Release Date: November 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tupras-Turkiye Petrol Rafineleri AS (IST:TUPRS, Financial) achieved the highest capacity utilization rate since the third quarter of 2019, reaching 101.4%.
- The company recorded all-time high domestic gasoline sales in the third quarter, driven by rising demand in Turkey.
- Tupras-Turkiye Petrol Rafineleri AS maintained a strong cash position with USD3 billion, supported by solid EBITDA generation and effective working capital management.
- The company completed a significant dividend payment of TRY43 billion in 2024, maintaining an 80% payout ratio.
- Tupras-Turkiye Petrol Rafineleri AS renewed its contract with Istanbul Airport to supply 1.8 million tons of jet fuel annually for five years, reinforcing its market presence.
Negative Points
- The company experienced a decrease in diesel cracks, averaging $15.7 per barrel, due to high inventory levels and a global industrial slowdown.
- Gasoline cracks were lower year-on-year at $14.1 per barrel, impacted by high utilization rates and competitive pressures.
- Tupras-Turkiye Petrol Rafineleri AS reported a 33% decline in revenues compared to the previous year, attributed to weakening crack margins.
- Exports decreased by 27% year-on-year as the company prioritized domestic sales, particularly in gasoline.
- The financial results were affected by a TRY3.6 billion expense due to the revaluation of deferred tax, impacting the net income.
Q & A Highlights
Q: After the maintenance, do you expect utilization rates to remain above usual levels in the fourth quarter and beyond? Also, can you provide details on the jet fuel contract pricing?
A: (Dolan Corp Mas, CFO) Post-maintenance, we typically see a temporary increase in utilization rates, but they tend to normalize over time. We will provide capacity utilization targets at the start of each year. Regarding the jet fuel contract with Istanbul Airport, the terms are similar to the previous agreement, but we cannot disclose specific trade terms.
Q: Can you provide the crack margin for the third quarter of the previous year, considering any changes due to accounting standards?
A: (Levent Bayar, Head of Investor Relations) We do not have that specific number as it was not calculated due to the transition from net funding margin to crack margin.
Q: When is the maintenance for the Izmit refinery expected, and what is the outlook for refining supply?
A: (Dolan Corp Mas, CFO) The maintenance at Izmit has been postponed to mid-next year due to commercial and planning considerations. We plan to start producing sustainable aviation fuel for export. Regarding refining supply, geopolitical uncertainties and new capacities coming online will influence crude flows, but we do not anticipate major disruptions.
Q: What are the implications of the recent fire at the ISOM unit in the refinery?
A: (Dolan Corp Mas, CFO) The fire was extinguished quickly, and there were no significant impacts on our operational and financial performance. All injured colleagues have been discharged from the hospital.
Q: How has the company performed financially in the third quarter, and what are the expectations moving forward?
A: (Dolan Corp Mas, CFO) We achieved the highest capacity utilization since Q3 2019, with strong domestic sales and a robust cash position. We completed a TRY23 billion dividend payment, totaling TRY43 billion for the year. Despite geopolitical uncertainties, we are well-positioned to capture margin recovery in the upcoming quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
