EM CEEMEA CREDIT: Anadolu Efes: Q3 25 results, encouraging!
(AEFES: -/BB+neg/BB)
- Credit neutral, we view the results as encouraging, with volumes and pricing continue be under pressure, but margins seem to be bottoming.
- Q3 beer volumes -4.9% y/y to 3.9mhl on a proforma basis. Domestic volumes in Türkiye were -8.4% y/y, due to a weaker consumer sentiment and tourism. International operations were -2.1% during the quarter. Georgia and Moldova were softer, partly offset by Kazakhstan.
- Top line for the beer business was -6.9% y/y at TRY15.75bn. Türkiye revenues declined 8.7% y/y while international operations were slightly better than domestic at -4.5% y/y. Gross margins were 236bp weaker on a y/y basis at 49.7%, but we note they were 60bps higher vs Q225, which is encouraging. EBITDA was slightly higher at c.7% on a q/q at TRY 3.44bn and FCF for the quarter was TRY821mn on a proforma basis and net debt to EBITDA was broadly flat around 3.7x.
- Note CCI (soft drink business 50.3% owned and consolidated) reported yesterday (see link for full analysis: https://mni.marketnews.com/4oT8xUk ) and the Russian business has been deconsolidated.
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FED: Miran Doesn't See 'Third Mandate' Having Influence On His View
Q: So I want to continue on the topic of long term rates. What can the fed do to influence long term rates to the extent that you believe that that's a goal?
Miran: I have a personal preference for completeness. And so when I'm trying to sort of analyze a problem, I tend to sort of list everything that I think could possibly be relevant. And this gets me into trouble sometimes, as it did last year in that trade paper that I wrote in which I listed every policy in the world that I could think of as possibly affecting the external accounts. Earlier this year at my testimony in front of Congress for the confirmation hearing, I literally just read out the Federal Reserve acts tasking of the Fed's mandate, which is stable prices, maximum employment and moderate long term interest rates. I wasn't trying to reinterpret the Fed's monetary policy framework in doing so. I was just being complete and caring about democracy and the rule of law and what Congress is actually tasked the fed with. Now, most people tend to think that moderate long term interest rates will just naturally fall out of achieving stable prices and maximum employment. And I agree with that. I think that makes a lot of sense. So I think that moderate long term interest rates is something that Congress tasked the fed with.
Q: Is the third mandate at all influencing how you're thinking about policy right now?
Miran: No it's not. I think most people think that achieving moderate long term interest rates will naturally come out of achieving maximum employment and stable prices. I agree with that. I could imagine there being sort of tail scenarios of the world in which that's not the case, but I don't think that any of those tail scenarios are remotely describing a reality that I see now or that I would expect to see.
