Haci Ömer Sabanci Holding (SAHOL) Q2 2024 earnings summary

Executive summary

• Delivered resilient performance in H1 and Q2 2024 amid macroeconomic volatility and high inflation, supported by continued execution of strategic initiatives and investments in new economy sectors.

• Completed major acquisitions: 65% of Bulutistan (cloud tech) and 94.7%-95% of Mannok (building materials), strengthening digital and material technologies portfolios.

• Advanced sustainability agenda, reducing emissions by 20% and water consumption by 24% since 2021, received EFQM Outstanding Achievement Award, and published 2023 Sustainability Report.

• Maintained high liquidity and financial flexibility, with holding-only cash at TL 12 billion and net debt/EBITDA at 1.3x.

• Net asset value increased 23% in USD terms to $10.8 billion as of July 2024.

Financial highlights

• Combined H1 2024 revenue up 8% year-on-year to TL 509.6 billion; Q2 revenue up 10% to TL 255 billion, mainly driven by 50% banking growth.

• Combined EBITDA fell 41% to TL 61.8 billion; Q2 EBITDA at TL 26 billion with a 10% margin, down year-on-year due to inflation and macro pressures.

• Consolidated net income turned negative at TL -7.6 billion, compared to TL 10.8 billion in H1 2023, driven by non-bank losses and inflationary accounting.

• Non-bank margin contracted by 160 basis points in H1 2024 compared to H1 2023.

• NAV up 23% in USD terms since year-end, with a 41% discount to market cap.

Outlook and guidance

• Expect stronger performance in H2 2024, especially in energy generation due to higher price caps and increased demand; 2024 EBITDA guidance for energy segment confirmed at $500 million.

• Management focused on disciplined cost management, maintaining liquidity, and advancing new economy investments.

• CapEx in energy distribution and digital to accelerate in H2; continued focus on organic and inorganic growth opportunities.