Tofas Türk Otomobil Fabrikasi Anonim Sirketi (TOASO) Q3 2024 earnings summary

Executive summary

• Nine-month 2024 results were below expectations due to intense domestic competition, unfavorable tax environment, product transition, and poor local market performance, with only the Egea model produced locally in Q3.

• Hyperinflation and negative IAS29 impact from a high net monetary position significantly reduced profitability, compressing PBT margin by over 10%.

• Market leadership was maintained with an 11.9% share, despite a 4.7pp year-over-year decline and challenging conditions.

• Export volumes dropped 33% year-over-year, hitting a low in Q3 due to Algerian market issues, model phase-outs, and regulatory setbacks in MENA.

• New manufacturing contract signed with Stellantis for KO model LCV and combi versions, with €232M investment planned and production from 2024–2032.

Financial highlights

• Net sales fell 30.6% year-over-year to TL 87.1bn in 9M24; EBITDA dropped 57.3% to TL 8.5bn; PBT declined 72% to TL 4.9bn.

• Gross margin declined 5.8pp to 12.7%; operating margin down 8.3pp to 4.5%; net margin fell 5.0pp to 5.8%.

• Cash and cash equivalents stood at TL 20.7bn at quarter-end, down due to TL 10bn in dividend payments.

• CapEx reached €65M in 9M24, mainly for KO investment and Egea/Tipo.

• Total assets decreased to TL 86.6bn as of 30 September 2024 from TL 106.9bn at year-end 2023.

Outlook and guidance

• PBT margin guidance revised down to above 5% for the full year.

• Domestic LV market expected at 1.0–1.15mn units; retail sales guidance raised to 130–140K units.

• Export shipments guidance revised to 35–45K units; production volume target set at 135–145K units.

• Investment outlook maintained at €150M, with high Q4 spending expected.