Tofaş Still Growing, Profit Decline Does Not Shock!

Tofaş's Third Quarter Performance

Tofaş announced its results for the third quarter of 2025. In its financial report, the company stated that despite the increase in sales and total assets, there was a noticeable contraction in net profit. It reached a total asset size of 146 billion TL, increasing by %68. However, alongside this growth, net profit decreased by %56, dropping to 2.93 billion TL.

Balance Between Sales and Profitability

Tofaş's gross sales reached 116 billion TL, while the gross profit margin fell from %12.67 to %6. The company's operating profit margin also turned negative. This situation arose due to the increased financing costs and monetary losses from exchange rate differences adversely affecting profitability. In the first nine months of the year, there was a %43 reduction in operating profit, which fell from 5.18 billion TL to 2.93 billion TL.

Increased Revenue, Decreased Efficiency

Tofaş's 2025/09 balance sheet highlights the process of growth in sales and shrinkage in profit. While total assets increased by %68 in a year, the growth in net sales reached %63. However, the EBITDA margin decreased from %9.8 to %2.7, reflecting the impact of rising production costs and weak capacity efficiency. Return on equity dropped from %20.5 to %6, a decline associated with the demand imbalance experienced across the sector and the increase in financing burdens.

Production and Export Strategies

Tofaş continues to maintain its locomotive role in the Turkish automotive industry in partnership with Koç Holding and Stellantis. Despite a %10.4 drop in export rates, strong domestic demand helps to balance production planning. The company plans to modernize its production lines for new generation hybrid models by 2025. Domestic sales reached 89 billion TL, while foreign revenues remained at 21 billion TL.

Financial Indicators and Future Expectations

Tofaş's market value stands at 134.5 billion TL in TL terms and 3.2 billion dollars in dollar terms. However, with the P/E ratio rising to 92.68, it is observed that the stock is trading at a high multiple compared to its current profit level. Nevertheless, the #Tofas shares have provided investors with a %55 return in dollar terms as of 2025.

In conclusion, Tofaş continues to pursue long-term growth objectives by leveraging its strong equity structure and increasing production capacity, despite decreases in profitability.