20-F: D-Market Elektronik Hizmetler ve Ticaret A.. Reports Full Year 2024 Results

D-Market Elektronik Hizmetler ve Ticaret A.. reports a net loss for 2024, impacted by inflation adjustments and strategic investments, while GMV sees a modest increase.

Summary

• D-Market Elektronik Hizmetler ve Ticaret A.. reported a net loss of TRY 1,604.9 million for the year ended December 31, 2024, compared to a net income of TRY 109.1 million in the previous year.
• The company's GMV increased by 12.1% to TRY 188.6 billion in 2024.
• Active Customers reached 12.2 million as of December 31, 2024.
• The company is focusing on improving customer and merchant experiences, expanding logistics, and offering new products and services.
• The Turkish economy is treated as hyperinflationary, impacting the company's financial performance.
• The company is subject to tax audits and changes in tax laws.
• A cybersecurity incident occurred in February 2024, resulting in a fine from the Personal Data Protection Authority.
• Kaspi became the new controlling shareholder on January 29, 2025.
• The company identified material weaknesses in its internal control over financial reporting.
• The company is exposed to foreign exchange rate risks.
• The company is subject to laws and government regulations relating to competition and antitrust.

Sentiment

Score: 5

Explanation: The document presents a mixed sentiment. While there is growth in GMV and Active Customers, the net loss and identified material weaknesses in internal control over financial reporting raise concerns. The change in controlling shareholder also introduces uncertainty.

Positives

• GMV increased by 12.1% to TRY 188.6 billion in 2024.
• Active Customers reached 12.2 million as of December 31, 2024.
• Marketplace GMV accounted for approximately 70% of total GMV in 2024.
• The company is investing in strategic assets like Hepsipay and HepsiJet.
• Order frequency increased to 10.8 in 2024 from 9.5 in 2023.

Negatives

• Net loss of TRY 1,604.9 million in 2024 compared to a net income of TRY 109.1 million in 2023.
• The Turkish economy is treated as hyperinflationary, impacting the company's financial performance.
• A cybersecurity incident occurred in February 2024, resulting in a fine of TRY 3,453,775.
• The company identified material weaknesses in its internal control over financial reporting.

Risks

• The Turkish economy is treated as hyperinflationary, impacting the company's financial performance.
• The company is subject to tax audits and changes in tax laws.
• A cybersecurity incident could cause material delays or interruptions in information systems.
• The company may be impacted by fraudulent or unlawful activities of merchants.
• The company may be subject to product liability claims.
• The company may be classified as a passive foreign investment company (PFIC).
• The effects of earthquakes in Trkiye may adversely affect our prospects, business, financial condition and results of operations.
• Foreign exchange rate risks could affect the Turkish macroeconomic environment, could affect your investment and could significantly affect our results of operation and financial position in future periods if hedging tools are not available at commercially reasonable terms.

Future Outlook

The company anticipates continued investments in growth and technology, including expanding logistics and financial services operations. Profitability remains sensitive to inflation trends and changes in monetary policy.

Industry Context

The Turkish e-commerce market is competitive and rapidly evolving, with competition from other e-commerce companies, offline retailers, and new entrants. The company faces uncertainties relating to the growth and profitability of the e-commerce industry in the region.

Comparison to Industry Standards

• The document does not provide enough information to make a detailed comparison to industry standards.
• To perform a comparison, we would need to know the GMV growth, profitability, and customer acquisition costs of comparible companies in the Turkish e-commerce market.
• Some of the major players in the Turkish e-commerce market include Trendyol, Amazon, and N11.
• Trendyol, backed by Alibaba, has been expanding its product offering and investing heavily in growth.
• Amazon entered the Turkish market in 2018 and is implementing its global model.
• N11 has been operating a marketplace business model since 2012.

Legal Proceedings

• A cybersecurity incident occurred in February 2024, resulting in a fine from the Personal Data Protection Authority.
• The company is subject to an ongoing investigation by the Turkish Competition Authority regarding its automatic pricing mechanism.

Related Party Transactions

• The company engaged in transactions with companies controlled by members of the Doan family, including sales, purchases, and leases.

Stakeholder Impact

• Shareholders may be concerned about the net loss and material weaknesses in internal control.
• Employees may be affected by cost-cutting measures and organizational changes.
• Customers may benefit from improved services and a wider selection of products.
• Merchants may benefit from the company's efforts to improve the platform and attract more customers.

Next Steps

• The company intends to continue to monitor and upgrade its internal controls.
• The company plans to continue to invest in growth and technology.
• The company will focus on improving customer and merchant experiences.

Key Dates

Keywords

Hepsiburada, financial results, GMV, e-commerce, Turkey, Kaspi, cybersecurity, inflation, regulations