Earnings call transcript: Sabanci sees revenue rise, EBITDA fall in 2024

Sabanci Holding, with a market capitalization of $6.1 billion, reported mixed financial results in its latest earnings call, with a 6% increase in combined revenues for 2024, while EBITDA fell by 34%. The company transitioned from a net income to a net loss, reflecting challenges in its non-banking segment, which saw a 12% revenue contraction. Despite these challenges, Sabanci maintained a healthy leverage ratio of 1.4x and ended the year with a cash position just under $350 million. According to InvestingPro analysis, the stock appears fairly valued, with analysts maintaining a Strong Buy consensus.

Key Takeaways

• Combined revenues increased by 6% in 2024.
• EBITDA decreased by 34%.
• Sabanci transitioned from net income to net loss.
• Non-banking segment revenue contracted by 12%.
• Cash position remained strong at just under $350 million.

Company Performance

Sabanci Holding’s performance in 2024 reflected a challenging economic environment, with a notable decline in EBITDA despite a rise in overall revenues. The company’s decision to shift from net income to net loss was primarily driven by a contraction in its non-banking segments. Sabanci’s diversified business portfolio, including banking, energy, and digital sectors, has helped maintain its market share amidst these challenges.

Financial Highlights

• Revenue: Increased by 6% in 2024.
• EBITDA: Decreased by 34%.
• Non-banking segment revenue: Contracted by 12%.
• EBITDA margin: Increased by nearly 100 basis points.
• Leverage ratio: 1.4x.
• Cash position: Just under $350 million.
• Cash to sales ratio: 13.5%.

Outlook & Guidance

Sabanci is targeting a cash to sales ratio of 15-20% by 2029 and is committed to $5 billion in ESG-linked activities by 2027. The company is focusing on expanding its energy and digital businesses and is preparing for a potential IPO. It expects gradual credit growth and improving net interest margins in the coming years.

Executive Commentary

CEO David emphasized the company’s long-term strategy, stating, "Long term success is much more important than short-term results." He also highlighted the strategic transformation, saying, "We are in the process of transforming the portfolio to a more balanced structure." David noted the significance of the upcoming year, describing 2025 as "a strategical year."

Risks and Challenges

• High inflation and macroeconomic measures in Turkey could impact growth.
• Interest rates remain high, constraining the banking sector.
• Potential tariff impacts on exports could affect earnings.
• Supply chain disruptions may pose challenges to operational efficiency.
• Fluctuating electricity prices could impact the energy segment’s profitability.

Sabanci Holding’s strategic initiatives and focus on long-term growth position it to navigate these challenges, although it will need to address these risks to ensure sustained performance.

Full transcript - Sabanci Holding-EXCH (SAHOL) Q4 2024:

Moderator: Please refer to our disclaimer before we proceed with the presentation. Under tradition, our CEO, Jay Kaltura, he is here with us today together with our group CFO, Horan Tester.

David, CEO, Sabangi Holdings: Let me give the floor to our CEO, David. Good morning, good afternoon, everyone. Before we review last year results, as I always do, I will address the strategic execution across our businesses during the year. This time, let’s start with Malloc, where we are hosting this call. So together with our management team, we are visiting Manok in Ireland and tomorrow we will be hosting a press conference in Ireland.

Following our previous expansion in Spain with the acquisition of Bunio plant, an ongoing grinding investment in The U. S, as you all know, we acquired Irish Manok for million in October 2024. This is Chinsa’s third major global expansion in the past three years, providing wide range of products such as inflation materials and sustainable packaging in addition to Sema and Sema based products. This strategic move also represents Sovani Group’s most substantial overseas acquisition in recent history. Again, Hamburg Material Technologies developed our ultimate made cemented electricity achieved medicines this year, making us the third largest producer globally and further solidifying our position in the industry.

In energy business, our Geiger 2 construction has been progressing at plants. At the end of twenty twenty four, we reached a total generation capacity of 3.9 gigawatts through acquisitions and new capacity additions with 47 of this capacity being renewable. Recently, NICE recently secured a loan agreement of over $1,000,000,000 for the financing of seven fifty megawatts of this 1,000 megawatts under Jetta two projects. With the creditors, the development finance corporation is a key stakeholder in this financing and our objective is to finance the entire thousand megawatt capacity through that. In The U.

S, the commissioning of the Airbus II project two seventy two megawatts followed our plan completed in June 2024, ’2 months ahead of the original plan and started generating positive net income only two years after the establishment of Sabangi renewables. The construction of the two thirty two megawatt Florian and Total Power plant is progressing in line with our projections. The commission is scheduled for June 2021. Upon completion, we will have 100 gigawatts of operational capacity in The U. S.

With a 60 megawatts storage capacity. Digital is another key component of our strategic priorities and this is an area where we see significant synergies with our Energy business. As you have suggested in our mid term guidance, we are exploring opportunities with digital infrastructure businesses that have the potential to scale up significantly over the next five years and represent a much higher share in our net asset value by 2029. There is a strategic move to reach these targets. We acquired an additional 65% for ChromosysCal, Thirtieth’s leading cloud technology company bringing our total executive ownership to more than 75%.

Aligning perfectly with our objective of identifying scalable business models In the reversal through Sabaji Ventures, we have recently invested in Terra, one of the leaders in Quantum Computing. We have made direct investments in each integrated company to date, reaching a total investment amounting of over $14,000,000 through Sabangi Ventures. And finally, embracing collaboration and leveraging synergies among Sabangi Group companies is one of our top priorities. As a recent example of this, with our two financial services companies under the leadership of a single CEO, we have now merged the financial services and banking group FCDUs into a single structure to enhance cross selling opportunities, improve efficiency and accelerate growth. Now let’s start with results.

Financial results are clear. 2024 was a challenging year due to hard inflation, macro prudential measures implemented under this inflationary program impacting a lot of sectors including ’nineteen as well as the gap between inflation and devaluation of the lira in particular. This posed a particular challenge for large groups like us in asset banking and export oriented businesses. Specifically, groups that consolidate banks recorded net losses under Simplicio Accounting and events with strong cash provisions were severely punished by Simplicio Accounting. However, our businesses continue to demonstrate these operational performance to navigate this environment successfully supported by our B2B portfolio.

In 2024, Sabangio Holdings delivered 6% combined top line growth. But more importantly, our operational profitability performance on a quarterly basis is interested as we constantly improve our non bank EBITDA margins during the year and the bottom line in non bank transfer of CLP $712,000,000 losses to CLP $1,300,000,000 net income excluding non recurring items and monetary losses to the market holding balance sheet. Mohan will provide you more details on this. From the balance sheet perspective, the strength of our balance sheet allows us to lead our businesses through volatility and economic slowdown. We ended the year with a healthy leverage ratio of 1.4 times and having a strong cash position just under $350,000,000 Our cash to sales ratio reached 13.5% more than doubling over the past five years.

With this contract, the recent announced targets to reach 15% to 20% in 2029. From the back of good operational performance and positive results for 2025, our Board has proposed a dividend of 3 liras per share that will be subject to ordinary general assembly approval on March 27. So this will be the twenty third year that we have paid dividends to our shareholders without the call. We will remain focused on capital allocation and create value for all our top stakeholders and our total balance sheet is well positioned to satisfy attractive investment opportunities going forward. Despite of our investments criteria, let me also summarize our ESG activities during the year.

One of the major shifts we have made recently is to evolve our approach from a climate scope of one to a broader nature scientific study. We are committed to reducing scope one and two emissions 15% by 2025 and twenty two percent by 2013, ultimately reaching net zero by 2015. In parallel, we have made significant progress in reducing commissions, achieving a 20% reduction in scope one and two emissions compared to 2021. We now start to track global operations and have set new water efficiency targets. As such, we aim to achieve our water related targets as of 2013 while water management is also among our criteria for investments and acquisitions.

We are also working to achieve circular inflow targets until 2013. Design all three products with circular philosophy by 02/1950 and stop spending our risk to land to time incineration. With our ongoing investments, we are on track to reach four gigawatts of renewable energy capacity by the end of twenty twenty six representing almost two thirds of our historical capacity. Furthermore, we have committed $5,000,000,000 standing to ATG linked activities by 2027 With 4% of sales commitment all will be realized as of end of twenty twenty three. Finally, LatAm’s inclusion in net zero banking alliance our leadership in sustainable finance and our commitment to a next year.

With all our efforts around sustainability, we have gained significant momentum in our CDP platforms. This year, almost all our 11 reporting companies managed to be included CDP global A list in at least one category. This success, which we have demonstrated in one of the most prestigious indexes within the framework of international regulations is one of the clearest indicators of how strong a position we have on a global scale. We increased our score in the Cordon Sustainability Index and were selected for SRT Global Sustainability Yearbook for two years in a row. We moved leading rankings in major industries such as MSTI and LSTG and I ordered six times ITF from a special award of outstanding achievements in sustainability.

Now let me leave the work to Paul. Thank you, Greg. Good morning, good afternoon, everyone from Ireland, Thomas. As Greg was presenting out, we’re sitting in

Moderator: the premises of Manok, The acquisition that seems to have completed last October, which has already been integrated into our overall business. Now I’ll try to walk you through the financial results for the quarter and for the year. And as usual, if we start from Page six, obviously, I’ll give you a little bit of a backdrop, which I’m pretty sure if you’re listening to the other British companies that must be something you’re hearing, but still it’s worth mentioning if you bear with me a little bit. Obviously, as we discussed throughout the year, 2024 from a commodity and energy prices point of view was a normal year given after the pandemic and the Russia’s Invasion Of Ukraine, which hit the energy prices quite significantly in 2022. In the past two years, these have normalized.

But other than that, we can say 2024 was a period where Turkey’s economy was in transition. This inflation program was in place and had implications across many of our businesses. First of all, the macro prudential measures that are applied has impact on certain industries, mainly the banking industry where net income margin generation is quite challenging throughout here. I’m pretty sure you must be, when you talk to the Turkish banks, you must be hearing. So there is a difference between inflation and devaluation as you see on this page on the bottom left, which obviously can quite a lot of convincing companies quite adversely like Kymsta, which are fostering us today, like Akasa, like Visa or like Korpsa in our portfolio, which actually costs in dollars but has to be translated into Turkish lira.

The interest rates are high, although the banking industry doesn’t benefit that because of those macro prudential measures, but the interest rate is the bottom line of industrial businesses and it did exhaust 2024. We’re applying inflation accounting for especially businesses like ours in Sahaja Holdings where the equity base is strong, but without some serious monetary losses, which we incurred in the period I’m going to refer those to you for Savant Holdings specifically. And of course, if you take Safran, for example, which has some leading capital adequacy ratios in the sector, it also suffers higher monetary losses, which obviously impacts Svanhoe Holdings here and there in this period as well. I’m pretty sure you must be following as seen through certain reports that there are certain impairments, which went especially in the last quarter of the year. In a year like this, from a prudency point of view, that’s something you should expect from us.

And finally, deferred taxes. If you follow our financial statements and look at our footnotes and if you go to footnote four, I’m sure you’re going to see the changes in the taxation line between 2023 and 2024, which are very serious in certain businesses like our energy business, for example. I’m sure you must see the swing. And part of

David, CEO, Sabangi Holdings: that swing comes from the simple fact that there

Moderator: is a very serious difference between CPI and DTI, where we use CTI for IFRS and DTI for statutory accounting purposes, which impacts the bottom line to deferred taxes. So this is the backdrop for, let’s say, for what’s been happening in 2024. And in this backdrop, if I walk you through the next page, basically from a 50,000 feet point of view, our combined revenues were up by 6%, EBITDA is down 34% and net income, and we’ve got net loss from net income between 2023 and 2024. So here as I was referring to a bigger part of our business obviously is Aflanc. And just like any other banking, the banking sector, Aflanc is adversely affected by this inflation program, certain restrictions on the banking sector in terms of credit growth and etcetera.

And obviously, monetary losses that is bottom line. Needless to say, in addition to which, as I’m sure you will remember, the banking sector still pay virtually the higher taxes based on their non inflation accounted results. So that’s well concluded in our bottom line that’s a little bit of extraordinary for this year. If you look at the non banking side of the business, we see some revenue contraction by about 12%, but a much slower EBITDA contraction. In fact, we’ve seen EBITDA margin increasing just under 100 basis points throughout the year.

In fact, except for the Material Technology segment, all of the our business segments have posted positive EBITDA margin expansion in the year. And the Material segment is mainly driven by what’s happening across corporate global markets. And I’m sure if you listen to our friends in Khoso, you must have heard how they are now in the process of rearranging the business to be more competitive for you forward basically. If you look at the bottom line again, I will just reiterate the fact that the SEK 4,300,000,000.0 non bank net loss you see on consolidated level here, there’s SEK 5,600,000.0 monetary losses only incurred by the only company, which is driven by A, the cash that we hold and B, obviously the fact that our equity is quite strong, which results in this balance sheet position. As far as the impairment piece is concerned, I see that there are some references to that.

Again, there are as usual in a year like this, inventory segments and etcetera, but the biggest part is coming from our credit flow business, our cybersecurity business. I think that’s to the tune of $22,000,000 20 4 million dollars And

David, CEO, Sabangi Holdings: that’s mainly driven by the fact that

Moderator: given the data incident that started at the end of twenty twenty three, You may remember this was an Israeli based business. Of course, there is an impact on that business because of what’s been happening throughout 2024 basically. And just from the prudency point, we wanted to make sure we reflect that and also our bottom line for this year. Hopefully, going forward, we now have a stronger base to continue building not only the Radiclobe business, but this other businesses as well. And as you may remember and throughout the year, if I can take you to the next page, what I

David, CEO, Sabangi Holdings: told you was, I’m going

Moderator: to show you again that on a quarter by quarter basis, our non bank operating performance have been improving and this you see is our last quarter, the fourth quarter of the year. But on a consolidated level, you see a 9%, a combined, sorry, a 9% revenue growth, is just under 40% EBITDA contraction and again from a net profit turn to net losses in The Caribbean. If we look at the non bank side though, we’re seeing a four percent revenue contraction and a 76% EBITDA improvement. In fact, our EBITDA margin on the non bank business has expanded by five sixty five basis points in the quarter basically. And overall, as we were discussing, if you look at the last quarter again, by their preference, we are looking at more or less TRY 1,000,000,000 of impairment and about TRY 1,000,000,000 of monetary losses incurred by the holding company against the 700 give or take TRY $682,000,000 losses that we incurred.

So they’re not show, but we believe our non bank businesses are in very good shape operationally. But they have been improving performance quarter on culture. From the banking side, as I said, 2024 was an exceptional year from the distillation program in place. And hopefully, as the program continues and bears with fruit, in our view, interest rates come down and those macro prudential measures are obviously, we would be in the best position to continue delivering across all our business segments. On the next page, what we wanted to demonstrate to you about actually what we told you throughout the year on quarter basis are the land bank business operating performance has been improving.

As you see, we have reached a 13% EBITDA margin in the last quarter of twenty twenty four. And on the right hand side, you see the net losses incurred during the period in every quarter. And you see that majority of that is coming from the monetary losses that are incurred by the holding company only. There are obviously monetary gains and losses holding, the reason why we want to demonstrate this to you is obviously not necessarily part of the operations, which nevertheless impacts the bottom line. We believe that our operating performance has been satisfactory and which will really touch us in a very good place to capitalize on any improvement in the environment in 2025 and forward.

Now on the next page, one of the reasons why we have this conviction is how we have been able to improve our cash flow generation. There’s a very big difference between the first half and the second half of the year. We see that partly driven by our ETA performance and partly driven by our working capital performance. And yet our bottom line is negative and therefore, our return on equity has come down significantly from both banking and non banking businesses. Again, we feel we are in a very good position to build on in the coming periods.

On the next page, you see we have been able to manage a very healthy balance sheet through the year. As you remember, there has been, as you see, some increase in our CapEx levels. We’re now at 13.5% just under our guidance on the midterm, which was 14%. Now we see some major elements in there was the acquisition of Monok with an EV over million. She’s a % by her own resources and also Nesa, returns with generation capacity expansion.

As you will remember, returns expanding its capacity by another gigawatt of wind and seven fifty megawatt of which is already funded about $2,000,000,000 that went into our financials. And this will still be on a very healthy balance sheet. And obviously, our cash position on the Banjo holding level, which is right from 1,000,000,000 Turkish lures, just under $250,000,000 Unfortunately, Vezon and contributes to this monetary losses, Kapteumet gives us together with our balance sheet a very healthy room to continue investing behind our strategic growth. On the next page, our NAV has grown at about 16% in dollar basis. And then you see again the energy and climate piece now has become quite comparable to the banking financial services.

But this year, as you may have guessed, given the EBITDA, almost obviously, it’s more help and help meaning we had generated out of EBITDA for non bank businesses this year, which obviously is reflected on to our NAV composition. We still have an effective discount. I mean, as of yesterday, it was 34%, although you see by the February, it was 45%. This, as some of you may remember, went as low as under 20% back in 2022. But as we grow especially our non listed businesses by value, obviously, it’s a positive challenge for us to continue making sure that we close the web and expand it again.

So with this, I’ll turn it back to Kerat. Thank you very much. Let me begin with the bank. And just bear in mind, banking numbers presented on page are based on DRC Financials and it depends on the results from Resideo Bank. Outfront’s expertise in flexible balance sheet management along with its adaptation ability to tight regulatory environments as well as sustained fee performance continued to underpin its profitability in 2024.

Despite sector wide headwinds including high volume rates and market pressure restrictions, Arktakers has maintained Kledger’s relief commitments to enhance its recurring revenues and ensure sustainable profitability. While identifying areas of sustainable growth, Hart maintains prudence in risk management and cost control. Technical customer business was $15,500,000 up 72% over the last three years with $6,100,000 net active customer growth. This growth has solidified the bank’s market position and has set a strong foundation for long term business. Moreover, that plan’s overall success in customer acquisitions contributed to an improvement in the fee to tax ratio, which improved by 20 percentage points since 2022 to 68% achieving to get even a higher quarterly figure of 92% due to less coverage, thanks to full time higher fee chargeable customer fees and strong offsets.

Novent managed to expand its footprint in retail segment containing market share, especially in products credit payments, and boost margin while it can be metuities. As I mentioned earlier, I think lower maturity consumer loans while as strategic segment, its position in mortgages are gaining $600,000,000 per share and build a sole position in local maturity businesses companies. All these are expected to be supportive of margin evolution going forward. While rolling, Altair continues to manage its risk in a prudent manner with AI based and automotive loan decision process. Additionally, with our total capital efficiency ratio of 17.8% and Tier one ratio of 18.1, Accel continues to maintain a solid capital structure providing the copper against market volatility and challenges ensuring critical resources for sustainable and profitable growth.

Strong capital position, runs back to current sheets to prosper in the situation environment along with the low Tiago’s low expectation of 82, focus considerable potential for margin improvements leading FEMRE and As we control our largest non bank segment Energy, in generation business, the company achieved a 6% year on year increase in revenues in Q4 twenty twenty four, mainly driven by higher generation volumes, also led to an improvement in EBITDA volumes of Q4 ’twenty three. Despite the strong EBITDA, lower bottom line was mainly driven by a higher pace from fixed incentives and evaluation effects recorded in the previous year along with impairments reported last quarter. Decline in revenue and profitability for the full year is attributed to lower electricity prices as well as declining trading activities in the current markets, which were less efficient and was stable compared to fifty years. Please also note that combined with Iqra, which was recorded at $11,000,000,000 or $311,000,000 in 2024, includes synthetic cash in this presentation. Excluding this reversal impact, EBITDA was realized at $462,000,000 in 2024.

With regards to Energy, operational earnings in distribution business increased by 6% year on year as of end of twenty twenty four, mostly driven by higher financial income and capital expenditures. Commercial earnings in customer solutions segment has significant growth compared to last year, mostly driven by increasing some projects. Yet, retail segments, Nutrition and Earnings expected to be declined and dropped by 25% year on year due to lower sourcing costs in non regulated and driven life segments. In 2024, investments stood at $15,500,000,000 in line with full year targets. The result on the line getting from decline to 4,200,000,000.0 TL on a year on year basis, which is in line with guidance.

Guidance. Job in annual profitability compared to this point two, lower earnings contribution from the retail activities and increasing financial expenses from higher debt and interest rates. On Material Technology segments, our ability to shift between export and local markets enables us to keep sales volumes favorable at quarter rates. However, lower inflation pricing in domestic markets continue to put pressure on the warmer summer areas, while pricing environment in export markets continues to be competitive. Suez volumes entirely across the regional resilience may increase competition from lower cost expenditures.

This type of sales volume due to delayed in demand recovery. Statement’s 4,000,000 declined 12% despite Jens and Kailash performance in Q4. This EBITDA in final quarter was lower year on year mainly due to one of the acquisition expenses, impacting since the EBITDA a deep possibility in tire reinforcement and composites driven by ongoing price competition in the car and smartphones. So in advancing results with the slow downwind and the late recoupling composites. Discrepancy between inflation and devaluation also took more competitive performance.

Net cost in Q4 driven by higher deferred tax expenses in the plant business together with full operational profitability in the profitability in the Allied Composite’s Muse and Composites. While that amount of acquisition contributes approximately million to the 19% introduction and million to the net profit of Chinchas finance. Despite declining commercial volume in replacement and OEM. However, it maintained its strong market share, particularly in replacement and growing market share in OEM markets that has contracted slightly consumer and commercial segments. However, as brand revenues declined by 5% year on year to impact the price pressure from lower commercial and full retail sales volumes compared to last year.

While EBITDA remained flat, EBITDA margin improved both on a quarterly and manual basis, thanks to favorable raw material prices, lower EBITDA fuel costs and reduced fixed costs. This segment taking some of the impact of our higher financial expenses due to increased operating costs. Financial services shipments especially adjusted top line slightly dropped by 5% on a year on year basis, primarily driven by non Life business. The segment EBITDA increased by 29% compared to previous year, driven by the significant contribution from the Life business. This contribution came mainly from the long term Print Life product and ROP.

The strategic key for the non Life business is to maintain long term and single growth without impact compromising capital depreciation, which also resulted in lower premium generation in the short term due to maximizing profitability with a focus on high margin segments. Financial Services segment’s net income contribution turned positive in the last quarter to higher interest income in both Life and LimeLife businesses. Moreover, in the context of Education Currency, there is a difference between the impact of deferred income reserve accounts, which contribute positively to the right to this net income through technical profit and pension business was hitting the impact of monetary losses. It’s worth noting that our life company has targeted its leadership position in non private companies in terms of asset under management and private questions and corporate involvement as well as gross written premiums in life and personal activities. Segment revenues dropped by 5% year on year in the last quarter, but despite more market slowdown, sales increased 2% year on year from an annual basis.

Pexcel’s successful execution of the omni channel strategy and strong focus on digitalization and digital systems, care. Gross merchandise value is currently 10% year on year due to intense market competition and positive to focus on commercial strategy. For the fourth quarter, EBITDA recovered strongly to exit pay freeze factor and previous quarters. Margin expansion is also notable based on all weight cost optimization expected in margin estimates. Despite significant improvement in margins, the segment’s net income has been impacted by higher credit service companies as compared to higher interest rates compared to last year.

And finally, Retail, the segment achieved 3% year on year pipeline growth, while EBITDA increased strongly by ongoing restructuring efforts. However, high financial expenses continue to weigh on profitability, resulting in the net loss. Let me read the floor again, Karl Simojekay from Codrington. J. K?

David, CEO, Sabangi Holdings: Thank you, Karl. Yes, we are coming to the end of our call today. Overall, 2024 was a challenging and transitionary year for us. I guess 2025 is the old strategical year, especially in the first six months. This inflation program should continue consistently to attract foreign interest, which is a network particularly important to us in the context of preferential IPO preparations.

Yes, we are aware of the headwinds to grow in to share, but there are some encouraging factors to fund the result. In the banking sector, credit growth seems to gradually expand as the net interest margins are improving. In the energy sector, electricity prices for high consumption households in Turkey have been liberalized, very positive improvements. Specific to Sabangi, I believe our P2P dominated portfolio is poised to maintain its competitive cash even in an economic slowdown, taking us apart from consumer businesses. In The U.

S, our second solar project Orianna is scheduled to commence operations in the first half. The full year impact of Manok will be reflected in our consolidated financials in 2025. Our strategic investments, particularly in the digital sector will continue. And finally, it is crucial to emphasize that long term success is much more important than the short term results for us. As a group, we are committed to our mid term guidance including many critical details such as investment areas, expected returns and other key metrics.

We are in the process of transforming the portfolio to a more balanced structure between rent and non bank with a stronger focus on energy and digital businesses and we are confident that we will continue to demonstrate our strong track record of execution thereby increasing shareholder value. I would like to thank also our new group management teams for their efforts and our work for their support that T and A will ask to deliver to this dynamic environment. I will stop here and open the floor for Q and A. Thank you, Anasti.

Moderator: Thank you, everyone. Now we are in the presentation with this question. Thanks for the presentation. What is your forecast for this to increase the prices in 2025? Additionally, how sensitive is the generation of changes in these and increase the prices?

Thank you, Hansard Daniel. Well, I think in the market, so over the long term, the electricity prices should be between $70 to $80 At the highest back in 2022, they reached over $100 if I’m not mistaken under $2.25 and at this lowest, we’ve seen them as you may remember less than $60 I think in 2025 at this point in time, it’s not useful to assume anything other than what the long term trend could be. That would be first. And given, having said that, secondly, obviously, I’m sure that you must be aware that there has not been any tariff hikes in the first quarter. And there’s a possibility that the regulator may skip the second quarter also potentially market balancing within the high season.

So we’ll see every year has its own, let’s say, impact. Now this obviously, the hard part impacts the Edite performance of Kriten. But But not only that, as you remember, we talk about this from time to time. The hydrology is an important factor, how the AAV will pass. Wind vision can become an important factor.

And more obviously, again, the overall electricity demand is an important factor. So we see how the year progresses. As we discussed the last time as well, specifically on Zalen, we were asking about EBITDA generation of Q3 twenty twenty four has shown us what the business could deliver in a year where there is hard cap now some optimal growth, if I may say so, given the GBV has grown less than 5%, I think that could be given as a benchmark in that sense. The second question, can you please provide more details on hedging effects on Energy’s generation company results? What is the EBITDA in 2023 disadvantaging?

JP also already have 2023 EBITDA without Tejig in the presentation.

David, CEO, Sabangi Holdings: Look, I think it’s, a lengthy question.

Moderator: It’s an ongoing process, obviously, because we, on our side, given the fact that we talk about electricity prices in Turkey, measured in dollars, dropped out in dollars. We always look at the performance of the business in dollars as well. So as a Turkish business, so there is always an ongoing hedging vis a vis FX That’s always in place basically. I think if you look at the, if I’m not mistaken, the tendencies of our announcement, you’re going to see what it looks like on purchase order basis without hedging and then you’re going to see the dollar impact since there’s no hedging because there’s no fixed risk. I think in year on year, you could see those changes taking place.

As far as we’re concerned, when we’re communicating with you, we always refer you to the dollar to dollar, let’s say, numbers. You may assume either you end up with adding back the impact of switching or the dollar change from one year

David, CEO, Sabangi Holdings: Uh-huh.

Moderator: In the Q and A session

David, CEO, Sabangi Holdings: of the Zoom. Thank you.

Moderator: One question. What should the export to do yet? Do you expect an upgrade impact from tariffs?

David, CEO, Sabangi Holdings: As well in Mano, you are very lucky, the General Manager of Chimpsa. Umut is here with us. So let me give the word to Umut. Hi, everyone. Yes, Sysra will export to U.

S. Twenty Twenty Five and 2026. As you know, we are exporting to clinical to United States. We have a grinding in Houston If Turkey or the other companies will be affected, the tariff probably will be imposed on the finance product demand. But we will be exporting linter to this region, so we will not be affected.

So having an operations, grinding operation in U. S. Is quite advantageous for us.

Moderator: So next question is could you please give us more detail on the impairment in Q4? Yes, Abyde. Let me try to help with that, this August meeting. I think it has to be about 1,000,000,000 TL of 1,400,000,000.0 total of affiliates coming from the nonbank piece. On the banking side, these are usually customer impairment that takes place throughout the year, so nothing specific.

On the non bank side, as I said, the biggest part comes from our cybersecurity business credit flow. I think this was of course $24,000,000 and that means about 80%, eighty five % of the non bank fees. You may remember again the first is for education, but this is an Israeli business that was acquired back in 2023, obviously, when this Gaza incident has taken place at ’22 acquired, sorry. And the incident, Gaza incident took place at the end of twenty twenty three. We see there was some instructions in the business because all of our people were called military in the first place.

And throughout 2024, that has continued. So from a prudency point of view, we reflected that impact as impairment on the financial statements in 2024. Now obviously, again, going forward, there’s there could be upside to this business, but from a prudency point of view, we want to make sure experience in 2024 has been reflected on financial statements. I hope this helps. Thank you, Omidy.

Another question, could you please give a color on clarinet with the latest type of investments on the chip description?

David, CEO, Sabangi Holdings: Let me take that question. This is Cenk Airta.

Moderator: Two

David, CEO, Sabangi Holdings: axis. On one axis, we continue to develop partnerships or consortiums with the potential customers hyperscalers. We have significant progress over that. On the second dimension, we are actively completing our feasibilities on couple of projects in U. S.

And in Turkey. When they are successful, hopefully, we will be able to share this with you. But as I have explained in London to you, this is a concrete solid development sector for us, having lots of synergies with our energy business and to be our merchandise. So hopefully in 2025, you will be hearing from us complete solid investment decisions.

Moderator: Thank you, Jitsi. It seems there are no further questions. Thank you for joining and have a great day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.