This article first appeared on GuruFocus .
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Combined Revenue:Exceeded TRY2.7 trillion (~$58.8 billion), a 7.2% year-on-year growth.
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Consolidated Net Income:Increased by 147% to TRY20.3 billion.
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Profit Before Taxes:Reached approximately TRY84 billion, a 154% increase year over year.
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Capital Expenditures (CapEx):Approximately $1.7 billion in the first half.
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Holding Level Net Cash:Approximately $1 billion, with gross cash at $1.6 billion.
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Current Ratio:1.25 times on a combined basis.
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Net Financial Debt to EBITDA:1.1 times, including the Finance segment.
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Energy Segment Net Income Contribution:TRY20.7 billion, the largest contributor.
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Automotive Segment Net Income Contribution:TRY3.4 billion.
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Finance Segment Net Income Contribution:TRY2.2 billion.
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Consumer Durables Segment Net Income Contribution:TRY421 million.
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Net Refining Margin (Tupra?):Reached $15.6 per barrel in the first half; full-year expectation revised to $13-$15 per barrel.
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Yap? Kredi Net Profit:Increased 36% year on year in BRSA financials, with return on tangible equity at 23.4%.
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Yap? Kredi Net Interest Margin:Expanded by 68 basis points year to date to 2.9%.
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Yap? Kredi NPL Ratio:Reached 4.3%, with total coverage at 4.1%.
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Yap? Kredi Capital Adequacy Ratio:14.4% consolidated, with CET1 at 9.4%.
Release Date: August 05, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Koc Holding AS ( KHOLY ) reported a 147% increase in consolidated net income, reaching TRY20.3 billion in the first half of 2026.
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The Energy segment delivered outstanding performance, contributing TRY20.7 billion to net income, driven by strong refining margins and high capacity utilization.
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Koc Holding AS ( KHOLY ) maintains a strong balance sheet with approximately $1 billion net cash at the holding level and a conservative leverage ratio of 1.1 times net debt to EBITDA.
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The company is actively optimizing its portfolio through strategic actions, including acquisitions, divestments, and partnerships, to enhance focus and operational efficiency.
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Yap? Kredi's net profit increased by 36% year-on-year, with a return on tangible equity of 23.4%, supported by strong net interest margin expansion and fee income.
Negative Points
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High interest rates and tight financial conditions in Turkiye are constraining domestic demand and elevating financing costs for firms.
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The continued real appreciation of the Turkish lira is a headwind for export-oriented sectors, negatively impacting profitability.
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The Turkish automotive market contracted by 8% in the first half, with TurkTraktor's domestic tractor sales volume dropping sharply by 61%.
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Arcelik's revenue performance is impacted by soft demand, pricing pressure, and unfavorable product mix, with international revenues declining by 11%.
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Yap? Kredi's asset quality deteriorated, with the NPL ratio rising to 4.3% and cost of risk materializing at 201 basis points in the first half.
Q & A Highlights
Q: What is the plan to reduce the high leverage ratios at Arcelik and Otokar, and would Koc Holding consider acquiring Arcelik's real estate assets to help it meet its covenants? A: Dogan Korkmaz, CFO: Otokar's quarterly performance is inherently volatile due to the timing of military vehicle deliveries, which are on track per contractual milestones. The recent capital injection of around $30-35 million is an interim measure while they secure new contracts. For Arcelik, management is focused on cost optimization, procurement savings, working capital management, and capturing integration synergies. While the Whirlpool settlement positively impacted profitability, it didn't affect cash. Arcelik has plans to utilize its vast land portfolio, and the base case scenario does not involve Koc Holding taking over the land. They have better alternatives with project companies, and we are following their announcements closely.
Q: With Koc Holding's net cash position at almost $1 billion, how will you prioritize capital deployment between acquisitions, increased stakes, organic investments, and shareholder returns? Would you consider a buyback given the elevated NAV discount? A: Dogan Korkmaz, CFO: Our top priority remains reinvesting in our existing businesses to support growth and long-term value creation. In the current volatile environment, we view our cash position as a strategic buffer for flexibility and resilience, allowing us to act opportunistically on attractive investments. We continue to evaluate new opportunities in a disciplined manner. A buyback would be a tactical decision and not the first choice for deploying cash.
Q: What are the most likely pathways to crystallize the value of Koc Holding's $2.5 billion unlisted portfolio over the next three to five years? Should investors expect more active portfolio monetization? A: Dogan Korkmaz, CFO: Recent activities are driven by the strategic plans of our companies to expand their reach and improve offerings, sometimes through alliances. While some parts of our subsidiaries may be more valuable than market pricing suggests, and we might choose to crystallize that value, this never goes ahead of our strategic targets within that sector. It's an ongoing process of investing in new areas and divesting parts of operations to fund new business areas, typically managed within the sector by the respective company management.
Q: Could we expect to see further asset sales from Yap? Kredi in the period ahead, similar to the recent asset management deal with Azimut Holding? A: Dogan Korkmaz, CFO: It's an ongoing effort to transition towards the needs of customers. If there are parts of the bank where doing the job itself doesn't make sense and there are better providers, the bank considers those opportunities. The bank's management is on a constant transition to stay at the forefront of the sector. I wouldn't be surprised if you hear more from Yap? Kredi about their transition to be more successful and serve their clients best.
Q: Can you elaborate on the financial performance of the Energy segment, which was the largest contributor to net income? A: Helin Celikbilek, IR Coordinator: The Energy segment's contribution to consolidated net income was TRY20.7 billion in the first half, compared to TRY4.9 billion last year. Energy markets were highly volatile due to geopolitical tensions, supporting strong product margins. Tupra? delivered strong operational performance with 95% capacity utilization and a first-half net refining margin of $15.6 per barrel, revising its full-year expectation to $13-$15. Aygaz delivered 2% volume growth, strengthening its market leadership with a 27.3% share.
Q: What were the key drivers behind the 147% increase in consolidated net income, and what was the impact of the corporate tax rate revision? A: Dogan Korkmaz, CFO: The significant increase in net income to TRY20.3 billion was driven by the strong performance of the Energy segment, followed by Automotive and Finance. The downward revision in the corporate tax rate starting from 2027 for production companies positively impacted our bottom line through deferred tax calculations in IFRS accounts. Other segments were dilutive, mainly due to monetary losses from inflation accounting on the holding's net cash position and seasonal operating losses in retail and healthcare.
Q: How did the Automotive segment perform in the first half, and what is the outlook for Tofa?'s exports to North America? A: Helin Celikbilek, IR Coordinator: The Turkish automotive market contracted by 8% due to high interest rates. Despite this, our combined market share increased to 33%. Ford Otosan accounted for 33% of total vehicle production, and our export market share increased to 51%. Tofa?'s export volume more than doubled, and exports to North America are expected to commence later this year. Investments for the K9 model remain on track, with first shipments scheduled for October.
Q: What is the current state of Yap? Kredi's asset quality and capital position, and what is the expected impact of the Azimut transaction? A: Helin Celikbilek, IR Coordinator: Yap? Kredi's net profit increased by 36% year-on-year, driving return on tangible equity to 23.4%. The NPL ratio increased to 4.3% due to the tight macroeconomic environment, but the bank maintained conservative provisioning with total coverage at 4.1%. The capital adequacy ratio was 14.4% and CET1 at 9.4%. The sale of its asset management business to Azimut at a $425 million valuation is expected to contribute approximately 70 basis points to Yap? Kredi's CET1 ratio upon closing.
Q: Can you provide more details on the strategic actions taken across the group to strengthen focus and improve efficiency? A: Helin Celikbilek, IR Coordinator: The first seven months were active with portfolio optimization. Arcelik announced its exit from the Hitachi JV and acquisition of the remaining stake in Beko Europe. Ford Otosan acquired Kocfinans, and Otokar acquired Romania-based Automecanica. At the holding level, we monetized a 2% stake in Tupra? and acquired the remaining 20% of Kemer Medical. We also established a Healthcare Group and Yap? Kredi announced a strategic transaction for its asset management subsidiary.
Q: What is the significance of the unlisted assets in Koc Holding's portfolio, and how should investors
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
