Petkim Petrokimya Anonim Sirketi : Financial Statement For the Period From January to March 2024

CONVENIENCE TRANSLATION INTO ENGLISH OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ORIGINALLY ISSUED IN TURKISH

PETKİM PETROKİMYA HOLDİNG

ANONİM ŞİRKETİ AND ITS SUBSIDIARIES

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD

FROM JANUARY 1 TO MARCH 31, 2024

CONTENTS	Page
Condensed Consolidated Interım Balance Sheets	1-3
Condensed Consolidated Interim Statement of Profit or Loss
and Other Comprehensive Income	4-5
Condensed Consolidated Interim Statement of Changes in Equity	6
Condensed Consolidated Interim Statement of Cash Flow	7
Notes to the Condensed Consolidated Financial
Statements for the Interim Period January 1- March 31, 2024	8-45

CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Balance Sheet as At March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

		Unaudited	Audited
			December
	Notes	March 31 , 2024	31,2023
ASSETS
CURRENT ASSETS
Cash and cash equivalents	4	4.225.696	4.648.189
Financial investments	5	346.600	343.986
Trade receivables		8.889.810	8.682.718
- Trade receivables from related parties	19	2.004.996	1.835.903
- Trade receivables from third parties	6	6.884.814	6.846.815
Other receivables		96.157	141.212
- Other receivables from related parties	19	50.390	4.774
- Other receivables from third parties		45.767	136.438
Inventories	7	5.948.187	7.065.933
Prepaid expenses		1.251.640	889.123
- Prepaid expenses to third parties	12	1.063.791	732.012
- Prepaid expenses to related parties	19	187.849	157.111
Derivative financial instruments		90.518	69.249
Other current assets		951.346	1.509.740
- Other current assets to third parties		951.346	1.509.740
Current tax assets	15	49.424	47.008
TOTAL CURRENT ASSETS		21.849.378	23.397.158
NON-CURRENT ASSETS
Financial investments	5	76.114	76.114
Derivative financial assets		58.022	47.322
Investments accounted for using equity method	22	27.008.160	27.647.288
Other receivables		21.195	21.521
- Other receivables from related parties	19	21.195	21.444
- Other receivables from third parties		-	77
Investment properties	10	19.364.141	19.364.141
Property, plant and equipment	9	36.486.810	37.210.753
Right of use assets		851.767	1.009.107
Intangible assets		344.097	359.886
Prepaid expenses		381.907	436.808
- Prepaid expenses to related parties	19	31.500	39.442
- Prepaid expenses to third parties	12	350.407	397.366
Deferred tax assets	15	563.870	558.988
Other non-current assets		95.194	91.391
- Other non-current assets related
to third parties		95.194	91.391
TOTAL NON - CURRENT ASSETS		85.251.277	86.823.319
TOTAL ASSETS		107.100.655	110.220.477

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Balance Sheet as At March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

		Unaudited	Audited
	Notes	March 31, 2024	December 31, 2023
LIABILITIES
CURRENT LIABILITIES
Short-term borrowings		16.114.470	15.298.239
- Short-term borrowings to third parties		16.043.768	15.157.395
- Bank borrowings	8	12.764.167	6.226.307
- Short term lease liabilities	8	43.078	43.778
- Other financial liabilities	8	3.236.523	8.887.310
- Short-term borrowings to related parties		70.702	140.844
- Short term lease liabilities to related parties	19	70.702	140.844
Short-term portion of long-term borrowings		4.295.532	4.108.354
- Short-term portion of long-term borrowings
to third parties		4.295.532	4.108.354
- Bank borrowings	8	4.295.532	4.108.354
Derivative financial instruments		336	17.765
Trade payables		7.747.063	9.501.221
- Trade payables to related parties	19	5.198.100	5.153.746
- Trade payables to third parties	6	2.548.963	4.347.475
Payables related to employee benefits		193.523	135.827
Other payables		28.146	28.079
- Other payables to related parties	19	87	100
- Other payables to third parties		28.059	27.979
Deferred revenue		714.335	642.953
- Deferred revenue from related parties	19	233.889	75.210
- Deferred revenue from third parties	11	480.446	567.743
Short term provisions		988.162	916.917
- Provision for employee benefits	13	985.337	913.929
- Other short term provisions	20	2.825	2.988
Other current liabilities		145.230	133.268
- Other current liabilities related
to third parties		145.230	133.268
TOTAL CURRENT LIABILITIES		30.226.797	30.782.623
NON-CURRENT LIABITIES
Long term financial liabilities		14.549.080	15.679.414
- Long term financial liabilities to third parties		14.329.230	15.246.468
- Bank borrowings	8	14.175.085	15.053.374
- Long-term lease liabilities to third parties	8	154.145	193.094
- Long-term borrowings to related parties		219.850	432.946
- Long term lease liabilities to related parties	19	219.850	432.946
Deferred revenue		1.367.236	1.450.804
- Deferred revenue from related parties	19	1.367.236	1.450.804
Long term provisions		1.126.982	868.413
- Provision for employee
termination benefits	13	1.126.982	868.413
Deferred income tax liabilities	15	2.397.951	2.309.988
TOTAL NON - CURRENT LIABILITIES		19.441.249	20.308.619
TOTAL LIABILITIES		49.668.046	51.091.242

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Balance Sheet as At March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

		Unaudited	Audited
	Notes	March 31, 2024	December 31, 2023
EQUITY
Equity attributable to owners of the
parent company		57.160.022	58.841.378
Share capital	14	2.534.400	2.534.400
Adjustment to share capital	14	32.469.856	32.469.856
Share premium		576.125	576.125
Other comprehensive (expense) not to be
reclassified to profit or loss		(1.065.740)	(514.634)
- Actuarial loss arising from defined benefit
plan		(1.067.632)	(515.629)
Share of other comprehensive income of
investments accounted
for using equity method that will not
be reclassified to profit or loss		1.892	995
Other comprehensive (expense)/income
to be reclassified to profit or loss		(3.434.042)	(1.433.269)
- Currency translation differences		(921.241)	(549.418)
- (Loss)/ Gain on hedge reserves		(1.091.477)	(484.693)
- (Loss)/ Gain on cash flow hedges		(1.091.477)	(484.693)
Share of other comprehensive income
of investments accounted for using
equity method that will be reclassified to
profit or loss		(1.421.324)	(399.158)
Restricted reserves		3.104.186	3.104.186
Retained earnings		22.104.714	13.601.486
Net profit for the period		870.523	8.503.228
Non-controlling interest		272.587	287.857
TOTAL EQUITY		57.432.609	59.129.235
TOTAL LIABILITIES AND EQUITY		107.100.655	110.220.477

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income for Three Month Period Ended At March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

					Unaudited	Unaudited
					January 1-	January 1-
				Notes	March 31, 2024	March 31, 2023
PROFIT OR LOSS
Revenue				16.567.964	16.349.222
Cost of sales				(16.681.468)	(17.936.948)
GROSS LOSS				(113.504)	(1.587.726)
General administrative expenses		16	(783.678)	(737.564)
Selling, marketing and distribution expenses		(272.951)	(305.591)
Other operating income				671.835	249.082
Other operating expenses				(615.202)	(286.397)
OPERATING LOSS				(1.113.500)	(2.668.196)
Income from investing activities			115.224	849.506
Expense from investing activities			(96)	(24)
Income	from investments	accounted	by equity	22	667.902	-
method
OPERATING LOSS BEFORE
FINANCIAL INCOME AND EXPENSE			(330.470)	(1.818.714)
Financial income			17	584.168	992.159
Financial expenses			17	(2.807.460)	(1.965.913)
Monetary gain (loss)				3.705.153	(76.281)
PROFIT/(LOSS) BEFORE TAX
FROM CONTINUED OPERATIONS			1.151.391	(2.868.749)
Tax	(expense)/income	from	continuing		(317.721)	(480.273)
operations
- Current tax (expense)/income		15	-	(26.557)
- Deferred tax (expense)/income		15	(317.721)	(453.716)
PROFIT (LOSS) FOR THE PERIOD
FROM CONTINUED OPERATIONS			833.670	(3.349.022)
PROFIT (LOSS) FOR THE PERIOD			833.670	(3.349.022)
DISTRIBUTION OF INCOME
FOR THE PERIOD
- Non-controlling interest				(36.853)	(40.236)
- Owners of the parent company			870.523	(3.308.786)
Earnings per share				0,3435	(1,3056)
-Earnings per Kr1 number of 1 shares		18	0,3435	(1,3056)
from continued operations

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income for Three Month Period Ended At March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

		Unaudited	Unaudited
		January 1 -	January 1 -
	Notes	March 31, 2024	March 31,2023
OTHER COMPREHENSIVE INCOME
Items to be reclassified to profit or loss	(1.979.190)	276.528
Currency translation differences	(351.197)	291.841
Other comprehensive gain related
to cash flow hedges	(786.279)	(19.141)
Taxes relating to gain on cash flow hedge	180.453	3.828
loss from translation of foreign currency of
investments using equity method	(995.707)	-
Gain on hedges from investments accounted
with using equity method	(26.460)	-
Items not to be reclassified to profit or loss	(551.106)	-
Defined benefit plans remeasurement losses	(716.887)	-
Taxes relating to remeasurements of defined
benefit plans	164.884
Actuarial gain arising from defined benefit plans
accounted for investment using equity method	897	-
OTHER COMPREHENSIVE (EXPENSE)/ INCOME	(2.530.296)	276.528
TOTAL COMPREHENSIVE EXPENSE	(1.696.626)	(3.072.494)
Attributable to:
Non-controlling interests	(15.270)	(46.670)
Owners of the parent company	(1.681.356)	(3.025.824)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Statement of Changes in Equity for Three Months Interim Period 1 January - March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

			Other comprehensive (expense)
			/ income not to be reclassified to	Other comprehensive (expense) / income to be
				profit or loss		reclassified to profit or loss
				Shares of other
				comprehensive			Shares of other
				income of			comprehensive
				investments			income of
			Actuarial	accounted for			investments
			loss arising	using equity			accounted for					Equity
			from	method that will			using equity					attributable to
		Adjustment	definet	not be	(Loss) / gain	Currency	method that will			Net profit		owners of the	Non
	Share	to share	benefit	reclassified to	on cash flow	translation	be reclassified to	Share	Restricted	(loss) for the	Retained	parent	Controlling
	capital	capital	plan	profit or loss	Hedges	Differences	profit or loss	Premium	Reserves	period	Earnings	company	interests	Total Equity
January 1, 2023	2.534.400	32.469.663	(482.022)	-	67.656	(817.262)	-	576.125	3.098.614	(1.473.435)	15.206.917	51.180.656	66.207	51.246.863
Transfers	-	-	-		-	-	-	-	-	1.473.435	(1.473.435)	-	-	-
Total comprehensive
income/(expense)
- Other comprehensive
income/ (expense)	-	-	-	-	(9.830)	292.792	-	-	-	-	-	282.962	(6.433)	276.529
-Net (loss) for the period	-	-	-	-	-	-	-	-	-	(3.308.786)	-	(3.308.786)	(40.236)	(3.349.022)
				-			-
March 31, 2023	2.534.400	32.469.663	(482.022)	-	57.826	(524.470)	-	576.125	3.098.614	(3.308.786)	13.733.482	48.154.832	19.538	48.174.370
January 1, 2024	2.534.400	32.469.856	(515.629)	995	(484.693)	(549.418)	(399.158)	576.125	3.104.186	8.503.228	13.601.486	58.841.378	287.857	59.129.235
Transfers	-	-	-	-	-	-	-	-	-	(8.503.228)	8.503.228	-	-	-
Total comprehensive
income / (expense)
- Other comprehensive
income /(expense)	-	-	(552.003)	897	(606.784)	(371.823)	(1.022.166)	-	-	-	-	(2.551.879)	21.583	(2.530.296)
- Net profit for the period	-	-	-	-	-	-	-	-	-	870.523	-	870.523	(36.853)	833.670
March 31, 2024	2.534.400	32.469.856	(1.067.632)	1.892	(1.091.477)	(921.241)	(1.421.324)	576.125	3.104.186	870.523	22.104.714	57.160.022	272.587	57.432.609

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Condensed Consolidated Interim Statement of Cash Flow for Three Month Period Ended At March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

		Unaudited	Unaudited
		January 1 -	January 1-
	Notes	March 31, 2024	March 31, 2023
A. Cash flows from operating activities		(1.202.913)	(2.229.291)
Net profit (loss) for the period (I)		833.670	(3.349.022)
Adjustments related to reconciliation of net profit (loss) for the period: (II)		(1.843.665)	(332.407)
Adjustments for depreciation and amortization		1.171.972	1.208.474
Adjustments for impairments		(49.183)	(78.476)
- Adjustments (reversals) for impairment of inventories	7	(49.183)	(78.476)
Adjustments for provisions		265.398	426.312
- Adjustments (reversals) for provision employment termination benefits		265.398	426.312
Adjustments for interest (income) and expense		787.181	821.085
- Adjustments for interest income		(112.845)	(118.994)
- Adjustments for interest expense		900.026	940.079
Adjustments for unrealized foreign currency translation differences		876.601	1.792.405
Adjustments for tax losses		317.721	480.273
Adjustments for (gain) loss on sale of property, plant and equipment		(2.989)	(2.177)
Adjustments for fair value increase in financial investments		(60.020)	(123.231)
Adjustments for fair value increase in investment property		-	(699.250)
- Undistributed income of investments valued by equity method adjustments regarding profits		(667.902)	-
Monetary (gain)/loss		(3.739.212)	(4.156.947)
Adjustments for revenues from government grants		(743.232)	(875)
Changes in working capital (III)		(134.686)	2.077.331
Increase/(decrease) in trade receivables		(209.295)	1.930.897
(Increases)/decrease in other receivables		45.381	1.015
Increase/(decreases) in inventory		1.224.748	1.054.727
Decrease/(increase) in prepaid expenses		(330.232)	959.809
Decrease/(increase) in trade payables		(1.010.926)	(2.337.000)
Decrease/(increase) in other payable		67	2.125
Decrease/(increase) in payables to employees		(359.398)	140.836
Increase in deferred revenue		(12.186)	166.659
Decrease/(increase) in derivative financial instruments		(31.969)	3.781
Other decrease/(increase) in working capital		549.124	154.482
Cash flows from operating activities (I+II+III)		(1.144.681)	(1.604.098)
Employee termination benefits paid		(58.232)	(600.375)
Income taxes paid		-	(24.818)
B. Cash flows from investing activities		(692.394)	(9.916)
Cash outflows due to purchases of tangible and intangible assets		(667.442)	(568.708)
Proceeds from sale of property, plant and equipment and intangible assets		3.610	2.439
Cash outflows due to advances given to third parties		22.616	(168.995)
Other cash inflows/(outflows)		(51.178)	725.348
C. Cash flows from financing activities		1.949.025	(12.160.253)
Proceeds from borrowings	8	12.209.064	11.490.004
Repayments of borrowings	8	(4.820.182)	(869.371)
Proceeds from other financial liabilities	8	945.159	4.462.800
Repayments of other financial liabilities	8	(5.562.742)	(9.861.553)
Repayments of bond issued	8	-	(16.516.430)
Cash outflow related to lease agreements		(48.074)	(63.287)
Interest received		112.845	118.994
Interest paid		(887.045)	(921.410)
D. Net (decrease)/ increase in cash and cash equivalents before foreign currency
translation differences (A+B+C)		53.718	(14.399.460)
E. Inflation impact on cash and equivalents		(615.351)	(2.157.576)
F. Effect of currency translation differences on cash and cash equivalents		139.140	138.668
Net increase in cash and cash equivalents (D+E+F)		(422.493)	(16.418.368)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF PERIOD	4	4.648.189	25.124.340
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	4	4.225.696	8.705.972

The accompanying notes are an integral part of these condensed consolidated financial statements.

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CONVENIENCE TRANSLATION INTO ENGLISH OF FINANCIAL STATEMENTS ORIGINALLY ISSUED IN TURKISH

Petkim Petrokimya Holding Anonim Şirketi and Its Subsidiaries

Notes to the Condensed Consolidated Interim Financial Statements for The Period Between 1 January 1 and March 31, 2024

(Amounts expressed in thousands of Turkish Lira ("TL") in terms of the purchasing power of the TL at March 31, 2024 unless otherwise indicated.)

1. Group's Organisation and nature of operations

Petkim Petrokimya Holding A.Ş. ("Petkim" or "the Company") was established on 3 April 1965. The Company started its investment activities in İzmit-Yarımca and initially established the Ethylene, Polyethylene, Chlorine Alkali, VCM and PVC plants in 1970 in the Yarımca Complex and in the following years, construction of other plants continued. In 1985, Aliağa Petrochemical Complex was established with advance technology and optimum capacity. The Company has 14 main plants, 1 bag production unit and 1 solid waste incineration facility. The Company operates its facilities in the petrochemical sector in Turkey.

The major operations of the Company and its subsidiaries are as follows:

• To establish and to operate factories, plants in Turkey home or abroad in relation to the petro- chemistry, chemistry and such other industrial sectors,
• To process and to treat the raw materials and supplementary/ auxiliary substances, materials and chemicals necessary for the production of petrochemicals, chemicals and such other materials/substances by procuring such materials/substances either from Turkey or abroad, to produce such materials/substances, and to carry out and to perform the domestic and international trading thereof,
• In accordance with the Law 4628 on the Electricity Market, and the related legislation thereto, to establish power plants as per the auto-producer's license in order to meet its own need for electricity and heat/thermal energy at first, to generate electricity and heat/ thermal energy, to sell the generated electricity and heat/thermal energy and/or the capacity to other legal persons holding the requisite licenses or to the eligible consumers as per the mentioned legislation in case of any surplus production, and to carry out and to perform the activities in relation to the obtainment of any and all kinds of equipment and fuel in relation to the electricity power/ generating plant provided that such activities are not of commercial nature,
• To carry out and to perform the activities in relation to the importation or purchase from domestic resources, of natural gas on wholesale and retail basis, utilization, storage of natural gas imported and purchased, in accordance with the legislation thereto,
• To carry out and to perform pilotage, trailer and mooring activities, to operate ports, cruise ports, passenger terminals, seaports, docks, harbors, berths, liquid fuel/liquefied petroleum pipeline and buoy systems, and such other similar onshore facilities/plants, and to be involved in port management activities, to offer port, agency, provision, bunkering services, and to provide that such services are offered by third parties either by way of leasing or such other methods when required, and to purchase, to have built and to lease, to sell the necessary vessels/naval platforms, and to establish either domestic or international partnerships in relation thereto, to operate warehouses, and to offer warehousing services,
• To support and to donate to the foundations, associations, educational institutions, which have been established for social purposes, and to such other persons, institutions and organizations in accordance with the principles prescribed by the Capital Markets Board.

The "Share Sales Agreement", with respect to the sale of 51% of shares of Petkim Petrokimya Holding A.Ş. (which has been in the privatization process for several years) to SOCAR & Turcas Petrokimya A.Ş. ("STPAŞ"), 44% of which previously owned by the Republic of Turkey Ministry Privatization Administration ("Administration") and 7% State Pension Fund ("Emekli Sandığı Genel Müdürlüğü") transferred to Republic of Turkey Social Security Institution, was signed on 30 May 2008.

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