Türkiye Petrol Rafinerileri (TUPRS) Q2 2024 earnings summary

Executive summary

• Achieved highest Q2 sales volume in seven years at 7.8 million tons, driven by record international sales and strong domestic demand, with international sales up 56% year-over-year.

• Maintained high operational efficiency with 93.5% capacity utilization despite major maintenance, and strong liquidity with cash and cash equivalents at TRY 87.9 billion as of June 30, 2024.

• EBITDA for Q2 was TRY 12.4 billion, down 54% year-over-year, reflecting solid operational performance amid narrower differentials and limited inventory gains.

• Net income for Q2 was TRY 5 billion, and for 1H 2024 was TRY 5.5 billion, both reflecting significant year-over-year declines.

• Dividend distributions continued, with TRY 21.0 billion paid in 1H 2024 and a proposed total dividend of TRY 43 billion for the year.

Financial highlights

• Q2 2024 revenue reached TRY 191 billion ($5.8 billion), up 4% year-over-year; 1H 2024 revenue was TRY 370.1 billion.

• EBITDA CCS for Q2 was TRY 12.4 billion, down from TRY 26.9 billion in Q2 2023; 1H 2024 EBITDA was TRY 15.2 billion.

• Net income for Q2 was TRY 5 billion; for 1H 2024, TRY 5.5 billion, both down significantly year-over-year.

• Gross profit for Q2 was TRY 17 billion; for 1H 2024, TRY 31.7 billion.

• Net cash position at quarter-end was TRY 55 billion, with net debt to EBITDA at -1.2x; gearing ratio improved to -22.3% as of June 30, 2024.

Outlook and guidance

• Crack margin guidance for 2024 revised down to $12 per barrel due to weaker market conditions.

• Production and sales guidance unchanged: ~26 million tons production, ~30 million tons sales for 2024, with capacity utilization expected at 85%-90%.

• Consolidated CapEx target for 2024 revised to $400 million, with some investments postponed.

• Management expects continued volatility in commodity and currency markets, focusing on risk management and hedging.

• Deferred tax assets from investment incentives are expected to be recovered within five years.