Ladies and gentlemen, thank you for standing by. I am Geli, your Chorus Call operator. Welcome, and thank you for joining the Tofaş Türk Otomobil Fabrikası A.Ş. conference call and live webcast to present and discuss the nine months 2023 financial results. All participants will be in listen only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Cengiz Eroldu, CEO, Mr. Fabrizio Renzi, CFO, and Mr. Mehmet Ağyüz , CFA, and Investor Relations Manager. Mr. Renzi, you may now proceed.
Good afternoon. Thank you, operator. Thank you all for joining our call today. We are very pleased to announce the results achieved in the first nine months of the year, which are once again the best ever in our currency of our company. In spite of some headwinds in the third quarter, we were able to consolidate our financial commercial performance. Profit before tax amounted to TRY 13.6 billion. That means almost three times the result achieved in 2022. PBT margins stand at 19.8%, 7.8% up compared to the same period, 2022. Thanks to a strong operative result and an excellent financial gain, we decided to slightly increase our PBT guidance at 15%. With TRY 22 billion at the end of September, our cash position remains very solid, and we are in condition to self-finance the acquisition of Stellantis Turkey in the last quarter of the year.
Regarding the manufacturing operation in the quarter three, we have implemented our new production setup. We stopped the LCV line to enable the preparatory activity for the new K0 model. Reason why in August we have planned a long stoppage. At the same time, we have unified the production of Tipo and Fiorino in the passenger car line and implemented a third shift. In spite of rising competition and the production constraint we mentioned in the third quarter, the performance on the local market remains excellent, and we were able to keep our leadership position with a combined market share of 16.6%. In particular, in the PC segment with a market share of 14.6%, we remain the leader with Egea best seller car for seven years in a row. Remarkable also the contribution of the imported vehicles that account for 8% of our mix in the first nine months.
In the last quarter, we are planning to further increase the penetration of the imported cars, and also the contribution of Alfa Romeo and Jeep brand is becoming significant for our domestic business. In conclusion, we remain positive on the last quarter, and this is the reason why we have upgraded our guidance to 200,000-205,000 units. Regarding export, the contraction compared to 2022 was largely expected, and it is not a surprise due to discontinuation of Doblò. In this context, it is very promising the performance of Tipo in the EMEA market, mainly Algeria. At the moment, the EMEA region accounts for almost 40% of the total volumes exported. Regarding the export guidance, we decided to reduce the range to 60,000-70,000 units, but on the other side, we increased the vehicle designated to the local market.
As you can imagine, this reallocation will be beneficial for our profitability. Finally, regarding the strategic agreement announced on March 1, the parties continue to work hard. On July 28, we have announced the signature of the stock purchase agreement based on which Tofaş will acquire 100% of shares of Stellantis Turkey. The closing of the transaction is expected within this year, and the effect of the consolidation will be visible in the first quarter 2024. In parallel, we are working on the finalization of the K0 contract. We are at the final stage of negotiation, but as I mentioned before, the preliminary activity for the introduction of this new model in Bursa plant are already ongoing. Now, I will give the floor to Mehmet for the full presentation, then we can start our Q and A session.
Hi, good afternoon, and good morning, everybody. In the first nine months, Turkey automotive production increased by around 12% and producing by around 1.1 million units. Tofaş production was around 174,000 units during this period, which was down compared to the previous period. In the third quarter, due to the production constraints and the long maintenance activity, our production was down around 25% and reached to 51,000 units. In terms of production mix, passenger car production has increased its share, with the phase out of Doblò and reached 72% of our production, versus around 52% during the same period of last year. In terms of shipments, we shipped around 2% higher, compared to last year at 190,000 units in the first nine months of the year.
Very strong shipments in the local business, which was up around 50%, were largely offset by lower export volumes, which was down at a similar amount due to the product mix. In the third quarter our shipments were down around 10%, and a similar wise, our domestic shipments was strong at 20% growth, whereas export shipments were down around 48% compared to the same period of last year. In terms of shipment mix, the most notable change was observed in our export business due to discontinuation of mainly Doblò to North America markets. Now, LCV business comprises around 33% of our export business, which is down almost double level of last year. Moving on to domestic markets. In the first nine months, domestic markets light vehicle demand was quite robust, and which grew by around 65%, reaching to 858,000 units.
As you can see, third quarter light vehicle demand remained robust with a growth of 85%, actually showing a slight acceleration compared to the second quarter growth level of 56%. The growth in the first nine months was broadly evenly balanced between light commercial vehicles and the passenger car sales, which is PC, were up by around 67%, reaching to 667,000 units. Whereas CV shipments were also strong at 57% growth, reaching to 191,000 units, which are way above the historical ranges in the recent past. You can see the monthly evolution here, and you can see, especially since March, the light vehicle sales reaching above 100,000 level thresholds. In May, June, July period, these were very strong months, historical high months, even if you consider seasonality. Whereas you can see in August and September, there is a slight slowdown.
Sequentially in the third quarter, the market seems to slow down a little bit, but still well above the historical ranges. This is partly due to the after-election by new economy management team, implementation of more orthodox policies by raising interest rates by the central bank, which actually curbed a little bit on the investment demand for the automotive vehicles as a result of better alternatives with higher deposit rates as well as less credit availability for consumption. At Tofaş, we shipped 48% higher in the local market, which our shipments reach a historical high figure of 147,000 units in the first nine months. Passenger car shipments were more strong at 53% growth, and CV shipments were slightly lower due to the change in our product mix. The monthly evolution of our domestic retail shipments are showing a similar pattern to the overall light vehicle market.
Except, only in August, our shipments were lower compared to the previous year due to the long closure period, as well as the strong demand in the market, which kept our ability to build inventory before the closure. In terms of market share, Fiat brand maintained the market leadership with 14.6% market share, still remarkably above the closest competition, which has been the case since the second half of 2022. Our market share retreated by around 160 basis points to 14.6%, and this is mainly due to the production constraints at our plant related with the refurbishment to make the plant ready for the next investment cycle, as well as improving availability of imported vehicles during a strong demand period. Egea model, since its launch in 2015, it has maintained its market leadership. Now, this is the eighth year in a row.
While our import business is also doing very well, whereas we have seen six-fold and three-fold increases in our Alfa Romeo and Maserati sales, respectively. When we look at the other brands under Stellantis umbrella, they are performing also quite strongly year to date with passenger car market share of all brands under Stellantis umbrella improved by 470 basis points, reaching to slightly below 34% in the first nine months. In terms of market share, we maintain our number two position with 23.7% market share, with a slight retreat compared to the previous year due to the normalization as expected with our limited product offering in this segment. Whereas, brands under Stellantis umbrella continued to perform very strongly, and the total market share was up by 520 basis points, reaching to 43.5% in the first nine months.
In total market share, we maintain our distant market leadership with 16.6% market share compared to the close competition of 10.4%, despite around 200 basis points decline in our market share. Including premium brands, Tofaş market share was down similarly at 210 basis points and standing at around slightly below 17% in the first nine months. Stellantis market share was up by around 450 basis points during this period, and reached slightly below 36% in the first nine months. Moving on to export business. In the first nine months, demand in the European passenger car market remained strong with a 17% year-over-year recovery. Despite this recovery, demand in the European market remains around 20% below the pre-pandemic levels that is observed in 2019.
At CV registrations, the data is not available at the moment, but it continues to perform well, which was up around 13% in the first six months of the year. Our export shipments were down around 51%, and we shipped 42,400 units in the first nine months. On a positive note, our passenger car shipments showed a growth trajectory with 4% growth compared to around 18% contraction in the first half of the year. This is due to mainly thanks to strong penetration of our Egea model to MENA region, which we expect to continue for the remainder of the year. This is the monthly evolution of our exports volumes, which is showing a similar pattern, also due to the base effect and the product mix.
In terms of regional breakdown of our export business, MENA now constitutes the biggest portion of our export business, which is now 39% of our shipments to this region. Italy is the number two biggest region, country we are exporting to, with 36%. We expect this strong momentum in the MENA region to continue in the coming periods. In terms of our shipment volumes by model, on the left-hand side, you could see we shipped 45,000 units less exports. The main driver of this decline is you can see Doblò and the Ram ProMaster City, which we shipped around 40,000 units less compared to last year. On the right-hand side, we shipped 48,500 units more domestic business and which reached 147,000 units. The main driver of this increase is our strong performance of the Egea, which we shipped 31,000 units more.
Fiorino, despite it is almost at its late cycle of its lifetime, it doubled the volumes with 26,000 units. Also, our imports vehicle business performed quite strongly, which almost quadrupled its volumes, now constituting around 8% of our local business. All in all, we shipped 3,500 units more in total, with a total shipment of close to 190,000 units in the first nine months of the year. Moving on to financial performance, 2% shipment growth translated into 64% top line growth in the first nine months. The delta being due to the depreciation of Turkish lira, as well as good pricing in the local market. EBITDA growth of 72%, which reached TRY 12 billion, is parallel to the revenue growth. Whereas profit before tax, our main KPI, grew by 171%, reaching to a record high level of TRY 13.6 billion.
The composition of our revenue growth was mainly due to the growth in our domestic business, which grew by 152% in the first nine months, compensating the 32% slide in our export business, which translates into 64% consolidated growth in the first nine months of the year. In terms of profitability, as you can see across the boards, we have shown improvement from gross margin to the PBT margin significantly compared to the previous period. This is mainly due to good performance in the local markets and higher local business mix in our total revenues, and also increasing financial income on the back of our growing cash pile on our balance sheet, as well as higher interest rates. Our net profits showed a similar performance to our PBT, except we paid taxes this period versus much more taxes this period compared to the previous year.
Our bottom line surged by around 150%, reaching TRY 12.5 billion in the first nine months of the year. You can see the snapshot of our P&L here, and the strong growth at the top line translates into even stronger performance at our other items to the bottom line due to operating leverage, as well as very efficient cost management during this period, despite the pressure from the higher input cost in a quite high inflationary period. Moving on to our balance sheet. Our balance sheet as of September remains very strong. We generated our cash position increase by TRY 9.6 billion , with a cash position of TRY 21.5 billion , despite that we distributed around TRY 3 billion of dividends. On the receivable side, despite higher activity, we managed that quite well, which was flat compared to year-end.
As a result, our shareholder equity grew by almost TRY 10 billion , standing at TRY 21 billion compared to the year-end. Our financial position remains solid, with a net financial position of EUR 686 million as of the end of the third quarter. Despite some increase in our net working capital, it remains at a negligible level compared to our turnover, with EUR 32 million of net working capital at the end of the quarter. Moving on to CapEx. In the first nine months, we spent EUR 30 billion , and half of which was structural due to the refurbishment at our plant for the new investment cycle, and also the remainder was for the passenger car investment. Moving on to outlook.
On the back of very strong year-to-date light vehicle market in Turkey, we decided to raise our local market outlook by around 12% to 1.1 million-1.15 million units. With that, we are also raising our local market shipment guidance by around 5,000 units to 195,000-205,000 units. With that, we are also reallocating some from export to the local, and we are reducing our export shipments by around 10,000 units to 60,000-70,000 units. We are maintaining our production volume almost the same to 240,000-250,000 units for the year. Due to the year-to-date low investments, we are also reducing our CapEx guidance by EUR 25 million to EUR 100 million . I should note that this is also an accounting issue with the acceptance of the receipts, although our committed figure is much higher than this.
Given the strong profitability we had, we decided to raise our PBT margin guidance from +14% to +15%. This marks the end of the presentation, and we would be happy to take your questions. Operator?
Ladies and gentlemen, at this time, we will begin the question-and-answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question is from the line of Cemal Demirtaş with Ata Invest. Please go ahead.
Thank you for the presentation, and congratulations for good results. My question is about the domestic market. So far, you have impressive performance, and the market has been growing. After the latest interest rate hikes, do you see any initial signal of slowdown? Maybe not this year, but for 2024. Could you further elaborate how the supply and demand conditions and maybe from the leasing side or the individual buying, how do you see the trends? That is my first question. The second question is about the inflation accounting issue. Did you have a chance to elaborate how the impact will be on you or on your company? Any, just in color about the potential impact or do you expect it to be implemented? That is my second question. Thank you.
Good afternoon. This is Cengiz speaking. Thank you for the question. Regarding the local market situation, of course, we are seeing signal of certain level of slowdown. It is clear. Now from the pull market, we are passing to the push market. This will be the last quarter of this year and also in 2024, our expectation is to be not anymore into the pull market, but market will be the push one. Of course, this will increase the competitiveness in the market. But as Mehmet explained, for this year, we are not expecting any important slowdown as a market size after the numbers till September. Also October seems will be around 90,000, 95,000 of market. With this tempo, our forecast is around 1,150 or more market for this year.
For the next year, it is not easy to make a forecast, but of course, until the elections, we are waiting some improvement in the market conditions. Till March, the m arket will be, I think, high. After the elections, we will see how will be the situation of the exchange rate also will be important to understand the market. Actually, we are not waiting also huge drop in 2024 compared 2023 because I am also reading some rumors talking about 30% reduction in 2024. We are not so pessimistic for the next year. Regarding the inflation accounting, this application will be valid at the beginning of the next year. Only at the statutory side, of course, not for the IFRS. According our knowledge as today, and we are preparing our system in order to be ready for the application. Thank you.
And maybe as a follow-up, other question about the exports plans, Cengiz . Do you think after the agreement with Stellantis, are all process going as you expected or the market is very eager to see the new projects and the Stellantis. Do you think everything is just as planned or did we experience any slowdown, for instance, the Competition Board or others? I know that in the past we have conviction, but just to remind, are the goals as planned or should we expect things are going on time? Just to check.
According my knowledge and my expectation, the activities are on track, so are going as we planned. Of course, for the export now, we are facing a transition period between the existing range and the future range. For this season, this year and next year, we will see some, let's say, moderate numbers as export volumes. But we have the plans for the future, and we will disclose when we will be ready and confident about the future plans.
Mr. Cemal, are you finished with your questions? Mr. Cemal, can you hear us? Okay, moving on. Once again, to register for a question, please press star and one on your telephone. The next question is from the line of Hanzade Kılıçkıran with JP Morgan. Please go ahead.
Thank you very much for the presentation. I have a question regarding your FX position. What is the main driver behind the FX losses in this quarter, despite you had the long FX position at the time when Turkish depreciates? It is very difficult for me to understand this net FX position in the third quarter. How should we think about your FX risk going forward? Because as your domestic revenue share will increase, you will have lower receivables in FX, but payables are still in dollar terms. I think you will start running short FX position. I just wonder how you are going to manage this short FX position until the exports start. Thank you.
First of all, Hanzade , we are very careful with the FX position of the company. We have some clear rules, and we are following those. In our financials, of course, some of the impacts we are seeing at the financial part, but some of the impacts we are seeing at the operative level. For this season, probably looks like we have some FX loss, but in fact, we are not carrying any position overall. No, because in fact, our position is a balance between the cash that we are carrying in hard currency, our hard currency payables, hard currency tradables, and hedge accounting application, as you know. In this environment, we are not carrying any important long or short positions.
Cengiz , is this going to change next year? Because next year you will have more domestic revenues, so you will have less receivables in FX, more trade payables in dollars. Mathematically, you should be running a short FX position if you are not going to hedge it.
As I said, this is the company rule, so we cannot carry the compliance.
You will hedge it?
We cannot carry, yes. We will hedge them, or naturally or with banks.
Okay. Regarding, I do not know if you are going to guide us, because it is still a process. You are guiding very strong PBT margin for this year, over 15%. You had a very successful year. Going into 2024, when the distribution assets are included, is it reasonable to assume this PBT margin declining to historic levels, or you are still comfortable to run over 15% PBT margin?
Actually today we are a bit higher than 15% PBT margin.
Yeah.
This 15%, or before was 14%, is also showing the next year target. We have two, three months till the year end. For this year, we want to keep our position.
Including the distribution assets, right, Cengiz ?
Yes, next year. We are also trying to give a guidance, not in a short term for a couple of months, but let's say one year, one and a half year period targets.
Okay, thank you. Thanks a lot.
Welcome.
As a reminder, if you would like to ask a question, please press star and one on your telephone. As a final reminder, to register for a question, please press star and one on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Renzi for any closing comments. Thank you.
Okay. Thank you, operator. Thank you all for the participation on the interest on our results. I wish you good evening.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good evening.