Eregli Demir Celik Un/Adr

Ladies and gentlemen, thank you for standing by. I am Paulina, your chorus call operator. Welcome and thank you for joining the Erdemir conference call and live webcast to present and discuss the first quarter 2026 financial results. All participants will be in a 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. Please note, Erli Demir Celik Fabrikalaritas Erdemir may, when necessary, make written or verbal announcements about forward-looking information, expectations, estimates, targets, assessments, and opinions. Erdemir has made the necessary arrangements about the amounts and results of such information Soud's disclosure policy and has shared such policy with the public through the Erdemir website in accordance with the Capital Markets Board regulations. As stated in related policy, information contained in forward-looking statements, whether verbal or written, should not include unrealistic assumptions or forecasts. It should be noted that actual results could materially differ from estimates, taking into account the fact that they are not based on historical facts, but arguing from expectations, beliefs, plans, targets, and other factors which are beyond the control of our company. As a result, forward-looking statements should not be fully trusted or taken as granted. Forward-looking statements should be considered valid only considering the conditions prevailing at the time of the announcement. In cases where it's understood that forward-looking statements are no longer achievable, Such matter will be announced to the public and the statements will be revised. However, the decision to make a revision is a result of subjective evaluation. Therefore, it should be noted that when a party is coming to a judgment based on estimates and forward-looking statements, our company may not have made revision at the particular time. Our company makes no commitment to make regular revision, which would fully cover changes in every parameter. New factors may arise in the future which may not be possible to foresee at this moment in time. At this time, I would like to turn the conference over to Ms. Idil Onay Ergin, Investor Relations Director. Ms. Ergin, you may now proceed.

Thank you very much Fulna. Good afternoon everyone. Welcome to our conference call and webcast of Algenist for the first quarter of 2026. First I will go through our master presentation which you can find on our website and you can also follow it through the webcast. Then at the end of this presentation there will be a Q&A session as usual. Our presentation consists of two sections, as you already know. The first one is the market overview and then the financial results. So let's start with the commodity prices. On page 3, you will see the prices of two related commodities and HRCs. Let's take a look at Colt & Cole, Arvinor, Scrap and HRC prices. In the first quarter of 2026, the cotton coal market displays a volatile outlook, caused between weak steel demand and seasonal supply-side developments. Throughout the quarter, the slowdown in steel production in China, weakness in the construction sector, and lower than expected end-user demand, limited demand for cotton coal. Accordingly, Coca-Cola fluctuates in the range of $218 and $253 per ton and close the quarter at around $240 per ton. I don't know if prices followed a similar trend to the previous quarter in Q1 2026, but fundamental dynamics remained weak. While prices remained resilient around $105 per ton, they fluctuate between $96 and $110 per ton throughout the quarter due to the impact of geopolitical uncertainties. High port inventories in China which are still production compared to the previous years and new supply expectations puts downward pressure on prices. Turkish scrap import prices gradually increased throughout the quarter ranging from $370 and $398 per ton and rose about $400 per ton by the end of the quarter due to the impact of tensions in the Middle East. On the bottom left, we show HRT prices in Black Sea, China and South Europe. The global outlook for the first quarter of 2026 was shaped by geopolitical risks, uncertainties in trade policies, and monetary policy expectations. Regional divergences became more pronounced in the global HRC market during the first quarter. In Europe, prices were determined more by regulations and supply expectations than by demand. Seabank and freight measures made imports more difficult, raising the price expectations of domestic producers. On the Chinese side, the market is caught between policy expectations and weak domestic demand. On the other hand, in Turkey, the cost-demand balance determines the pricing. While the upward trend in the Turkish market is expected to continue as uncertainty persists in global markets, it also seems likely that changes in trade flows due to the war will support the Turkish steel market. Turkey's trade advantage and access to nearby markets supports its competitiveness. On page 4, you will see the production, consumption, exports and import figures of Turkish steel market. In the first two months of 2026, Turkey maintains its position as Europe's largest and world's seventh-largest crystal producer. In the January-February period, crystal production increased by 5% to 6.4 million tons, and this growth reflects resilience in domestic output despite the challenging global steel market conditions. Going back to the slide, while production remains at the same level as last year, domestic spill consumption continues its upward trend, rising by 3% to 6.7 million tons in the first few months of the year. Imports and exports decreased by 13% over the same period. As a result, the export-import coverage ratio remained at 74% in the first two months of 2026, the same as the previous year. The UAE remains Turkey's largest export market in the first two months, followed by MENA and CIS. Despite the annual decrease, China faced the largest supplier of flat steel products in the first few months, and China was followed by South Korea, Russia, and Malaysia. The increasing impact of the EU's carbon border adjustment mechanism, CBAM, in 2026 has made carbon intensity a more prominent striking factor in steel imports. The new safeguard measures expected to come into effect on July 1st are anticipated to be detailed on a country-by-country basis in the coming days, which is expected to eliminate uncertainty. So let's take a look at the financial results and operational metrics on page 6. You will see the summary of our first-class results. We achieved $1.4 billion revenue, also we generated $137 million EBITDA and $9 million net profit. On page 7, you will see the operational indicators of our company. Following the commissioning of the last two investments in our investment package in the second quarter of 2025, Our crude fuel capacity utilization ratio has gradually increased since then and reached 96%. Accordingly, sales and production levels returned to their normal levels. Supported by strong demand, we achieved sales of 2.1 million tons in the first quarter, and we aim sales volumes of over 8.2 million tons in 2026. So let's take a look at the segmental breakdown of domestic sales and export volumes on page 8. As you can see from the pie chart, there has been a slight change between sectors when we compare it to last year's breakdown. There has been a transition from distribution chains, general manufacturing, and auto to Python profile on a percentage basis. We see similar changes between sectors in the wrong product, although its share in total sales is relatively small. Our export volume was 312,000 tons in Q1, representing around 15% export share in total sales. Although our main focus is the domestic market, we also consider export as an alternative market. This year we aim to keep the share of exports in total sales in the 10-15% range. On page 9, you can find a breakdown of revenue for domestic and export sales. 84% of the revenue comes from domestic sales, which is in line with the domestic volume. Despite import pressure in the domestic market, we achieved to generate $137 million EBITDA. We generated $73 EBITDA per ton in three months. Our EBITDA per ton guidance for 2026 stands in the range of $75 and $85 per ton. In the coming quarter of 2026, We expect Elisa Percon to increase through cost reduction and increase efficiency resulting from newly commissioned facilities, also increasing HIC prices and our companies increasing sales volumes. The company returned to net profit once the impact stemming from cancellation of inflation accounting disappeared. We generated $9 million net profit in the first quarter of 2026. On page 10, you can see how we reached a net profit from Edista. One of the largest items was depreciation, which was $82 million in the first quarter. The other major item in the chart was financial expenses of $54 million. The tax expense amounted to $11 million, and after other expenses, net profit was $9 million. In the graph below, you can see a bit of a change in cash bridge. Our net working capital increased compared to the fourth quarter due to the decreasing inventories and increasing trade payables. Also, we spend around $70 million to investment activities in three months. This amount also includes capex and advances paid for capital expenditures as well. The reason for the change in credit payments is that we paid off our maturing financial debt to reduce our credit interest costs. On page 11, we will see the historical frames of financial borrowings and net debts.

As you can see in the financial borrowing chart, our financial borrowings have decreased by the amount of our credit payments.