Turkish glass manufacturing company Sisecam’s Q3 profit misses expectation

Türkiye Sisecam Factories (Sisecam) has reported its financial results for the third quarter of 2024, posting a net profit of ₺795 million (approximately $23.2 million).

This figure is significantly below market expectations, which had anticipated a profit of ₺2.2 billion (approximately $64.1 million).

Key financial highlights of Sisecam

• Net profit: ₺795 million (Market expectation: ₺2.2 billion)
• Revenue: Revenue for Q3 decreased by 7% year-on-year, reaching ₺42.9 billion (approximately $1.25 billion).
• 9-month revenue: For the first nine months of 2024, revenue dropped by 14%, totaling ₺136.3 billion (approximately $3.98 billion).
• Q3 2023 comparison: The profit of ₺4.74 billion (approximately $138.6 million) reported in Q3 2023 has been adjusted to a loss of ₺658.6 million (approximately $19.2 million) after applying inflation accounting.

Financial metrics

• Net financial expenses: Sisecam reported ₺3.35 billion (approximately $97.5 million) in net financial expenses, which was offset by a ₺4.1 billion (approximately $119.8 million) net monetary gain.
• Gross profit margin: The cumulative gross profit margin remained at 9%, although this is a decline compared to the previous year (9% in H1 2024 vs. 20% in 2023).
• Debt-to-equity ratio: The company’s net financial debt-to-equity ratio rose to 36%, up from 24% in 2023.

Production, sales performance

• Production: Over the first nine months, Sisecam produced 4.2 million tons of glass, 3.5 million tons of soda ash, and 2.8 million tons of industrial raw materials.
• Sales: Sales in Turkiye fell by 16%, while sales in Europe declined by 4%.

Outlook

The lower-than-expected net profit could put pressure on the company’s stock. However, the positive trends in quarterly EBITDA margin and return on equity may offer some reassurance. Sisecam’s shares are currently trading at a P/E ratio of 6.77 and an EV/EBITDA ratio of 15.07.