Turkey stock market company, Tupras TUPRS TI, read the latest news, updates, reports and analysis.
İŞ INVESTMENT – Tupras TUPRS Company Update – 12.08.2016
Price (TL) : 62.45 – T.P.(TL) : 81 – Mcap.mn.(TL) : 15639 – 3M ADV(mn$) : 33.03
TUPRS TI Equity- Rec.:OUTPERFORM Upside%: 29.7 Analyst: [email protected]
Weak results on low middle distillates cracks
In-line with our estimate of TL352mn, yet lower than consensus estimate of TL453mn, Tupras recorded TL331mn net income in 2Q16, down by 53% YoY. Revenues came at TL8453mn (Is Inv: TL7403mn, Cons:TL8346mn) while EBITDA realized at TL633mn (Is Inv:TL554mn, Cons:TL735mn) in 2Q16. Weaker than expected refining margin due low middle distillates cracks was the main reason behind the dismal operational performance.
Tupras’ net refining margin was at US$5.21 per bbl in 2Q16, down by 30% from US$7.48 in 2Q15 while Med Complex margin declined by 34% to US$3.20/bbl in 2Q16. Diesel and jet fuels crack ratios were lower due to supply demand imbalance in the market. Despite increase in diesel production with high capacity utilizations globally, US and Chinese demand was lower than expected and the effects of El-Nino was still being felt in consumption.
Downward revision in net refining margin estimate: The Company kept Med complex margin guidance of between USD3.5-4.0 per bbl while Tupras’s net refining margin guidance was revised down to US$4.5-5.0 per bbl from US$5.5-6.0 per bbl. Capacity utilization guidance of 100% delivering a production of 28 mn tons was maintained. Following the change in net refining margin estimate, we will revise our estimates for a downward revision in refining margins expectations for 2016. The initial market reaction to the lower than expected results is expected to be negative.