In parallel with the ISO 500, one of the most notable findings in the 2024 ISO Second 500 study was the decline in profitability. The main factors behind this decline were the weakening of sales and increasing cost pressures.
Indeed, although production-based sales increased by 41%, they still registered a real decline for the third consecutive year. From 2023 to 2024, the cost of sales as a share of net sales rose by 3.3 percentage points, from 79.6% to 82.9%, while operating expenses increased from 7.8% to 9.8%. The increase in financial expenses was significantly higher in the ISO Second 500, reaching 45.4%, compared to 16% in the ISO 500.
Operating profit, which was 145.5 billion TL in 2023, declined by 18.9% to TL 117.9 billion TL in 2024. As a result, the operating profit margin dropped from 12.6% to 7.3% – the lowest level since 2013. Consequently, the ratio of financial expenses to operating profit also showed a sharp increase, from 45.1% in 2023 to 80.9% in 2024.
In the same year, the ISO Second 500’s total profit/loss before tax decreased by 63.8%, from TL 95 billion to TL 34 billion. The net profit margin also fell from 8.2% to 2.1%, well below the 10-year average of 7%. One contributing factor to this decline was the net loss stemming from inflation accounting adjustments.
In 2024, EBITDA (earnings before interest, taxes, depreciation, and amortization) for the ISO Second Top 500 showed a modest increase of 16%. However, when adjusted for the average Domestic PPI inflation, this corresponds to a real contraction of 17.8%. As a result, the EBITDA margin dropped by 2.6 percentage points from the previous year to 12.7%, the lowest level in the past five years.
A relatively positive development in the ISO Second 500 results was seen in exports, which rose by 6.2%, outperforming the 1.5% growth in the ISO 500. However, this improvement was partly due to the much smaller export base of the ISO Second 500 and the fact that exports contracted by 6.5% in 2023.
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