We have left behind a year characterized by constantly shifting political winds and changing economic conditions. Geopolitical uncertainties on a global scale – including the trade war between the United States and China, Brexit tensions, Iran embargo, the Fed’s interest rate policies, and oil price fluctuations – greatly affected financial markets in 2018. Volatility in the world economy and capital flows also had repercussions for Turkey. Fluctuating foreign exchange rates, rising inflation and subsequently, austerity measures and stimulus packages to curb these effects topped the agenda of the Turkish economy during the year.
I have full faith in Turkey’s commitment to take the steps needed on the path to prosperity and the country’s ability to overcome every difficulty. From the perspective of our own corporate history, this was a year where we recorded many positive developments and faced many challenges. I believe what is most important at this juncture is to overcome these challenges with resilience and agility.
First and foremost, I would like to emphasize that we see corporate sustainability as our most valuable asset. Our Board of Directors and corporate management team consist of visionary colleagues fully competent in their respective areas of expertise. These dedicated professionals closely monitor advances in technology, innovative approaches and regional developments. They expend extraordinary efforts to adapt our Company to these advances and our ever-changing operating environment. Supported by the independent perspective of its committees, our Board of Directors pays meticulous attention to safeguarding all stakeholder interests when making its decisions. We derive our strength in corporate sustainability from all of these factors. We base our business operations on this firm foundation and remain fully prepared for the future.
In our 88th year of operation, Turcas continued to focus on creating value for Turkey, backed by its market experience and international partnerships. Despite the negative impact of the declining value of the Turkish lira, our fuel distribution and geothermal energy business lines contributed to our operating profit in 2018.
Shell & Turcas Petrol, our subsidiary in the fuels and lubricants market, maintained its leadership position in the sector. We are monitoring the future of the industry together with our foreign partner. We are focused on delivering innovative and service-oriented operations that also generate income (e.g. Select Shops at our stations). We aim to utilize our entire infrastructure in the most efficient manner, including our terminals. The 800 MW installed capacity Denizli Natural Gas Fired Combined Cycle Power Plant, owned by our conventional energy subsidiary RWE & Turcas South Power Generation, continues to operate with state-of-theart- technology and a high availabilityratio. We are doing everything necessary to overcome the current challenges and counter the ongoing demand-driven slump in this segment. In the renewable energy segment, the 18 MW installed capacity Turcas Kuyucak (Aydın) Geothermal Power Plant – developed in Aydın, brought online in 2018 and wholly-owned by Turcas as of 2018 – completed its first year of commercial operation.
As digitilization accelerates in our industry, new business models are emerging where innovative solutions come to the forefront. This fastchanging era also presents a number of opportunities. We plan to evaluate new opportunities in 2019, in accordance with our innovative approach and our strategy to further diversify our energy portfolio. At Turcas, we remain committed to people, the environment, business ethics and our core values. As a result, we will continue to invest in the country’s new generations and Turkey’s future, undertaking social responsibility projects at the same pace.
I would like to express my heartfelt gratitude to our valued employees and business partners for their support to our mission of contributing to a better future for Turkey and achieving our goals and to all our shareholders for their confidence in us.