NET HOLDING A.Ş. March 10, Earnings Review / 2017YE

Size: px

Start display at page:

Download "NET HOLDING A.Ş. March 10, Earnings Review / 2017YE"

Beryl Quinn
5 years ago
Views:

1 NET HOLDING A.Ş. Earnings Review / 217YE th March 1, 218 Net Holding announces its 217 YE results; stellar operational performance from Northern Cyprus and Montenegro lead to historic record-high consolidated EBITDA for the full year 217. Net Holding s consolidated EBITDA for 217 YE rose to 224mn TL (59.3mn USD) from 143.8mn TL (4.8mn USD) in 216 up respectively 56% and 45.3% in TL and USD terms. The strong growth of EBITDA for 217 YE was driven by robust sales increase for 217, up from 472mn TL (133.9 mn USD) last year same period to 652mn TL (172.5mn USD) this year. The sales momentum corresponds to 38.1% and 28.9% year-on-year increases respectively in TL and USD terms for 217 YE. The Cash position of the Company has slightly decreased from 48mn TL (136mn USD) in 217 YE to 295mn TL (78mn USD) in 217 YE. The cash use has been associated with mn TL of NTHOL private sector bond paid back to investors in cash along with continued NTHOL and NTTUR shares buybacks as a result of the NTTUR NTHOL merger that happened in 217. The Debt position of the Company has slightly increased to 774.6mn TL (25mn USD) in 217 YE versus 558mn TL (158mn USD) in 217 YE. Regional Split of 217 FY for EBITDA; Northern Cyprus EBITDA up from 182mn TL (51.6mn USD) in 216 YE to 228mn TL (6.5mn USD) in 217 YE, representing solid ongoing double digit growth of 17.3% in USD terms. The five Merit Casinos in Northern Cyprus constitute the core of NetHolding s gaming operations with the organic growth continuing at better operating margins. Montenegro up from -7.8mn TL (-2.2mn USD) in 216 YE to 49mn TL (13mn USD) in 217 YE, underlining a robust second year of operation with direct contribution to consolidated EBITDA of Net Holding. After first year of operation in 216, Merit Casinos have started to deliver better than expected. Croatia has registered at EBITDA level -16.7mn TL (-4.4mn USD) in its first full year of operation, not in line with expectations. The Merit Casinos are going through an adaptation phase in Croatia with a better 218 in sight in the second year of operation. Headquarters expenses were 31.7mn TL (9mn USD) in 216 YE versus 44mn TL (11.6mn USD) in 217 YE. Please bear in mind up until a new casino is inaugurated all related opening costs and capex remain at Net Holding, contributing to higher headquarters expenses. In the case of 217 YE, Merit Svilengrad Casino s (Bulgaria) capex were included in NTHOL headquarters expenses. 1

2 SUMMARY Operational Status in Hotels & Casinos; Overall, Northern Cyprus Merit Hotels & Casinos have delivered better than expected results in 217 with 6.5mn USD of EBITDA; historic high sales figures of 172.5mn USD at better operating margins at both hotel and casino sides and record high EBITDA for Northern Cyprus. Our new 69 all-suite wing is now open for business at Merit Crystal Cove, a large slot hall addition to our star Merit Royal Casino has now been completed and is also open for business. Northern Cyprus Merit Casinos continue to deliver the Spirit of Merit to a wider range of international hosts and players. On Montenegro front, Merit Casinos operations continue into their second year with much better performance contributing positively to the Group s EBITDA with 13mn USD; high EBITDA margins, growing sales figures, diversified player base and new exciting venues have all made Montenegro the rising star of 217 for us. We continue our operations with two casinos in Montenegro having dropped the Avala Casino from our line as part of our golden rule; any casino that registers back to back two years of losses has to be shut down in the Balkans, we applied the golden rule. On Croatia side, Merit Casinos have started their operations in mid-december 216 with 217 being their first year of operation. The performance of Merit Casinos in Croatia were below expectations for 217; the adaptation phase has been longer than anticipated, bet sizes per person and entrance numbers were both fairly lower than expected. We expect better results in 218 through the conclusion of our adaptation phase to Croatia and its gaming market with a focus on player quality and enhanced junket operations towards the region. Stock Data 9 March 217 Current Price 2.46 Current Mcap (mn USD) 367 Enterprise Value (mn USD) 494 Net Debt (mn USD) 127 Bloomberg Ticker NTHOL:TI Number of outstanding shares (mn) Net Holding Price Chart Average daily volume in 218 (mn TL) 3.2 High / Low Daiy Price Range (12M)

3 SUMMARY (Continued) Other Important Balance Sheet & Income Statement Matters; Every two years, the entire real estate portfolio of Net holding is revalued by a Turkish Capital Markets Board certified real estate appraisal company. The last appraisal was done in 215 and a new one was due for 217. As per our expectations, the 217 real estate appraisal of Net Holding s real estate portfolio has generated a robust appreciation led by strong positive momentum in Northern Cyprus real estate market. As a consequence, a total of 291mn USD of real estate appreciation has been booked as follows; 227mn USD of appreciation to be added to the balance sheet under operational assets and a net of 64mn USD of appreciation booked to the income statement as income from investment activities for land kept as investment while 86mn USD of appreciation added to the balance sheet under land for investment. The net of 64mn USD implies 86mn USD of land value appreciation for land kept under land for investment purposes with the netting implying the potential tax burden to be paid if the land for investment was sold at the current market prices; registered as deferred tax payments in the income statement. In addition, the Total Equity of Net Holding has surpassed the 1 billion USD mark and has reached 1,168,, USD in 217 YE versus 874,, USD in 216 YE. The sizable 294 mn USD of Total Equity growth was driven by the revaluation of NetHolding s real estate portfolio (227mn USD) and the positive impact of Net Holding-Net Turizm merger (67mn USD) which eliminated the minority interest related complications and losses of equity. 3

4 FINANCIAL OVERVIEW Sales (mn TL) 38.1 % Consolidated EBITDA (mn TL) 55.8% Total Financial Debt (mn TL) % Sales (mn USD) 28.9 % Consolidated EBITDA (mn USD) % Total Financial Debt (mn USD) 29.5% Total Cash & FI (mn TL) % % Total Cash & FI (mn USD) 4

5 TRNC OPERATIONAL OVERVIEW TRNC Sales mn TL TRNC Sales mn USD % TRNC EBITDA mn TL Ebitda Margin 4.5% % % % 28.7% % % 13.4% TRNC EBITDA mn USD

Disclaimer Any statements set forth herein that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from

6 Disclaimer Any statements set forth herein that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Forward-looking statements can be recognized by the use of words such as expects, plans, will, could, estimates, projects, intends, or words of similar meaning. Such forward-looking statements speak only as of the date of this press release, and are not guarantees of future performance. Such forward-looking statements involve risks and uncertainties that may cause actual results, performance or financial condition to materially differ from those expressed or implied in the forward-looking statements as a result of various factors and assumptions. The Company undertakes no obligation to revise forward-looking statements to reflect events or circumstances after the date of this press release. Potential risks and uncertainties including changes in applicable regulations, and other information detailed from time to time in the Company's filings and future filings with the BIST or the Turkish Capital Markets Board. Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. 6

EARNINGS REVIEW 3Q/2018 November 11 th, 2018

EARNINGS REVIEW 3Q/2018 November 11 th, 2018 1 EARNINGS REVIEW 3Q/218 November 11 th, 218 Net Holding announced its 3Q/218 results; historic record 3Q consolidated EBITDA despite a temporary event in Northern Cyprus performance due a to a rollercoaster