28.04.2025 15:00
Arçelik, closing three of its factories and laying off 1,800 employees, reported a loss in the first quarter of the year that was well above expectations. The high loss figure increased pressure on its shares. The white goods giant Arçelik reported a net loss of 1.64 billion lira in the first quarter of 2021.
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Arçelik announced on the Public Disclosure Platform (KAP) that it reported a net loss of 1 billion 640 million TL in the first quarter of 2025. This figure contrasts with the net profit of 2 billion 425 million TL achieved in the same period last year.
FINANCIAL ISSUES REFLECTED IN THE BALANCE SHEET
The company's gross profit decreased by 2% on a quarterly basis, while it increased by 6% year-on-year, reaching 31.2 billion TL. The gross profit margin fell to 28.7%, a decrease of 1 percentage point compared to the same quarter last year. While falling raw material prices positively affected the gross profit margin on a yearly basis, the decline in capacity utilization and competitive pressures intensified by pricing pressures suppressed the gross profit margin. In the same period, EBITDA was realized at 5.7 billion TL, in line with expectations. The EBITDA figure showed a 27% decrease year-on-year and an 8% increase on a quarterly basis. In the 4th quarter of 2024, the EBITDA figure was 5.2 billion TL, while it was 7.8 billion TL in the same period last year. Due to increasing operating expenses and declining operational efficiency, the EBITDA margin worsened by 2.7 percentage points year-on-year to 5.3%.
SALES REVENUES INCREASED
The company's sales revenues increased by 9% in the first quarter of the year compared to the same period last year, reaching 109.1 billion TL. In the domestic market, sales contracted by 11.6% in real terms due to a high base effect and weakening consumer demand, while international sales showed a real growth of 24.8%. This growth was particularly influenced by the positive impact of new acquisitions in Europe and the MENA region. 79% of consolidated revenues were generated from international operations. The ratio of operating expenses to sales rose to 27.7%, compared to 26.4% in the first quarter of 2024. This increase was driven by personnel expenses, marketing expenditures, and integration costs related to acquisitions. Despite the increase in sales costs, total operating profit remained limited at 1.0 billion TL, reflecting a 77% decline year-on-year.
THE COMPANY'S NET DEBT ALSO INCREASED
The company's net debt increased to 115.4 billion TL compared to the end of the previous year. The leverage ratio (net debt / adjusted EBITDA) rose to 4.06x (1Q24: 3.8x). The depreciation of the TL and the increase in leverage after EBITDA contributed to this rise. The debt structure is weighted 44% in euros, 19% in dollars, and 23% in TL, which increases sensitivity to currency fluctuations. Financing expenses amounted to 6.45 billion TL, which could only be partially offset by net monetary position gains (4.34 billion TL). Free cash flow remained negative, amounting to -12.9 billion TL. This situation reflects the impact of the increase in working capital and investment expenditures. Arçelik did not change its expectations for 2025. Accordingly, it is expected that domestic revenue will remain flat in 2025. International revenue is projected to increase by around 15% (in real terms). It is anticipated that the EBITDA margin will exceed 6.5%, while the net working capital/revenue ratio is expected to be less than 20%. The investment expenditure expectation is approximately 300 million euros.
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