4 Surprising Truths Hidden in Ereğli’s Financial Reports
Ereğli Iron and Steel (EREGL), one of Turkey’s largest industrial enterprises, is generally perceived by investors as a stable and predictable giant. However, the company’s latest financial reports reveal that beneath this calm surface lies a major transformation — one filled with surprising dynamics that deserve closer examination. Let’s take a detailed look at the story behind these numbers.
1. Why Did Profit Collapse While Revenue Stayed the Same?
At first glance, Ereğli’s sales revenue appears relatively unchanged. Yet, profitability tells an entirely different story. This contradiction provides one of the most striking clues about the company’s current situation.
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The Numbers: In the first nine months of 2025, the company’s revenue stood at ₺147.9 billion, almost the same as ₺148.9 billion in the same period of the previous year.
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Dramatic Profit Decline: Despite this stable revenue, Net Profit Attributable to the Parent fell from ₺10.78 billion to ₺2.38 billion — a staggering 78% drop.
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Widespread Pressure: This decline isn’t limited to net profit. Gross Profit fell by 32.7%, and Operating Profit plunged by 62.6%, showing how widespread the margin pressure has become.
Normally, revenue and profitability move in tandem. This sharp divergence suggests rising costs or intense pressure on profit margins. One clear sign of this is the decline in the company’s EBITDA margin, which fell from 12.4% to 8.9% during the same period. This confirms that rising costs have eroded gross profit and negatively impacted every line down to the net income.
2. The Company Doubled Its Capital: What Does It Mean?
Another key development hidden in the financial statements lies in the company’s capital structure. Ereğli doubled its paid-in capital from ₺3.5 billion to ₺7 billion — a significant move that took effect on November 27, 2024.
Such a major capital increase is typically interpreted as part of a company’s broader strategic plan. This move may serve to:
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Strengthen the company’s balance sheet,
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Finance new investments, or
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Reduce debt levels.
3. A Shift Toward Foreign Markets: Changing Sales Strategy
While total revenue appears flat, the geographical breakdown of income points to an important strategic shift. Ereğli is noticeably redirecting its sales focus from the domestic market to international markets.
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Domestic Sales Decreased: In the first nine months of 2025, domestic sales fell by 4.96%, from ₺113 billion to ₺107.4 billion compared to the previous year.
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Foreign Sales Increased: In contrast, foreign sales rose 14.67%, from ₺27.8 billion to ₺31.9 billion.
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Export Share Grew: As a result, the share of exports in total sales increased from 18.67% to 21.55%.
These figures suggest that Ereğli is strategically increasing its focus on exports to offset weakening domestic demand and capture new growth opportunities in global markets. The company’s decision to double its capital could also be part of a move to strengthen the financial foundation supporting this export-driven strategy.
4. Halved Dividends and Confusing Valuation Multiples
One of the most tangible reflections of the profit decline discussed in Section 1 is seen in dividend payments, directly affecting shareholders. The data here presents an intriguing paradox.
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Dividends Halved: As a natural result of declining profitability, the per-share dividend from 2024 profits dropped by half — from ₺0.50 to ₺0.25.
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Contradictory Valuations: The company’s valuation multiples create a puzzle for investors. On one hand, the Price-to-Book (P/B) ratio stands at 0.68, suggesting that the company is undervalued relative to its net assets. On the other hand, the Price-to-Earnings (P/E) ratio sits at 37.47, a high level for an industrial firm — signaling strong market expectations for future profit growth.
This leaves investors with a key question:
“Is the company undervalued based on its assets, or overvalued based on its current earnings?”
Conclusion
Ereğli’s latest financial reports indicate that beneath the surface calm lies a period of significant strategic maneuvering. Despite stable revenue, shrinking profitability, a doubled capital base, growing export focus, and the dividend–valuation paradox all suggest that the company’s story is far more complex than a simple balance sheet reading.
Altogether, the data implies that Ereğli may be going through a transformation and restructuring process.
So the real question is:
Is Ereğli currently experiencing the pains of restructuring — or taking its first steps toward a larger strategic shift?