Turkish Airlines (THYAO TI) - In-line operations vs. NI miss: Maintain Buy
Turkish Airlines reported a NI of TRY133m in 2Q19, lower than BNPPe of TRY493m and RT estimate of TRY258m. The divergence originated from TRY299m one-off expenses related to the aircraft sales (BNPPe: TRY159m) and higher-than-expected financial expenses. The bottom-line was also boosted by TRY311m deferred tax gain. 2Q19 EBITDA of TRY2.3b came in 6% higher than BNPPe of TRY2.1b but in line with the market estimate of TRY2.3b.
Despite near-term headwinds related to the higher unit costs, we maintain our BUY call on attractive upside potential. The stock trades at 5.4x 2019E EV/EBITDAR, implying an 11% discount to its emerging peers.
Turk Hava Yollari is engaged in the airline industry with the airline flying to 103 destinations, throughout Turkey and internationally. As of the year end, Co. maintains 66 aircrafts with a total seat capacity of 10,672, and leases a A300-200 cargo aircraft. Co. has various services for their customers which include: various ways of checking in and on-line ticket sales.
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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