Dear Shareholders, Stakeholders and the Turcas Family,

At Turcas, we can look back on the past year with confidence and pride, having maximized the efficient use of our financial and human resources. Despite 2019 having been a year of challenges for global markets and the Turkish economy and despite our exposure, to the fullest extent, to the aftershocks of sudden volatilities in foreign exchange rates that hit our economy hard in summer 2018, we rounded off the year with strong growth prospects thanks to our highly qualified liquidity management procedures and efficiency of the risk management principles at our subsidiaries.

In line with a recovering economy that is getting back on the path to growth, we achieved our goal of deleveraging, a goal that we have been pursuing with determination, to the degree that had been planned for 2019. We will continue our efforts to reduce our level of indebtedness in 2020. Looking at things from a sector-specific perspective, we can say that the energy sector plays a strategic role in the national economy and that domestic and renewable energy, as well as efforts to reduce dependency on foreign sources of energy and the YEKDEM (Renewable Energy Support Scheme) and YEKA (Renewable Energy Resource Area) initiatives will continue to come under the spotlight within the sector. As for our main areas of business:

In Fuel Retail and Lubricants sector, Shell & Turcas Petrol, our flagship subsidiary in which we hold a 30 percent share, pursues a top quality service mentality in offering services to over one million visitors a day at its more than 1,000 fuel stations across Turkey. Having maintained its leading position in the market in 2019, its success was also evidenced by a total turnover of TL 39.3 billion achieved last year. Shell & Turcas Petrol has continued to be the most preferred fuel company in Turkey with its environment-friendly investments which aim to increase the number of solar-powered fuel stations and enhance social policies that focus on gender equality, women employment and making life easier for customers with disabilities.

In the field of Conventional Energy, RWE & Turcas South Power Generation, another one of our subsidiaries where we hold a 30 percent stake, has continued to generate power at the 800 MW Denizli Natural Gas-Fired Combined-Cycle Power Plant despite the challenging times for the sector, and has increased its paid in capital to TL 1.8 billion by converting the Shareholder Loans into Equity Capital which in turn has strengthened its financial standing.

In the Renewable Energy sector, we have aimed to maximize the generation output of our 18 MW Aydın Geothermal Power Plant, owned and operated by our wholly-owned subsidiary Turcas Kuyucak Geothermal , both through efficiency initiatives to enhance resource production at existing wells and our investment in a new production well. In 2020, we will continue to increase operational profitability in line with this main objective and through cost-saving practices. In addition to financial sustainability, efforts towards continuous improvement, occupational health and safety, as well as environmental and quality management will always remain our number one priority.

We know that new generation business models will boost efficiency via the artificial intelligence algorithms used in big data and that this increase in efficiency will, in turn, increase the value of existing production portfolios. 2020 will be the year when Turcas will develop innovative solutions integrated with energy through digital transformation platforms. Moreover, we will continue to make social investments within our areas of operation and use all our efforts to work towards sustainable development by embracing the motto of sustainability in accordance with the UN Sustainable Development Goals.

As of the publication date of this report, we are feeling the social and economic impacts of the Novel Coronavirus (Covid-19) pandemic that began in China and quickly spread around the world. I am faithful that our national solidarity and unity will help us leave these challenging times behind in rather short period. On behalf of Turcas, I extend my most sincere thanks to all our stakeholders, business partners and colleagues who have always trusted in the investments we have realized for our economy and shareholders in line with our vision to become the highest value generating Energy-Focused Investment Company in Turkey.

Best regards,

BATU AKSOY
CEO & Board Member