Mid-year Mark Books at the ISE

We analyzed the mid-year balance sheets of ISE-30 companies from various angles. Among the companies excluding banks, Petrol Ofisi has obtained the greatest increase in profits. Tüpraş comes first in sales. In the race of banks for profits, however, Yapı Kredi came atop.

 Having begun to recover after the 2001 crisis, and having made a great leap with the help of the inflow of ‘hot money’, is Turkish economy heading again for yet another difficult period? Turkey exports to a lot of countries, growth continues although a bit slackened; these are the sunny sides of the story. On the other hand, such problems as current account deficit, external debt, a rekindled inflation and the global crisis each presents serious threats to national economy in its own right. Trying to fully adapt to the global economy, Turkish companies are quite sensitive to the developments not only in the domestic market but also in external markets. While attempting to move to the rhythm of global economy’s agenda, to what extent do these companies get affected by all these fluctuations and what kind of responses do they give to both external and domestic crises? In order to have better insights into the issue, we turned our gaze to the companies trading at the ISE-30 and tried to analyze these companies from different angles. 

As is known, balance sheets for the first 6 months of the year were already declared. We have reached important conclusions after our analyses based on balance sheets for the last year and for the first half of this year. We have obtained noteworthy results making various comparisons out of financial data from ISE-30 companies. Let’s look what kind of differences emerge between the figures for the first half of 2008 and those for the last year… And how much do corporate profits, sales figures and total assets vary? 

Petrol Ofisi Obtained the Greatest Increase in Profit Growth

When we look at the companies at ISE-30 excluding banks, we see that large companies like Petrol Ofisi, Ereğli Demir Çelik, Kardemir, Türk Hava Yolları and Koç Holding top the list with respect to profit growth. According to consolidated balance sheets submitted to the ISE, Petrol Ofisi obtained the greatest increase in net profits in the first half of 2008. The company declared a 53 million YTL loss in the first half of 2007. Benefiting from the increase in oil prices, Petrol Ofisi had a net profit of 131 million YTL in the same period of this year. Türk Hava Yolları, which draws attention with its giant leaps, comes second in profit growth. While the increase in oil prices is a positive factor for Petrol Ofisi, it is a cost driver for Türk Hava Yolları. Despite this, however, the company’s net profit which was 89 million YTL in the first 6 months of last year reached 255 million YTL this year with a 186% increase. 

These companies are followed by Ereğli Demir Çelik with a net profit growth of 119% and by Kardemir with a 106% increase. Increasing its profit by 91% with respect to percentage, Koç Holding declared a record profit as to total amount. Koç Holding topped the list for profits in YTL terms in the first half of 2008 by declaring 1.7 billion YTL profit. Excluding finance companies, Turkcell came to have the second largest profit among the ISE-30 companies. 

Tüpraş Leads in Sales Growth

When analyzed by sales, Tüpraş appears to obtain the largest growth in sales by percentage. Tüpraş increased its sales by 50% compared to the same period of the last year. However, we see that as the company with the largest growth in sales Tüpraş ranks low in the profitability list. Tüpraş increased its profits by 17.4% in the first 6 months of 2008. Having increased its sales revenues by 37.6% Kardemir comes second in the list. Sales of Kardemir which reached 387.1 million YTL in the first half of 2007 rose to 532.9 million YTL in the same period of 2008. Petrol Ofisi ranks third with a 35% increase in sales. According to the structure of current assets, which define assets of a company that are expected to be converted to cash within one year, Kardemir emerges to have the greatest increase. Kardemir increased its current assets by 93% compared to the same period of the last year.

Türk Hava Yolları comes second after Kardemir with an 85% increase. Migros ranks third. When we look at the debt structure of companies, it is oberved that long and short term financial debts have risen in almost all companies. Total short and long term financial debts have increased most at Petrol Ofisi. This company’s debts increased by 86% compared to the same period of last year. Doğan Holding is the company which has reduced its debt rate most. 

Yapı Kredi Comes First among Banks

Recently, finance sector has been trying to cope with crises in developed countries. America’s largest banks make headlines with news of historic losses and bankruptcies. Finance sector adds to unemployment with new layoffs. How is the situation in Turkey? As for the banks at the ISE-30, we see that profits have increased in general. The company that increased its consolidated balance sheet profits most is Yapı Kredi. Yapı Kredi saw its profits rise close to 740 million YTL after a 61% increase compared to the same period of last year. The bank enjoyed a 23% growth in total assets.

Although it does not come first in asset growth, anyway the bank comes high in the list with total assets of 64.6 billion YTL. İş Bankası comes second in profitability with its 38.5% increase in profits. According to the bank’s non-consolidated balance sheet, profit growth in the first half of the year is 51%. Şekerbank ranks third after İş Bankası. Compared to the first half of 2007, consolidated balance sheet profits increased by some 33%. Among the ISE-30 banks, Garanti Bankası suffered the greatest fall in profits by percentage compared to the first half of 2007. While Garanti Bankası declared net profits of 1.5 billion YTL last year, its net profits totaled 1.023 billion YTL this year. When analyzed in YTL terms Akbank, İş Bankası and Garanti Bankası appear to have the largest profits. Net profits of Akbank reached 1.2 billion YTL, that of İş Bankası 1.1 billion YTL while Garanti Bankası obtained net profits of 1.02 billion YTL. When we look at total assets of these banks, it is seen that İş Bankası comes first with consolidated assets of 99.8 billion YTL.

Akbank comes second after İş Bankası with 85.1 billion YTL and Garanti Bankası ranks third with 83.6 billion YTL. Asya Participation Bank enjoyed the greatest increase in total assets compared to the same period of last year. This bank’s total assets increased by 48.3% compared to the first half of 2007. Şekerbank comes second with a growth of 46% in total assets. The fact that banks could increase profits within the current conditions caused optimism. The general view on the matter is that Turkish banking system has got the necessary lessons from the 2001 crisis and implemented required regulations. For this reason, the crisis in the US is not expected to have serious impacts on Turkish banks. Although worries have calmed down a bit amidst the news on profits of banks and holdings, the “anxiety” did not disappear for good yet.

Analysts claim that the effects of the crisis in the US will be observed in Turkey with the beginning of 2009. Small-size companies are already in a difficult situation. Many external factors such as oil prices, dollar and euro rates and growth figures in other countries have influences on corporate profits. Because of this, a specific strategy should be “urgently” adopted in order to minimize the effects of the pessimistic outlook that stands out all over the world.