Report
Research Team

Focus: Turkey macro – central bank keeps rates on hold, but door still open for future rate hikes; BZ WBK’s 2Q18 – solid results, volume growth shines the most; Orange Polska – strong 2Q18 results, with a 5% beat on EBITDA; Lenta’s 2Q sales

HEADLINES:
* Turkey macro: central bank keeps rates on hold, but door still open for future rate hikes
* BZ WBK: solid 2Q18 results - volume growth shines the most POSITIVE
* Orange Polska: strong 2Q18 results, with a 5% beat on EBITDA POSITIVE
* Lenta: 2Q sales growth decelerates to 17% yoy on lfl erosion to 3.5%; opex pressure NEGATIVE
* Turk Telekom: 2Q18 results - in line, some colour on new fiber protocol NEUTRAL
* Wizz Air: 1Q FY19 review - 6% miss vs. our EBITDAR due to number of disruptions, guidance maintained NEUTRAL
* CME: key takeaways from 2Q18 earnings call NEUTRAL
* AmRest: agreement to acquire Sushi Shop for EUR 240m; SPO very likely NEGATIVE
* PKP Cargo: write-down of rolling stock value for AWT NEGATIVE
* MLP Care: 100% of EUR-denominated debt hedged through to 2020E NEUTRAL
* O2 Czech Republic: 2Q18E preview (due on 27 July) NEUTRAL
* Erste Bank: 2Q18E preview (due on 31 July)
* Migros: 2Q18E - 17% yoy EBITDA growth expected to be wiped out by TRY weakness (due on 9 August) NEUTRAL
* OTP Bank: 2Q18E preview (due on 10 August)
* Pegasus Airlines: 2Q18E preview - margin contraction on weak TRY (due on 13 August)
* Turkish Airlines: 2Q18E preview - 18% EBITDAR growth on yield rebound, weak TRY (due on 13 August)
* DO&CO: 1Q FY19E preview - a soft quarter due to the weak TRY (due on 14 August)
* Ciech: 2Q18E preview - continuation of negative EBITDA trend (due on 26 September)
* Forte: 2Q18E preview - another weak quarter ahead (results date TBC)
* Turkish banks: 2Q18E earnings season NEUTRAL
Underlyings
Akbank TAS

Akbank is a commercial bank. Co. operates in five segments: Retail banking offers a range of retail services, such as deposit accounts, loans, credit cards, insurance products and asset management services; Corporate and Small and Medium Size Enterprises banking provides financial solutions and banking services; Treasury Activities conducts regional and foreign currency spot and forward transactions, bonds and other domestic securities; Private banking offers banking and investment transactions for upper-income groups and the International banking provides services for foreign trade financing and Turkish Lira clearances, and money transfers through agent financial institutions.

AMREST HOLDING

AmRest is a holding company. Through its subsidiaries, Co. is an international fas-foods and casual dining restaurant operator in Central and Eastern Europe. Co. has been building a portfolio of well recognized power brands such as KFC, Pizza Hut, Burger King, Applebee's and Starbucks based on solid franchise and joint venture partnerships. Co. owns La Tagliatella brand which is being developed as Co. operated restaurants as well as franchised stores. Co. operates almost 700 category Quick Service and Casual Dining restaurants. Co. is based in Wroclaw and operates in Poland, Czech Republic, Hungary, Russia, Bulgaria, Serbia, Croatia, Spain, France and the United States.

Central European Media Enterprises Ltd. Cl A

Ciech S.A.

Ciech is engaged in the production, trade and distribution of chemicals as well as comprehensive service activities directed at the domestic and foreign market. The main products sold by Co. are soda ash, TDI, plastics, resins, chemical fertilizers, plant protection chemicals, glass blocks and glass packaging, salt and other chemicals.

DO & CO Aktiengesellschaft

Do & Co AG is a foodservice company. Co. maintains three business divisions. Its Airline Catering division provides gourmet food for passengers of airline companies such as Austrian Airlines, Turkish Airlines, Air France on long-haul flights. Co.'s flying cooks prepare fresh meals on-board. The International Event Catering division provides services such as handling the menu and the provision of food for sporting events, including tennis and golf tournaments, skiing events and Formula One Grand Prix races. The Restaurants, Lounges & Hotel division operates three restaurants; five restaurants with bars and one at the Casino Baden, and three bakeries under the Demel brand.

Erste Group Bank AG

Erste Group is a financial services provider based in Austria. As of Dec 31 2015, Co.'s total assets amounted to Euro199,743 million and the number of customers was approximately 16.5 million. Co.'s key business is the retail business, covering the entire spectrum from lending, deposit and investment products to current accounts and credit cards. In addition to providing financial services to private individuals, Co.'s core activities also include advisory services and support for corporate clients in financing, investment and access to international capital markets, public sector funding and interbank market operations.

Migros Ticaret A.S

Migros Ticaret is a retailing group based in Turkey. Co. offers spacious stores in a wide range of formats and locations whose vast selection of stationery, glass and kitchenware, appliance, book, clothing, and other items along with groceries and other necessities. Co. maintains a store network of 1,004 national and international locations with a national presence in 70 provinces in Turkey's seven geographical regions. Store brand names include M, MM, MMM, 5M, MigroJet, Tansas, Macrocenter and Ramstores. Co. also provides customers alternatives such as internet, call centers, kiosks, catalogues, and mobile shopping networks.

MLP Saglik Hizmetleri AS

MLP Saglik Hizmetleri AS, formerly Medical Park Saglik Hizmetleri AS, is a Turkey-based company engaged in the healthcare sector. The Company operates more than 20 hospitals in more than 10 provinces in Turkey. The Company's medical departments include: Mouth and Dental Health, Brain and Nerve Surgery, Biochemistry, Dermatology, Child Health and Diseases, Physical Therapy and Rehabilitation, Hematology, Check-up, Eye Health and Diseases, Gastroenterology, Cardiac Surgery, Ear-Nose-Throat, Cardiology, Gynecology and Obstetrics, as well as Laboratory Services, among others. The Company's subsidiaries are: Medical Park Gaziantep Hastanesi, Samsun Medikal Grup Ozel Saglik Hizmetleri AS and Sentez Saglik Hizmetleri AS, among others.

OTP Bank Nyrt

OTP Bank is a financial institution based in Hungary. Co. is engaged in retail banking (account management, bankcards and Electronic sevices - OTPdirekt) corporate banking and private banking. In Hungary traditional banking operations are performed by Co. while specialized services, including car leasing, investment funds and insurance are developed and offered by Co.'s subsidiaries. Co. expands its operations throughout the region via its foreign subsidiaries. As of Dec 31 2011, Co. had total assets of HUF10,200,527,000,000 and deposits of HUF6,398,853,000,000.

Pegasus Hava Tasimaciligi AS

Pegasus Hava Tasimaciligi is a low-cost airline group based in Turkey. Co. provides reasonably-priced transportation opportunities on point-to-point basis in short and medium range flight lines on its domestic and international network. Co. primarily provides transportation opportunities from its main hub in Istanbul Sabiha Gokcen International Airport, but also offers scheduled flights from other domestic hubs, primarily in Adana, Antalya and Izmir. Co.'s fleet is composed of 49 airplanes in total. Co.'s flight network consists of 76 locations (45 abroad and 31 domestic flight locations in 30 countries). Co. also provides cargo services and provides various training services.

PKP Cargo

PKP Cargo SA is a Poland-based company active in the transportation sector. The Company's main activity is domestic and international transport of goods by rail and provision of logistic services in the field of railway cargo transport services. The Company divides its services into six divisions: Transport, offering rail transport carried out by PKP Cargo, road transport and ferry transport; Intermodal, providing intermodal rail transport; Forwarding, services carried out by Trade Trans, Cargosped and PKP Cargo International; Terminals, offering service of reloading terminals; Sidings, providing railway sidings; and Rolling Stock, which provides repairs of the rolling stock. It operates through Advanced World Transport BV (AWT).

Santander Bank Polska SA

Bank Zachodni is a bank seated in Poland. Co. and its subsidiaries provide a range of banking services for individual and business customers and operate in domestic and interbank foreign markets. Additionally, Co. provides also the following services, including intermediation in trading securities, leasing, factoring, asset/ fund management, insurance services, trading in stock and shares of commercial companies, and brokerage activity. Operational activity of Co. and its subsidiaries has been divided into five segments: Retail Banking, Business and Corporate Banking, Global Banking and Markets, ALM (Assets and Liabilities Management) and Centre, as well as Santander Consumer.

Turk Hava Yollari A.O.

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.

Turk Telekomunikasyon A.S.

Turk Telekomuniksayon is an integrated telecommunications company in Turkey. Co.'s principal activities include the provision of local, national, international and mobile telecommunication services, internet products and services, as well as call centre and customer relationship management, technology and information management. Co. has service network and product range in the fields of individual and corporate services. Co. provides services in all 81 cities of Turkey. Co. has two main segments; fixed line and mobile. As of Dec 31 2015, Co. had 12.9 million fixed access lines, 8.0 million broadband and 17.3 million mobile subscribers.

Turkiye Halk Bankasi Anonim Sirketi

Turkiye Halk Bankasi (Halkbank) is a banking and financial services company based in Turkey. Co. offers corporate and commercial banking products and services to a range of customers, from individuals to large corporations. Co.'s operations include: consumer and retail banking, consumer loans, credit and debit cards, deposit and overdraft accounts, payroll services, corporate and commercial banking, budget loans, credit line facilities, cash management, investment banking, brokerage, factoring, leasing and insurance services, and tradesmen/SME banking. As of Dec 31 2011, Co. operates 771 branches and had total assets of TL92,160,657,000.

Wizz Air Holdings Plc

Wizz Air Holding is a European airline. As of Mar 31 2017, Co. provided more than 500 routes from 28 bases, connecting 141 destinations across 42 countries. Co. has two reportable segments: the airline and the tour operator business units, marketed under the Wizz Air and Wizz Tours brand names, respectively. Wizz Air sells flight tickets and related services to external customers and, to an extent, to Wizz Tours. Wizz Tours sells travel packages to external customers covering the network of Wizz Air.

Provider
Wood and Company
Wood and Company

WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.

A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.

Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.

We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.

Analysts
Research Team

Other Reports on these Companies
Other Reports from Wood and Company

ResearchPool Subscriptions

Get the most out of your insights

Get in touch