BUY call as we see decent upside potential thanks to continued recovery in the Turkish aviation market, we believe that the lack of near term catalysts should dilute the appetite on the stock.
TAV Havalimanlari Holding is involved in the businesses related to the construction of terminal buildings, management and operation of terminals or airports. As of Dec 31 2015, Co.'s reportable segments include: terminal operations, which is involved in operating terminal buildings, the car park and the general aviation terminal; catering operations, which manages food and beverage operations of the terminal; duty free operations, which is involved in the sales of duty free goods; ground handling and bus operations, which provides traffic, ramp, flight operation, cargo and all other ground handling services for domestic and international flights; and other, which provides lounge services.
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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