Karsan (KARSN) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 reached 4,224,063 TL, a 3% decrease year-over-year; EBITDA rose 6% to 427 million TL.

• Net loss for H1 2024 was 280,190 TL, widening 16% compared to the same period last year.

• Q2 2024 revenue increased 7% year-over-year to 2.32 billion TL; EBITDA up 41% to 375 million TL.

• Operating profit declined sharply, down 60% for H1 and 82% for Q2 year-over-year.

• Financial statements reflect TMS 34 and TMS 29 adjustments for high inflation and prior period restatements.

Financial highlights

• Gross profit for H1 2024 rose 2% year-over-year to 811 million TL; Q2 gross profit up 21% to 577 million TL.

• Investment income turned negative in H1 2024 at -203 million TL, a 438% decline year-over-year.

• Financial expenses improved by 48% in H1 and 72% in Q2 year-over-year.

• Free cash flow turned negative at -707 million TL in H1 2024, compared to 124 million TL in H1 2023.

• Cash and cash equivalents decreased to 574,375 TL as of June 30, 2024, from 1,281,127 TL at year-end 2023.

Outlook and guidance

• 2024 revenue guidance set at 9-10 billion TL, with EBITDA expected between 1.3-1.4 billion TL.

• Net profit margin targeted at 2-3% for 2024.

• Sales volume guidance for 2024 is 500-600 units.

• Management expects revenue growth and improved operating profitability in the remainder of 2024, supported by scale effects and anticipated cash inflows.

• No material risk to going concern is foreseen, with net working capital remaining positive.