WOOD Flash – Enerjisa Enerji: 1Q21 results review – a strong start to 2021
Yesterday (4 May), after the market closed, Enerjisa reported a solid set of numbers. In 1Q21, the company posted underlying net profit of TRY 522m (+48% yoy) on operational earnings of TRY 1,628m (+28% yoy) and revenues of TRY 5,889m (+2% yoy). The revenues were in line with both our and the market’s estimates, but the operational earnings beat the estimates by 8% and 6%, leading to 9% and 6% beats on the underlying net profit, respectively. Accounting for the one-offs related to prior tariff periods, the operational earnings growth was 36% yoy higher, leading to an even stronger beat. Moreover, in the first quarter, Enerjisa’s free cash flow generation accelerated yoy, by TRY 965m, supported by a higher operating cash flow generated in both distribution and retail. Versus our numbers, the operational earnings beat came from the better retail segment, but also a slightly better performance in distribution. As of end-1Q21, Enerjisa’s financial net debt/operational earnings fell to 1.4x, down from 1.7x by end-2020, driven by higher earnings, but also a 7% qoq drop in the net debt. Enerjisa kept its FY guidance, from February, unchanged. Last week, we updated our price target (PT) for Enerjisa to TRY 14.9/share. We remain BUYers of the stock.Enerjisa Enerji AS is a Turkey-based company engaged in the utilities sector. The Company, together with its subsidiaries, is primarily engaged in making investments in energy companies, and deals with the generation, sale, and distribution of electricity, as well as the trade of natural gas. The Company reports its business activities into two main segments: Electricity Distribution and Retail. The Electricity distribution segment includes the transmission of electricity over lines users through distribution networks and provides infrastructure investments in conformity with the energy market regulation authority (EMRA). The Retail segment conducts mainly retail sales of electricity to customers. Enerjisa Enerji AS operates through a number of subsidiaries, such as Baskent Edas, Ayedas and Toroslar Edas, among others.
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