AUGUST 12, 2021 8:00 AM

Sisecam halved net leverage in 1H21

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Sisecam (- / B2 / BB-) reported good first half financials. The company showed a significant improvement in financial performance compared to the previous year, thanks to higher sales volumes and an improvement in the range of products shipped, increased product prices, as well as the positive impact of exchange rate differences. In 1H21, the company's revenue increased by an impressive 45% yoy to TRY 12.7 billion. EBITDA actually increased by 85% versus 1H20 to 4.4 billion Turkish lira. EBITDA margin increased by 765 basis points to 35%.

YTM

4%

RISK

- / B2 / BB+

DURATION

3.9

As of the end of the reporting period, free cash flow turned positive and amounted to approximately TRY 352 million against a negative value of minus TRY 977 million in 1H20. Cash and cash equivalents increased to 14.9 billion Turkish lira. As a result, Sisecam's net leverage declined to 0.4x from 0.8x at the end of 2020 and 0.6x in 1Q21. The company's management states that 85% of free cash and cash equivalents, including short-term financial investments, are held in hard currencies. We like the only Sisecam Eurobond due 2026 (XS1961010987). The bonds offer a dollar yield of 4% with a duration of 3.9 years.

Türkiye Sise ve Cam Fabrikalari, or Sisecam makes a variety of glass products, including flat glass, glassware, glass packaging, and glass fiber. It also makes sodium and chromium chemicals. Customers for the company's flat-glass segment include major automakers, such as Ford, Toyota, and Hyundai. Its glass packaging is used by a variety of beverage makers, as well as by pharmaceutical and cosmetics companies. Under the mandate of the founder of the Turkish Republic, Mustafa Kemal Atatürk, Isbank founded Sisecam in 1935. Isbank  owns around 64% of Sisecam.