Net Profit for Turkey's Tupras Up 56% in Third-Quarter 2012, Beats Estimates

---

Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's sole oil refiner, Tupras (Istanbul, Turkey), posted $307.7 million net profit for the third quarter, above the market estimate of $265 million. The company, which is owned by Turkey's largest conglomerate Koc Holding (Istanbul), reported its strongest quarterly earnings of the past four years. Tupras generated $7.16 billion in revenues, up 5% from third-quarter 2011. Also, the company reported $372 million in earnings before interest, taxes and amortization (EBITDA), down 13%.

The company ramped up capacity utilization in the third quarter to 86.2% and achieved 9% production growth from the same period last year. The revenues have grown 5%, driven mainly by exports. For more information, see August 31, 2012, article - Tupras's Quarterly Profit Down 47% to $75.4 Million on Weak Margins.

"Despite being lower than last year's record high level of $8.20 per barrel, Tupras' net refining margin stood strong in the third quarter with $5.91 per barrel. Strong refinery margins and financial income performance resulted higher-than-expected numbers in both net income and EBITDA," said Vedat Mizrahi, an analyst at Deutsche Bank based in Istanbul. "We think that third-quarter results could lead to upward earnings revisions by the consensus, which could be supported by the strong trend in refining margins so far in the fourth quarter."

Tupras has a waiver over sanctions imposed by the U.S. government on purchases of Iranian oil. Turkey was granted a six-month exemption in June after Tupras pledged in March to cut its Iranian oil purchases by 20%. The waiver is due to expire in December, but it can then be renewed by the U.S. government. If the waiver isn't renewed, then the company would cut its exposure to zero to avoid breaching sanctions. In 2011, 47% of Tupras's oil purchases came from Iran.

Washington and Brussels have coordinated sanctions on Iran's oil exports, causing Tehran to lose $15 billion in export revenues every quarter, according to U.S. Foreign Ministry officials. For more information, see October 17, 2012, article - EU Extends Grip on Tehran with New Sanctions.

The company sold 5.5-year Eurobonds and raised $770 million on last month, with a risk premium of 337 basis points over U.S. Treasuries. Tupras is rated Ba1 by Moody's Investor Service, a ratings company.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.