Lila Kağıt Targets Sustainable Growth

Lila Kağıt, Turkey's leading hygiene tissue manufacturer, announced its third-quarter 2024 financial results, ongoing investments and developments following its public listing. Lila Kağıt Chief Executive Officer Alp Ögücü stated that the company will continue making unconventional investments in the new period.

Exporting to more than 80 countries across 5 continents worldwide and one of the largest players in the tissue sector with the Sofia, Maylo, UltraBerrak and Nua brands, Lila Kağıt Chief Executive Officer Alp Ögücü and Chief Financial Officer Işıl Tireli made statements on the company's third-quarter 2024 financial results, ongoing investments and developments following the public listing. According to Lila Kağıt's third-quarter 2024 financial results, after-tax net period profit increased by 9.3 percentage points compared to the same period of the previous year, reaching TRY 981 million.

"Hygiene Products Manufacturer in Turkey, Paper Producer in the World"

Lila Kağıt Chief Executive Officer Alp Ögücü, providing information about the company's production structure and sales, said: "As Lila Kağıt, today on a single campus, in an area of 300,000 m², we produce tonnage with 4 paper machines on a scale rarely seen. Additionally, our machinery park comprising 26 converting lines and 53 packaging machines gives us the ability to develop many different products. We export to more than 80 countries in near and distant markets. While we operate in Turkey with our own brands Sofia, Maylo and UltraBerrak, abroad we sell bobin paper as raw material to tissue manufacturers on one hand and converting products as complementary goods on the other. In the first 9 months of 2024, despite economic difficulties in domestic and international markets, we achieved sales of 160,000 tonnes and managed to increase our sales by 15 percent compared to the same period of the previous year." 

"Our Erzurum Facility Will Bring New Momentum to the Sector"

Stating that following the public listing completed in May 2024 they have focused on new investments with the goal of sustainable growth in the tissue sector, Ögücü said: "Erzurum is an investment we started researching in 2018, with the business plan completed in 2022. We are establishing the first tissue production facility in East Anatolia and the Black Sea region. Unlike the tissue production strategy concentrated in Turkey's western region, initially we are targeting markets with a population exceeding 30 million, covering much of Anatolia as well as nearby markets such as Georgia, Iraq and Azerbaijan, with faster shipment and lower logistics costs. At the same time, we will make an important contribution to industrial development and employment in the region. Construction of our facility, which began immediately after the public listing, is ongoing, and we intend to work on it through the end of 2024 as long as weather permits. We are planning so that the converting division will be operational in summer 2025. With our bobin paper production commencing in Erzurum in 2027, we will expand our target markets."

"We Commissioned Our Solar Power Plant Project the Size of 16 Football Fields"

Stating that they prioritize effective and efficient energy management and renewable energy source investments, which are one of the fundamental elements of sustainability strategies, Ögücü continued as follows: "In this context, we first began solar energy production with 12.5 MW capacity on the roofs of our Tekirdağ Ergene factory. Our solar power plant, covering an area approximately the size of 16 football fields, is one of the notable solar projects in Turkey and the world in this regard, and will be able to generate electricity equivalent to the consumption of approximately 10,000 households." Noting that such a large-scale power plant meets 8 percent of the facility's energy consumption because they operate in heavy industry, Ögücü stated: "By making solar power investments at different locations, we aim to complete the 50 MW portion that is our initial commitment, and then increase to an investment exceeding 50 percent of our consumption. Thanks to these investments, we will provide an annual average advantage of USD 14 million in electricity consumption. As the second step, our application letter and development permit for a ground-type solar plant in Bitlis have been approved, and we are at the environmental impact assessment approval stage. In Bitlis, this time we are investing in an area approximately the size of 50 football fields, and we want to quickly commission the 28.1 MW capacity solar plant," he said. 

"We Achieved TRY 9.3 Billion in Net Sales Revenue"

Making evaluations regarding financial results, Lila Kağıt Chief Financial Officer Işıl Tireli said: "Over the nine-month period we achieved consolidated net sales revenue of TRY 9.3 billion. Our after-tax net period profit increased by 9.3 percentage points compared to the same period of the previous year, rising to 10.6 percent, and our net profit reached TRY 981 million. In the nine-month period of 2024, we rank among the top 100 most profitable publicly traded companies listed on Borsa İstanbul." 

"We Are in a Net Exporter Position"

Tireli continued: "Our company, by maintaining the export model it has kept at its core and formed the foundation of its business model since establishment, achieves natural hedging against currency risk, and has a structure with a trade surplus as a net exporter. In this context, we achieved a 73 percent export ratio in the nine-month period of 2024. Our low financial leverage and equity exceeding TRY 11 billion are also among the strongest financial indicators characterizing us." 

"We Aim to Continue Profit Distribution"

Noting that at the first ordinary general meeting held following the public listing, they implemented a gross profit distribution of 88.42 percent of the previous year's profit on 1 August 2024, Tireli said: "As a company that has made regular profit distribution in 10 of the last 11 years, our objectives include continuing profit distribution in a manner consistent with our past performance, depending on our financial position, other funding needs related to investments to be made, and conditions in the sector and economic environment" thus concluding her remarks.