Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aygaz AS (IST:AYGAZ, Financial) maintained its leadership in the Turkish LPG market with a total market share of 25.2% in the January-August period.
- The company achieved a significant inventory gain of TRY220 million in the third quarter, recovering losses from the first half of the year.
- Aygaz's joint venture in Bangladesh, United Tigers LPG, expanded its operations, reaching a total sales volume of 85,000 tons through 168 dealers.
- The merger of Sendeo-Kolay Gelsin was completed, and the improved operational performance contributed positively to the consolidated net profit.
- Aygaz maintained a strong net cash position of TRY1.6 billion as of the end of September, supported by dividend income from EYAÅž.
Negative Points
- Total Turkish LPG consumption contracted by 7% year on year, impacting Aygaz's sales volumes.
- Aygaz's EBITDA for its core LPG and natural gas business line decreased by 36% compared to the same period last year.
- The company experienced a 9% decline in domestic retail sales volumes, primarily due to reduced bulk and cylinder gas sales.
- Aygaz incurred an inventory loss of TRY180 million in the first half of the year due to declining Sonatrach prices.
- The financial performance in the third quarter lagged behind the previous year due to decreased retail sales volumes and lower inventory gains.
Q & A Highlights
Q: Can you provide an overview of the LPG market performance and Aygaz's market share in the third quarter of 2024?
A: Gökhan Dizemen, CFO, explained that the Turkish LPG market contracted by 7% year-on-year due to a high base effect and declining cylinder gas sales. Aygaz maintained a total market share of 25.2% from January to August 2024, leading the Turkish LPG market. Cylinder gas sales declined by 9%, and auto gas sales by 1% during the first eight months of the year.
Q: How did Aygaz's financial performance fare in the third quarter of 2024 compared to the previous year?
A: The CFO noted that EBITDA for the core LPG and natural gas business was TRY 1 billion, 36% lower than the previous year. This was due to a decline in sales volumes and increased operating expenses, although improvements in retail distribution margins and positive inventory exchange rate effects partially offset these impacts.
Q: What were the key factors affecting Aygaz's profitability in the third quarter of 2024?
A: The CFO highlighted that the decrease in Sonatrach prices led to an inventory gain of TRY 220 million in Q3, recovering losses from earlier in the year. However, the overall profitability lagged behind the previous year due to decreased retail sales volumes and lower inventory gains compared to 2023.
Q: Can you update us on Aygaz's joint venture in Bangladesh?
A: Gökhan Dizemen reported that United Tigers LPG, the joint venture in Bangladesh, reached 85,000 tons of LPG sales in the first nine months of 2024. The venture generated $72 million in revenue and $3.4 million in EBITDA, contributing TRY 13 million to Aygaz's consolidated financial results.
Q: What are Aygaz's forward-looking statements and guidance for 2024?
A: The CFO stated that due to market contraction, Aygaz revised its cylinder gas and auto gas sales volume guidance downward by 10,000 tons and 20,000 tons, respectively. The expected cylinder gas market share is between 41% to 42%, and auto gas market share is between 21.5% to 22.5%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
