Ford Otosan reported a net profit of TL8.4bn in 3Q25, down 26% y/y and 10% above market expectations. During this period, it recorded a tax expense of TL1.6bn (3Q24: -TL1.9bn) and announced a net monetary gain of c.TL3.0bn (3Q24: TL7.1bn).
Sales revenues remained flat y/y and realized at TL189.6bn. While export revenues showed a flat trend y/y, domestic sales revenues increased by 1% y/y. Share of export revenues in total sales was realized as 79% (3Q24: 79%). Export sales volume rose by 3% y/y to 139.3k units, while domestic wholesale sales increased by 15% y/y to 29.7k units. Thus, total sales units increased by 5% y/y. In 9M25, the capacity utilization rate was 73%. Gross margin declined by 130bps y/y to 8.2% in 3Q25 mainly due to competitive pricing environment, increasing export revenues share in total, higher proportion of EV’s in production, impact of inflation accounting on inventories and its impact on cost of goods sold. Analysts' EBITDA down by 9% y/y to TL11.7bn, in-line with expectations (Company EBITDA: TL14.0bn), while EBITDA margin stood at 6.2% (Comp. EBITDA Margin: 7.4%) (3Q24: 6.9%). That said, the Comp. EBITDA per vehicle was realized at EUR1.705 (3Q24: EUR1.852). As of the end of 1H25, the debt figure of TL97.4bn remained stable q/q basis and stood at TL97.8bn. Net debt/ EBITDA ratio was ended at 2.1x (1H25-end: 2.0x). Based on the investment cycle and dividend distribution policy, we consider the debt level to be reasonable. We also view the cash flow from operating activities of EUR1.5bn in the 9M25 period positively.
The company revised its 2025 guidance. Accordingly; (i) Total automotive market 1.3-1.4mn vehicles (old: 1.05-1.15mn vehicles) (ii) Ford Otosan domestic retail sales expectation 110-120k (old: 90-100k vehicles) (iii) Total export sales 590-640k (old: 610-660k vehicles) < Turkiye 390-420k (old: 410-440k vehicles) - Romania 200-220k > (iv) Total sales to be in the range of 700-760k (v) Total production between 680-730k (old: 700-750k vehicles) < Turkiye 440-470k (old: 460-490k vehicles) - Romania 240-260k >. Ford Otosan revised CapEx target as EUR450-550mn (old: EUR600-700mn). Lastly, it maintained high single-digit revenue growth in 2025 and expects EBITDA margin in the range of 7-8% (The company's 9M25 EBITDA margin: 8.1%).
As a reminder, thanks to its export structure and increasing production capacity, Ford Otosan is the automotive company that will be least affected by Chinese brands' factory investments. Under the Ford-VW strategic partnership, with the start of VW's 1-ton commercial vehicle production, the total capacity of the Yenikoy plant reached 405k units, while the Craiova plant's capacity increased to 300k with ongoing investments. Thus, Ford Otosan's total production capacity stands at 934.5k units. The E-Transit Courier and New Puma Gen-E began production at the Craiova plant as of 2Q25. We believe that macroeconomic developments in the UK, Western Europe, Germany, Italy and France, the main export markets, should be closely monitored.
Rating maintained at “Outperform” and we kept our TP with TL140.00/share. The share trades at 5.5x EV/EBITDA and 5.9x P/E multiples based on our 2026e
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