İŞ INVESTMENT – Petkim Company Update – 12.08.2016
PETKM 2Q16: Strong operational performance
Beating both our estimate of TL155mn and the consensus of TL153mn, Petkim reported TL227mn of net income in 2Q16, up by 27% YoY. The deviation of our estimate mainly stemmed from much better than expected EBITDA margin of 20.9% (both our and market’s expectation stood at 16.5%). Almost in-line with estimates (Is Inv: TL1145mn, Cons: TL1171), revenues realized at TL1176mn in 2Q16, up 3% YoY, thanks to the increase in sales prices and TL depreciation. Ethylene-naphtha spreads averaged at US$647 per tonne in 2Q16, 24% above the US$520 per tonne in 1Q16 and 31% above the 4Q15 average of US$494 per tonne. Therefore, the Company managed to post a strong EBITDA margin of 20.9% in the quarter compared with the 16,5% in 1Q16. As a result, Petkim posted record high EBITDA of TL245mn (Is Inv:TL189mn, Cons:TL195) in 2Q16, 34% above the previous quarter and up by 25% YoY.
We expect positive reaction to better than expected results in 2Q16. The company will held a conference call on Monday August 15th. We will go over our estimates afterwards.