Koc Holding A.S. Unsponsored ADR Class B (KHOLY) Q2 2026 Earnings Report

The call presented strong consolidated financial results driven largely by exceptional performance in the Energy segment and favorable deferred tax/one-off items, alongside solid holding-level liquidity and active portfolio optimization. However, several operating segments faced meaningful headwinds — notably Consumer Durables and parts of Automotive — with rising asset-quality and leverage concerns at certain subsidiaries and dilutive inflation-accounting losses in the Other segment. Management emphasized portfolio resilience, disciplined capital allocation and readiness to support subsidiaries, while pursuing monetization and optimization actions.

Management's forward guidance emphasized disciplined capital allocation and specific targets: Tüpras revised full‑year net refining margin to $13–$15/boe (H1 $15.6/boe) and capacity utilization stayed at 95%; holding liquidity is strong with ~ $1.0bn net cash and $1.6bn gross cash after a $600m club loan (first repayment April 2028), ~76% in hard currency and no near‑term debt service for almost 3 years; priority is reinvesting in existing businesses and opportunistic M&A (buybacks described as tactical), with H1 capex ~ $1.7bn; leverage and liquidity metrics remain conservative (current ratio 1.25x; net financial debt/EBITDA incl. finance 1.1x); H1 consolidated revenue was TRY 2.7tr (~$58.8bn, +7.2% YoY), PBT ~TRY 84bn (+154%), net income ~TRY 20.3bn (+147%); portfolio composition highlighted automotive 32%/finance 23%/refining 20%, ~31% of revenues international and ~50% hard‑currency linked, unlisted book value ~TRY 117bn (~$2.5bn); Yapi Kredi transaction (asset management sale implied ~$425m) is expected to add ~70bps to CET1, and bank metrics were: net profit +36% YoY, RoTE 23.4%, NIM 2.9% (+68bps), NPL 4.3%, cost of risk 201bps, CAR 14.4%, CET1 9.4%; other operational signposts include Otokar backlog €669m, Ford Otosan 33% of Turkey production/75% of commercial output and group export share rising to ~51% (up ~8pp).