In line with the downward revision of the company's expectaƟons, we are lowering our target price from TL 34.62 to TL 27.14 and conƟnue to recommend buying with a 75% upside potenƟal.
Downward revision of expectaƟons. Current market condiƟons, high-variance capacity factors experienced at hydroelectric power plants, and producƟon levels hiƫng rock boƩom have led to a revision of company expectaƟons in line with changing feasibility studies for related projects. In this context, the installed capacity expectaƟon for 2028 has decreased from 1,202 MW to 1,197 MW, the revenue expectaƟon has decreased from $236 million to $218 million, and the EBITDA expectaƟon has decreased from approximately $167 million to $141 million.
Hydropower capacity factors played an important role in the changing expectaƟons. Hydro capacity factors, which have been quite volaƟle since last year, have suppressed the company's total electricity producƟon. Although the company's share of hydroelectric producƟon has decreased over the years due to porƞolio diversificaƟon, the company prefers to be more cauƟous in its expectaƟons. While lowering its producƟon esƟmates slightly, the company revised its forward-looking electricity price expectaƟon to $75.
The strong performance of the Turkish lira has put pressure on margins. The company's cost items are denominated in TL, while its electricity sales are denominated in USD, which has put pressure on margins. As a result, margins narrowed in the first quarter results, while revenue and EBITDA items remained below last year's levels in real terms due to inflaƟon exceeding the USD/TRY exchange rate. Similar margin levels appear to be maintained in forward-looking expectaƟons.
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www.isyatirim.com.tr (http://www.isyatirim.com.tr)
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