İsdemir Analysis: 5 Unexpected Truths Behind the Numbers
İskenderun Iron and Steel (İsdemir), one of Turkey’s industrial giants, is typically viewed on Borsa Istanbul as a stable and predictable player. Yet, its latest financial reports reveal that beneath this calm surface lies a highly dynamic and complex transformation—driven by deliberate strategic trade-offs.
This analysis uncovers five surprising facts hidden in İsdemir’s latest data that shed light on the company’s evolving future.
1. Why Didn’t the Stock Price Collapse While Profits Were Halved?
At first glance, there’s a sharp contradiction between İsdemir’s declining profitability and its resilient stock performance.
In the first nine months of 2025, revenue grew by a healthy 11.55% year-over-year. However, operating profit plunged by 43.11%, and net profit dropped by 43.12%, confirming the pressure on margins.
Despite this steep decline, the stock market showed unexpected resilience—ISDMR shares gained 8.11% on a yearly basis as of October 21, 2025.
This resilience reflects a clear message from investors: they view the current profit decline not as structural weakness, but as a temporary cost of modernization. The market is already pricing in the future value of İsdemir’s strategic investments, signaling long-term confidence in the company’s transformation.
2. From “Distribute All Profits” Policy to a Symbolic Dividend: Signs of a Strategic Shift
Officially, İsdemir maintains a shareholder-friendly dividend policy:
“In principle, the company adopts a policy of distributing all distributable period profits in cash to the extent permitted by financial leverage, investment and financing needs, market forecasts, and free cash generation expectations.”
However, the company’s recent actions sharply contrast with this statement.
The dividend distributed on July 2, 2025, offered only a symbolic 0.70% yield—a cash payout of ₺725 million, representing just 4% of the previous year’s net profit.
Compared to the extraordinary payout ratios of 135% in 2022 and 180% in 2021, this marks a major strategic pivot.
This is not a mere financial decision—it’s a funding mechanism to retain capital for future growth.
By keeping earnings in-house, management is signaling that reinvesting in Turkey’s steel backbone is a more valuable use of cash than distributing it to shareholders.
3. More Than a Company: The Steel Backbone of Turkey
Behind these strategic shifts lies İsdemir’s immense and irreplaceable role in the Turkish economy.
As highlighted in its annual report, İsdemir holds the title of “Turkey’s only integrated long and flat steel producer.”
This means it is the country’s sole facility capable of producing both construction steel (for skyscrapers and infrastructure) and flat steel (for the automotive and appliance sectors) under one roof.
The scale is staggering:
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4.1 million tons of crude steel were produced in the first nine months of 2025.
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The company’s market capitalization stood at ₺108.34 billion as of October 21, 2025.
With 94.87% ownership by Ereğli Iron and Steel (Erdemir) and inclusion in the OYAK Group, İsdemir is not just an industrial enterprise—it’s a critical infrastructure player for the national economy.
4. The Debt Looks High—but the Cash Pile Tells a Different Story
A quick glance at İsdemir’s rising debt levels might alarm investors, but that would be a serious misreading of the balance sheet.
The truth: the company is effectively debt-free on a net basis.
Between September 2024 and September 2025:
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Short-term liabilities rose 41.51%,
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Long-term liabilities grew 58.36%,
yet… -
Cash and cash equivalents skyrocketed from ₺18.8 billion at end-2024 to ₺43.7 billion by September 30, 2025.
As a result, net debt turned into ₺–5.38 billion, meaning İsdemir now holds more cash than total debt—a net cash position.
This isn’t idle capital; it’s the war chest funding the company’s massive investment cycle that defines its current strategic stance.
5. The Hidden Logic Behind Falling Profits: A Massive Investment Wave
Falling profits, slashed dividends, and rising borrowing—put together, the pattern becomes clear:
İsdemir is in the midst of a major investment cycle designed to secure future growth, efficiency, and competitiveness.
The company’s activity report lists several key projects:
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A new blast furnace,
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Port capacity expansion,
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A biomass gasification plant.
The scale of these commitments is evident: as of the reporting date, $174 million in capital expenditures had already been recorded.
Thus, the current profit pressure is not a sign of weakness—it is the calculated cost of an ambitious vision.
İsdemir is deliberately sacrificing today’s record profits to build tomorrow’s production power and market dominance.
Conclusion
İsdemir’s financial data reveals a company not in decline, but in strategic transformation.
It is consciously trading short-term profitability and dividends for long-term industrial strength and modernization.
For investors and market observers, one crucial question remains:
Will this massive investment cycle make İsdemir more resilient to future economic volatility—or how long will investors be willing to forgo short-term returns for long-term rewards?