WOOD Flash - Vestel Beyaz: 2Q19 results - 20% beat on net profit from export market growth
On Thursday 1 August, after the close, Vestel Beyaz (VESBE) announced 2Q19 revenues of TRY 1.8bn (+33% yoy); EBITDA of TRY 310m (+44% yoy) and net income of TRY 234m (+75% yoy). The company posted a strong set of results despite the contraction in the domestic white goods (WG) market (-8% yoy). Export sales grew 48% (+17% in EUR terms), stemming from new capacity coming online in 2018 (1.5m in washing machines and tumble dryers; 0.9m in dishwashers) and further growth in ODM and ODM business with existing clients. On our calculations, VESBE earns a higher margin on export sales. The share of export revenues grew to 78% (from 70% in 2Q18), which resulted in a 3% beat to our EBITDA estimate. The beat extended further on net profit, to 18%, due to lower-than-expected other expenses, which are related to quarterly revaluations of export receivables, and FX denominated trade payables.We see these strong results warranting the 12% jump in the share price today. The company continues to take advantage of growing exposure to export markets, while the shrinking domestic market, coupled with share losses in 2Q19 for VESBE, helped profitability and the overall results.
Vestel Beyaz Esya Sanayi ve Ticaret AS (Vestel Beyaz Esya) is a Turkey-based manufacturer of home appliances, including no-frost, double door, and single door, refrigerators; washing machines with different capacities; air conditioners; ovens with different functions, and dishwashers. The Company operates production facilities in Manisa and Turkey. The Company's marketing and sales activities are carried out by two other group companies, Vestel Dayanikli Tuketim Mallari Pazarlama AS and Vestel Dis Ticaret AS. Vestel Beyaz Esya is a subsidiary of Vestel Group. In January 2014, Vestel Elektronik Sanayi ve Ticaret AS, increased its stake in the Company to 92.6%.
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