Sabancı to invest in energy and retail
The confidence in global markets has been discredited due to a structural imbalance caused by the United States subprime mortgage crisis, said Sabancı Holding Chairwoman Güler Sabancı in a meeting to announce the holding’s 2007 results and expectations for this year yesterday.
“This crisis affected expectations, brought on pessimism and introduced a global deceleration and even a recession jeopardy. We should gain a new perspective for the future,” she said evaluating the financial outlook of 2007.
There is a liquid surplus in developed markets, said Sabancı, adding, “eventually this accumulated liquidity will be directed somewhere. Turkey should not miss out on that opportunity.”
EU integration process:
“Europe is a civilization path, we should remain focused toward this destination,” Sabancı said, speaking of Turkey’s accession process to the European Union.
“There is no time to waste,” said Sabancı, urging the implementation of legal and financial regulations, such as Social Security Law, Trade Law and Tax Reform. Regarding problems deriving from the unregistered economy in Turkey, “eliminating its causes is essential as well as implementing regulations,” she said.
Answering a question on whether the Turkish Armed Forces (TSK) operation in northern Iraq has affected Turkish domestic markets, Sabancı said, “I believe the proper action will be taken when the proper time arrives. As we have already seen, markets remain quiet and unaffected by the operation. Moreover, all that matters is security.”
Investment plans:
“We are both optimistic and cautious about 2008,” said Sabancı Holding’s Chief Executive Officer Ahmet Dördüncü. Sabancı Holding, which owns Akbank together with Citigroup Inc, is planning to invest $1.5 billion this year. About half of which will be in energy and retail, said Dördüncü.
“If nuclear plants are constructed, Sabancı Holding will be the first entrepreneur. We are investigating the market with great attention,” said Dördüncü.
The company is in talks with foreign companies on jointly bidding for a license to build and run Turkey’s first nuclear power station, said Sabancı.
Sabancı also has interests in supermarkets, cement and insurance. Sabancı may sell a stake in Aksigorta, Turkey’s biggest insurer by market value, while retaining control of the company, Dördüncü said. Aviva Plc, the United Kingdom’s largest insurer, paid $100 million to buy a 10.3 percent stake in Aksigorta last year and merged its Turkish unit with Sabancı’s.
Sabanci also runs a supermarket chain with France’s Carrefour SA, Europe’s largest retailer, and aims to invest $6.5 billion in energy projects over the next seven years with partner Verbund of Austria.
Last year’s sales:
Sabancı Holding sales increased 20 percent in 2007 from the year earlier, as Turkey’s economy expanded and lending at unit Akbank gained, reported Bloomberg.
About 55 percent of Sabancı sales came from Akbank, Dördüncü said. Net income at Akbank, Turkey’s second-largest company by market value, rose 29 percent to YTL 2.04 billion last year as consumer loan volumes grew by 43 percent, the bank said on Feb. 15.
Sabancı had sales of YTL 19.4 billion ($16.4 billion) last year, up from YTL 16.1 billion in 2006, said Dördüncü. “All of our companies are growing and our targets are from organic growth,” Dördüncü said, adding that Sabancı does not plan to grow by buying other companies.
Operating profit of Sabancı rose 23 percent to YTL 3.2 billion last year, Dördüncü said. The company aims to increase its operating profit to YTL 3.7 billion this year and sales by 12 percent to YTL 21.7 billion, he said.
Source: Turkish Daily News