Bloomberg News

Alarko Rises as Quarterly Results Beat Estimates: Istanbul Mover

August 31, 2012

Alarko Holding AS (ALARK), a Turkish conglomerate with interests in construction and energy, jumped the most in six months after beating profit estimates.

The shares climbed as much as 5.8 percent, the most since Feb. 24, to 4.01 liras and traded 5 percent higher at 3.98 liras as of 2:32 p.m. in Istanbul. Alarko has gained 31 percent this year, compared with a 30 percent rally on the Istanbul Stock Exchange National 100 Index.

The company reported a profit of 34.2 million liras ($18.8 million) in the second quarter, beating the average estimate of 22 million liras from three analysts on Bloomberg. The stock was upgraded to buy from hold at EFG Istanbul Securities and to an equivalent rating at Ekspres Invest.

The deviation “stems from our underestimation of the operational improvement in the contracting segment” and “the positive seasonality effect of the electricity distribution business,” EFG analysts Alper Akalin and Sinan Goksen said in an e-mailed report today. EFG had forecast earnings of 20 million liras, according to the report. “Overall, second- quarter results are quite positive and highly promising.”

The Istanbul-based conglomerate’s shares trade at a 48 percent discount to the combined companies’ net asset value, according to the analysts, making them “overly punished compared to our fair net asset value discount of 30 percent.”

Alarko shares have an enterprise value to current earnings ratio of 3.78, compared with a sector average of 7.17, according to Bloomberg data comparing them with 14 global peer companies. The company’s price-to-earnings ratio is 8.44, compared with the average among peers of 9.95, according to the data.

To contact the reporter on this story: Benjamin Harvey in Istanbul at

To contact the editor responsible for this story: Gavin Serkin at

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