İŞ INVESTMENT – Torunlar REIC TRGYO TI Company Report 2Q16 – 19.08.2016
2Q16 earnings review
Torunlar REIC reported TL175mn net earnings in its 2Q16 financials, comparing favourably with TL4mn net loss recorded in the same period last year and beating the market expectation of TL75mn by a wide margin. The Company generated TL171mn revenues in 2Q16, corresponding to 49% YoY and 32% QoQ increase but below the market expectation of TL198mn. Higher rent income thanks to fully operational MoI and Torun Tower assets supported top-line growth.
The Company’s net debt position continued to sail around TL1.9bn, which is in harmony with the average trailing four quarters. As of 2Q16-end, Torunlar REIC had TL2.4bn (€194mn & US$620mn) net short fx position due to FC denominated bank loans, remaining flattish on a quarterly basis. At its current market value, Torunlar REIC trades at 50% discount to its NAV, in harmony with both its historical average and listed REICs’ median level. We maintain Outperform rating for TRGYO with PT of TL6.75/share, offering an upside potential of 40%. We expect to see slightly positive market reaction to Torunlar REIC’s 2Q16 financials.