Ford Otomotiv Sanayi (FROTO) Q3 2024 earnings summary

Executive summary

• Revenue for the nine months ended 30 September 2024 was TRY 404.7 billion, down 2% year-over-year, with net profit at TRY 25.7 billion, reflecting a 38% decline due to weaker domestic sales and higher costs.

• Maintained third position in the domestic market with 8.5% share and led the commercial vehicle segment with 27% market share.

• Export volumes increased 8% and revenues rose 5% year-over-year, while domestic volumes contracted 16% and revenues declined 21%.

• Profitability diluted as expected, with EBITDA margin at 8% and net margin at 6.3%, impacted by inflation and higher costs.

• Production increased 7% year-over-year in Q3 2024, driven by renewed products and improved inventory management.

Financial highlights

• Total revenues for the nine months were TRY 404.7 billion, down 2% year-over-year; export revenues rose 5% while domestic revenues fell 21%.

• Operating profit dropped 57% to TRY 22.9 billion, and EBITDA fell 47% to TRY 32.3 billion.

• Gross profit for 9M24 was TRY 40.3 billion, down 38% year-over-year; net profit was TRY 25.7 billion, down from TRY 41.2 billion last year.

• Net financial debt increased to TRY 99.2 billion, with net debt/EBITDA at 2.45x.

• End-period cash and equivalents decreased 34% year-over-year to TRY 30.1 billion.

Outlook and guidance

• Domestic retail sales guidance revised upward to 105K–115K units for 2024; Turkish automotive market expected at 1,100K–1,200K units.

• Export guidance revised downward to 530K–580K units due to softening demand in export markets.

• CAPEX guidance for 2024 revised to €700–800 million, with similar heavy investment expected in 2025.

• A TRY 5.0 billion dividend is proposed for approval at the upcoming Extraordinary General Assembly.

• Continued investments in new vehicle projects and capacity expansion, with advances for investments.