Balsu Gıda Analysis: A
Financial "Perfect Storm" or a Painful Transformation?
Stock market investors
typically fall into two categories: those who base decisions on the net profit
figure on the balance sheet, and those who seek "the devil's details"
deep within the footnotes. The financial reports of Balsu Gıda for
September 30, 2025, tell starkly contrasting stories for these two investor
groups.
At first glance, falling
turnover, increasing losses, and high indebtedness are prominent. However, when
viewed through an "accounting lens," the company’s balance sheet
reveals an inventory item approaching its market value and a radical investment
process (Activated Carbon) set to fundamentally change its business model.
In this post, I aimed to
analyze Balsu Gıda’s current financial statements, the overlooked critical
"consigned inventory" detail, and its 2028 vision as a personal note.
1. Current Situation:
The company's latest
financial results (September 30, 2025) clearly indicate that it is undergoing a
challenging operational period:
- Sharp Decline in Revenue:
Due to low harvest yields and contraction in export volume, revenue
significantly dropped compared to the same period last year, settling at 1.94
Billion TL.
- Operational Loss:
The company reported -208 Million TL Negative EBITDA and -709
Million TL Net Loss during this period. The gross profit margin has
dropped to around 1%, suggesting that the current hazelnut trading
operation is struggling to generate profitability.
- High Indebtedness:
Net Financial Debt has reached 11.19 Billion TL. When compared to
Equity (3.77 Billion TL), the high leverage causes financial expenses to
suppress profitability (815 Million TL in financial expenses over 9
months).
- Cash Flow:
Cash flow from operating activities is -1.44 Billion TL negative.
The company is currently consuming cash rather than generating it to
sustain its operational cycle.
2. Critical Turning
Point: Inventory Gain Expectation and "Footnote 12" Reality
The biggest "bull
case" in the market for Balsu Gıda relies on the massive 13.7 Billion
TL Inventory shown on the balance sheet. The thesis suggests that rising
hazelnut prices due to the 2025 harvest shortfall will generate a huge
"Inventory Gain" from the sale of these low-cost stocks, allowing the
company to pay off its debts.
However, Footnote 12
of the Activity Report places a crucial caveat on this scenario:
"As of 30.09.2025, 2,636,249,481
TL of the said balance consists of hazelnut purchases received on consignment
but not yet invoiced. The value of these consigned hazelnuts... will be paid to
the respective sellers at the price on the payment date."
(Translation of the critical detail from the Turkish report)
What Does This Detail
Change?
1. Approximately
20% (2.6 Billion TL) of the inventory on the balance sheet is not owned
by the company; it is "on consignment."
2. If
hazelnut prices rise, the company will pay the producer for this consigned
product at that day's high price.
3. Result:
An inventory gain cannot be realized from this 2.6 Billion TL portion of
the stock. The price increase translates into a cost increase, not a profit.
It is healthier for
investors to subtract this 20% consignment share when calculating the
"inventory gain" and base their expectations on the ~11.1 Billion
TL net inventory.
3. Future Projection:
2026 - 2028 Transformation Roadmap
Beyond this short-term
financial squeeze, the real story that could change the company's valuation is
the transformation of its business model. The company is attempting to evolve
from a low-margin "Food Trader" identity into a high-margin
"Industrial Technology" company.
2026: The Financial
Cleanup Year
- Goal:
Conversion of inventory into cash and reduction of the debt burden.
- Expectation:
The sale of the remaining net inventory should be a critical resource for
pulling the company's net debt back to manageable levels, even if not
completely eliminating it. If this happens, the financial expenses that
currently strain the company will decrease.
- Operations:
The Chile factory (20 thousand tons capacity) is planned to become
operational in the second quarter of 2026.
2027 – 2028: Hendex and
Margin Transformation
The Hendex Activated
Carbon project is the primary investment set to determine the company's fate.
- Project:
A facility that converts hazelnut shells (0.12 USD cost) into activated
carbon (3.00 USD selling price).
- Capacity:
The first line will begin operation in early 2026, and the other lines
(C3-C4) will be commissioned in mid-2027.
- Potential:
According to the prospectus, this investment is expected to contribute 40
Million USD to EBITDA from 2027 onwards. Furthermore, tax advantages
under the HİT-30 incentive program are applicable until 2030.
2028 Consolidated:
Realistic EBITDA Projection
The following 2028
EBITDA projection is stripped of overly optimistic assumptions and based on
information provided by the company in public sources:
|
Business Line |
Estimated
Contribution (Annual) |
Note |
|
Current Hazelnut
Operations |
~45-50 Mn USD |
Normalized expectation. |
|
Hendex (Activated
Carbon) |
~40 Mn USD |
Upon reaching full
capacity. |
|
Chile Operations |
~3-4 Mn USD |
Mitigates seasonality
impact. |
|
TOTAL TARGET |
~90-95 Mn USD |
4. Conclusion: Risk and
Reward Balance
Balsu Gıda currently has
the appearance of a cash-consuming and highly indebted company in its financial
statements. However, the inventory in its hold and its ongoing investments carry
the potential for this picture to reverse within 2-3 years.
- Risks:
Failure to sell inventory profitably, delays in the Hendex investment, or
financial expenses continuing to erode equity.
- Opportunities:
Exiting the debt spiral with the conversion of inventory to cash in 2026,
and the re-rating of the company with "industrial company
multiples" driven by Activated Carbon revenue in 2028.
The company and its
investments need close monitoring. Current turmoil might be just
"noise" for the 2028 vision – or it might not. The stock market is an
investment arena where this risk is very high.
The Market Cap as of
November 20, 2025 Closing is approximately 19 Billion TL.
Important Disclaimer: The
investment information, comments, and recommendations contained herein are not
within the scope of investment advisory services. Investment advisory services
are provided personally, taking into account the risk and return preferences of
individuals. The content, comments, and recommendations contained herein, which
are not directive in nature, are general. These recommendations may not be
suitable for your financial status and risk/return preferences. Therefore,
investment decisions based solely on the information contained herein may not
yield results that meet your expectations.
