HSBC International Turkish stock 2Q2023 earnings preview

We present our Q2 2023 forecasts for Turkish companies under our coverage..

 We expect total non-bank profits to surge 27% y-o-y and 46% q-o-q; private banks’ profits to rise 9% y-o-y and 10% q-o-q

 We expect strong results from autos, aviation, food retailers,and food & beverage; weak results from steel and petchems


Aggregate non-banks Q2 profits to grow 27% y-o-y and 46% q-o-q

The Q2 earnings season will kick off on 21 July (Arcelik will be the first of our coverage to report) and finish on 21 August for both non-banks and banks.

For non-banks, we expect the TRY’s accelerated depreciation of Q2 (36% against both USD and EUR) to have supported earnings, especially exporters and FX-linked businesses. Our estimates point to a y-o-y surge of 42% in aggregate revenues, 32% in EBITDA and 27% in profits. On a q-o-q basis, we expect increases of 24% in revenues, 53% in EBITDA and 46% in profits. For q-o-q comparisons, in addition to regular seasonality (such as in aviation), Ramadan (slow-down) effect shifting into Q1 and cessation of earthquake tax (one-off in Q1) should support Q2 profits.

For banks, we expect severe NIM pressure will be offset by robust fees and very high trading income. While core operating performance will look similar at all private  banks, we expect 65% QoQ earnings growth at Akbank thanks to massive trading gains while earnings of other banks stay flattish.


Where we expect relatively stronger results:

 Autos (Dogus, Ford, Turk Traktor, Tofas) – improved output, strong demand and pricing and FX (for exporters) should support earnings across the board Aviation (Pegasus, Turkish Airlines, TAV) – traffic remains solid especially on the international side, and cheaper fuel prices kick in to lift airlines’ profits

 Food retailers, food & beverage (Sok, Migros, Efes, CCI) – earnings well supported on solid revenue growth (high food inflation), although pricing pressure could be seen. Food and beverage producers appears resilient on solid tourism growth and manageable margin pressure

Where we expect relatively weaker y-o-y results:

 Steel (Erdemir, Kardemir) – EBITDA/t remains weaker y-o-y although some recovery from the 1Q23 lows likely with better steel prices and lower input costs

 Petchems (Petkim) – expect earnings to improve sequentially on the back of the  TRY depreciation and better plant operating rates but overall still remain weak.  Chemical margins have not recovered from trough levels and demand continues to disappoint – which should keep Petkim’s earnings subdued.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.