JCR Eurasia Rating has evaluated the credit rating of Katmerciler Araç Üstü Ekipman Sanayi ve Ticaret A.Ş. and the Cash Flows of the Existing Bond in the investment category and upgraded the Long Term National Rating from “BBB(Trk)” to “BBB+(Trk)” with a

JCR Eurasia Rating has evaluated the credit rating Katmerciler Araç Üstü Ekipman Sanayi ve Ticaret A.Ş. and the Cash Flows of the Existing Bond in the investment category and upgraded the Long Term National Rating from “BBB (Trk)” to “BBB+ (Trk)” with a Stable outlook. Long Term International Foreign and Local Currency ratings are affirmed at ‘BBB-/Stable’ and their details are given in the table below:

Long Term International Foreign Currency


BBB- / (Stable outlook)

Long Term International Local Currency


BBB- /( Stable outlook)

Long Term National Local Rating


BBB+ (Trk) / (Stable outlook)

Short Term International Foreign Currency


A-3 / (Stable outlook)

Short Term International Local Currency


A-3 / (Stable outlook)

Short Term National Local Rating


A-2 (Trk) / (Stable outlook)

Sponsor Support



Stand Alone



With over 30 years of experience, Katmerciler manufactures various types of specialty vehicles such as tipper trucks, firefighting vehicles, jetting trucks, rescue vehicles, street sweepers, garbage and transportation trucks and riot control vehicles that particularly serve the needs of local administrations and public institutions in its manufacturing plant. The Group’s production facility is located in Izmir. In order to expand its current production capacity, the Company is overseeing the construction of a new plan in Ankara which is planned to be operational in 2016. Owing to national and international tender offers and public procurements, Katmerciler has reached significant market share and sales network in Turkey and neighboring region. The Group actively works to build international ventures and collaborations so as to develop its business volume and increase its production capabilities. The company, whose majority shares belong to Katmerci Family, went public in 2010 and is quoted in Borsa Istanbul.

While the considerable part of revenues were generated by exports in prior periods, the revenues from high-valued public procurement and tender offers outpaced that of the exports in in 2015. In addition, Katmerciler’s profitability has significantly increased thanks to growing sales volume and decrease in short exchange position that prevented sizable FX losses. In the light of the Group’s public tender business volume, investments to expand production capacity and wide-range export network, Katmerciler’s sales growth and high profitability is expected to be maintained. The Group holds a certificate of ‘Secure Facility’ issued by Ministry of Defense and it signed a strategic alliance agreement with Oshkosh Corp., a company on specialty vehicle business in the USA. Considering these recent developments, it is expected that Katmerciler will continue to sustain profitability with high value added vehicles and accumulated know-how bolstered via the R&D facility investment which will be a benefactor of government subsidies. While the external funding structure of the balance sheet is noted, considering the internal resource generation ability of the Group, debt-service ratio is deemed within acceptable levels.

Although the specialty vehicle sector is listed under automotive supply industry, the dynamics of the sector is shaped by the needs of local administrations and public institutions, rather than automotive industry. The main risk issues of specialty vehicle sector are the political, economic and legal risks in the countries in Africa and Middle East, important markets for the Group, relations of these countries with Turkey and increasing competition of international automotive suppliers. Since the Group’s customer portfolio mostly consists of public institutions and governmental administrations, revenue to be generated is dependent on fiscal policies, the machinery & equipment renewal plans of governmental institutions, and budgets of public institutions. Besides the local administrations’ demand for minimum service level of the products, ADR standards are mandatory to be aligned that the specialty trucks have to satisfy minimum level of security standards set up by European standards agencies. Those regulations and developments helps sector to maintain its growth potential.

Effective export channels, relatively low-collection-risk of public procurements, profitability oriented growth strategy, investments for high value-added products, high local market share along with contraction of the short foreign currency position and solid profitability indicators constitute the main pillars of upgraded credit rating of “BBB+ (Trk)” on the Long Term National Rating of Katmerciler. Considering the cost of domestic and international sourced raw materials and the movements of the related foreign exchange rates, foreign currency position of balance sheet, share of exports in total sales and projections for the upcoming periods, the Long Term International Local and Foreign Currency grades are determined as the country ceiling “BBB-”. The sustainability of the Company’s export based revenues and the respective risks in the counterparty countries, the return performance of the investments with concerning the defense industry, the trend of the currency profitability ratios will be monitored in the upcoming periods.

The Katmerci Family, the Group’s founder and dominant shareholders, are considered to have the willingness to support the Group if needed. Taking into account the Group’s capacity to create profits, business volume, previous investment and the long track record in the sector, Katmerci Family is thought to have the financial capacity to support the Company. In this regard, the Group’s “Sponsor Support Grade” is determined as (2), denoting a sufficient level. On the other hand, the Group’s “Stand Alone Rating”, measuring its financial capacity to meet its commitments and obligations without external support is evaluated as (B), indicating an adequate level, considering its internal resource generation capacity, the composition and weight of external resources, liquidity level and the expectations about the upcoming periods.

For more information, related with the rating results you may visit our internet site http://www.jcrer.com.tr or contact our analyst Mr. Özgür Fuad Engin.


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