Petkim Petrokimya Holding Anonim Sirketi (PETKM) Q3 2024 earnings summary

Executive summary

• Weak performance in 3Q24 due to low product margins, planned and unplanned shutdowns, and inability to leverage STAR Refinery synergies.

• Revenue for the nine months ended September 30, 2024 was TL 57.16 billion, down from TL 61.88 billion year-over-year, reflecting a challenging market environment.

• The period ended with a net loss of TL 94 million, a significant improvement from the prior year's net loss of TL 9.56 billion.

• High inflation and Turkish lira overvaluation continued to strain financials, partially offset by OPEX optimizations.

• Received two awards for investor relations in 2024.

Financial highlights

• Sales declined 15% quarter-over-quarter to ₺17.2bn.

• EBITDA dropped to -₺573mn, a 175% decrease QoQ, with a margin of -3%.

• Net loss of -₺3bn, down 256% QoQ; EPS at 1.05 TL/share.

• Gross profit for the nine months was TL -676 million, compared to TL -2.53 billion in the prior year.

• Cash and cash equivalents at period end were TL 3.17 billion, down from TL 5.49 billion at year-end.

Outlook and guidance

• Ongoing OPEX optimizations to mitigate inflationary pressures.

• STAR Refinery expected to become a stable dividend payer over the medium term.

• Decarbonization and circular economy initiatives targeting 40% emission reduction by 2035 and carbon neutrality by 2050.

• Management expects continued volatility in raw material prices and foreign exchange rates to impact margins.

• Deferred tax assets related to investment incentives are expected to be recovered within 8-10 years, based on long-term profitability projections.