Leading consumer goods maker Arcelik reported a sharp rise in 2004 profit and beat its sales target as falling interest rates fuelled strong demand for its products, its results showed on Thursday.
Analysts said the fast-growing Turkish market for large domestic appliances was expected to slow down this year but Arcelik would offset this by focusing more on its exports markets.
Arcelik’s net profit rose nearly 70 percent to 293.20 million new lira in 2004, the company said in a statement. Analysts said the result was higher than they had forecast.
Net sales reached 4.91 billion new lira ($3.83 billion), up from 3.80 billion in 2003, exceeding the company’s own target of $3 billion.
The company’s shares were up 0.6 percent at 8.60 at midday.
Arcelik, part of Turkey’s leading industrial conglomerate Koc Holding, has a 50 percent share of the domestic market for white goods including refrigerators, washing machines and ovens.
Turkey’s white goods market grew 64 percent last year to 5.04 million units as a result of a sharp drop in inflation and interest rates as the economy continued to gain strength in the wake of a 2001 financial crisis, which caused a deep recession.
Analysts said the market was expected to grow 5 to 10 percent this year with Arcelik possibly achieving double-digit growth.
“We think that Arcelik will be able to increase its exports to compensate for a slowdown in demand for white goods in the domestic market in 2005,” said analyst Alev Bosuft from Garanti Investment.
“However there may be a weakening of the profit margin as the export margins are lower,” Bosuft said.
Another Koc Holding company, TV and white goods producer Beko Elektronik, has already made a name for itself in the European markets and Arcelik is expanding its share with its new Blomberg brand.
It said last July that it would invest 50 million euros ($66 million) in a washing machine plant in Russia, which is expected to begin production in 2006.
From Turkish Daily News
