Türkiye Sise Ve Cam Fabrikalari (SISE) H1 2024 earnings summary

Executive summary

• First half 2024 results reflect challenging macroeconomic conditions, subdued demand, and persistent cost inflation, with inflation accounting (IAS/TAS 29) impacting reported figures.

• Revenue for H1 2024 ranged from TRY 85.8 billion to TRY 103.6 billion, with net income between TRY 4.9 billion and TRY 5.0 billion, both down sharply year-over-year due to margin compression and inflation accounting.

• EBITDA margin dropped to 9% (from 22% prior year), with EBITDA between TRY 7.78 billion and TRY 22.6 billion, reflecting lower profitability.

• Management is focused on rebalancing OpEx and CapEx, maintaining liquidity, and adapting to market realities while prioritizing major ongoing projects.

• Inflation accounting (IAS/TAS 29) continues due to Turkey's hyperinflationary environment, restating financials to reflect purchasing power as of June 30, 2024.

Financial highlights

• Revenue increased 21% year-over-year to TRY 103.6 billion in one report, but other sources show a decline to TRY 85.8 billion, with gross profit margin between 23% and 40%.

• EBITDA margin was 9.1%–22%, with net income at TRY 4.9–5.0 billion; free cash flow was negative at TRY -21.2 billion.

• Net debt stood at TRY 49.2 billion (USD 1.9 billion equivalent), leverage ratio 2.6x, with 75% of debt long-term and 80–92% fixed rate.

• CapEx was TRY 10.8 billion, down from TRY 13 billion prior year; capex/revenue ratio at 13%.

• Total assets ranged from TRY 328.0 billion to TRY 369.1 billion, with equity between TRY 155.8 billion and TRY 193.6 billion.

Outlook and guidance

• Management expects gradual margin improvement in H2 2024, driven by selective pricing and cost controls, but no rapid recovery.

• CapEx for 2024 will remain below $1 billion, with flexibility to adjust based on EBITDA and market conditions.

• No concrete dividend suspension decision yet; all levers, including dividends, are under review to manage leverage and liquidity.

• Inflation accounting (IAS/TAS 29) will continue until Turkey no longer meets hyperinflation criteria.

• Sustainability targets include 2050 carbon neutrality, 15% water use reduction, and 50% packaging waste reduction by 2030.