KUZEY BORU A.Ş.

Quarterly Report • Mar 1, 2024

1 January - 31 December 2023 Financial Statements for the Accounting Period

Statement of Financial Position

As of 31 December 2023 (Amounts expressed in Turkish lira ("TL") unless otherwise indicated.)

		Current Period	Prior Period
		Audited	Audited
ASSETS	Notes	31 December 2023	31 December 2022
Cash and cash equivalents	3	703,075,646	24,434,646
Trade receivables
- Receivables from third parties	5	448,438,992	218,860,455
Other receivables
- Receivables from third parties	7	128,028	22,327
Stocks	8	390,174,381	222,404,290
Prepaid expenses	9	36,104,658	15,332,572
Other current assets	14	158,575	255,120
Total current assets		1,578,080,280	481,309,410
Other receivables
- Receivables from third parties	7	6,475	43,123
Tangible assets	10	985,888,201	616,105,804
Intangible assets	11	706,425	880,074
Prepaid expenses	9	83,960	-
Deferred tax asset	22	-	544,393
Total non-current assets		986,685,061	617,573,394
TOTAL ASSETS		2,564,765,341	1,098,882,804

Statement of Financial Position

As of 31 December 2023

(Amounts expressed in Turkish lira ("TL") unless otherwise indicated.)

		Current Period	Prior Period
		Audited	Audited
LIABILITIES	Notes	31 December 2023	31 December 2022
Current borrowings	6	37,852,083	143,991,310
Current portions of non-current borrowings	6	343,539,217	159,046,677
Current leasing borrowings	6	17,903,422	12,250,692
Other financial liabilities	6	751,895	783,037
Trade payables
- Payables to third parties	5	135,417,529	34,721,610
Other payables
- Payables to third parties	7	556,077	-
Payables for employee benefits	13	7,362,685	3,389,224
Deferred income	9	225,414,991	70,201,723
Current provisions
- Current provisions for employee benefits	13	2,666,747	1,633,288
- Other provisions for employee benefits	13	3,529,381	32,955
Other Current liabilities	14	7,551,766	27,813,224
Total current liabilities		782,545,793	453,863,740
Non-current borrowings	6	34,117,606	44,983,078
Non-current leasing borrowings	6	38,785,531	18,029,375
Trade payables
-Payables to third parties	5	-	380,126
Non-current provisions
- Non-Current provisions for employee		1,976,366	2,249,814
benefits	13
Deferred tax liability	22	34,037,956	-
Total non-current liabilities		108,917,459	65,642,393
Paid-in capital	15	274,273,161	243,373,105
Other refills		20,000,000	-
Premiums (discounts) related to shares		664,376,184	-
Other Accumulated Comprehensive Income
and Expenses Not to be Reclassified to Profit
and Loss
- Fixed assets revaluation increases/decreases	15	219,033,177	43,422,586
- Remeasurement gains/losses of defined		(940,988)	(609,994)
benefit plans	15
Restricted reserves separated from profit	15	4,937,014	1,035,043
Previous years' profits		272,400,654	90,153,115
Net profit for the period		219,222,887	202,002,816
EQUITY		1,673,302,089	579,376,671
TOTAL LIABILITIES		2,564,765,341	1,098,882,804

Statement of Profit or Loss and Other Comprehensive Income

For The Year Ended 31 December 2023

(Amounts expressed in Turkish lira ("TL") unless otherwise indicated.)

		Current Period	Prior Period
		Audited	Audited
		1 January –	1 January –
	Notes	31 December 2023	31 December 2022
Revenues	16	2,046,897,241	1,479,305,667
Cost of sales (-)	16	(1,409,264,011)	(1,139,816,002)
Gross profit		637,633,230	339,489,665
General and administrative expenses (-)	17	(64,795,203)	(36,876,830)
Marketing, sales, and distribution expenses (-)	18	(126,310,590)	(91,057,797)
Other income from main operations	19	20,164,151	27,114,051
Other operating expenses (-)	19	(14,768,700)	(35,005,471)
Operating profit		451,922,888	203,663,618
Expenses from investment activities (-)	20	1,401,753	-
Operating profit before financing expense		453,324,641	203,663,618
Financing revenues	21	17,150,922	5,084,901
Financial expenses (-)	21	(148,989,908)	(77,641,459)
Net monetary (loss) / gain		(120,443,634)	65,855,130
Profit before tax		201,042,021	196,962,190
Period tax expense	22	(4,915,671)	(34,500,353)
Deferred tax (expense)	22	23,096,537	39,540,979
Period profit		219,222,887	202,002,816
OTHER COMPREHENSIVE INCOME		175,279,597	43,422,586
Items that will not be reclassified
subsequently to profit or loss:
Property, plant, and equipment revaluation
increases	10	216,136,112	45,497,371
Deferred tax (expense)	22	(40,525,521)	(2,074,785)
Loss on remeasurement of defined benefit plans	13	(441,325)	(762,494)
Deferred tax revenue	22	110,331	152,499
TOTAL COMPREHENSIVE INCOME		394,502,484	245,425,402

Statement of Changes in Equity For The Year Ended 31 December 2023

(Amounts expressed in Turkish lira ("TL") unless otherwise indicated.)

		Other accumulated comprehensive
						income or expenses that will not be
		reclassified to profit or loss
		Premiums	Other	Restricted		Defined benefit
		(discounts)	reserves	reserves	Fixed assets	plan		Net profit/
		related to		separated	revaluation	remeasurement	Previous years'	(loss) for the
	Paid in capital	shares		from profit	increases	differences	profits	period	Equity total
1 January 2022	243,373,105	-	-	481,230	-	-	81,174,102	9,532,826	334,561,263
Transfers	-	-	-	553,813	-	-	8,979,013	(9,532,826)	-
Other comprehensive
income/expense	-	-	-	-	43,422,586	(609,994)	-	-	42,812,592
Pursuant to Law No. 7326	-	-	-	-	-	-	-	-	-
Capital increase	-	-	-	-	-	-	-	-	-
Net profit for the period	-	-	-	-	-	-	-	202,002,816	202,002,816
31 December 2022	243,373,105	-	-	1,035,043	43,422,586	(609,994)	90,153,115	202,002,816	579,376,671
1 January 2023	243,373,105	-	-	1,035,043	43,422,586	(609,994)	90,153,115	202,002,816	579,376,671
Transfers	15,853,306	-	-	3,901,971	-	-	182,247,539	(202,002,816)	-
Other comprehensive
income/expense	-	-	-	-	175,610,591	(330,994)	-	-	175,279,597
Share and equity-based
transactions	-	664,376,184	20,000,000	-	-	-	-	-	684,376,184
Capital increase	15,046,750	-	-	-	-	-	-	-	15,046,750
Net profit for the period	-	-	-	-	-	-	-	219,222,887	219,222,887
31 December 2023	274,273,161	664,376,184	20,000,000	4,937,014	219,033,177	(940,988)	272,400,654	219,222,887	1,673,302,089

Statement of Cash Flow

For The Year Ended 31 December 2023

(Amounts expressed in Turkish lira ("TL") unless otherwise indicated.)

		Current Period	Prior Period
		1 January –	1 January –
		31 December
	Notes	2023	31 December 2022
A. CASH FLOWS FROM BUSINESS ACTIVITIES
Profit for the Period		219,222,887	202,002,816
Adjustments to Reconcile Profit for the Period
Adjustments related to depreciation and amortization expenses	10,11	39,618,836	32,948,550
Adjustments for losses/(gains) on disposal of fixed assets	20
Adjustments to litigation provisions	13	3,509,381	825,313
Fixes for permission provisions	13	1,675,512	1,202,578
Interest expense-related fixes		(16,272,575)	(1,039,505)
Adjustments to severance pay expense	13	1,993,547	-
Adjustments regarding foreign currency translation differences		(40,654,742)	(28,131,493)
Adjustments for impairment of trade and other receivables		6,646	(682,346)
Monetary loss		(2,286,720)	(921,454)
Adjustments to tax expense/income	22	(5,832,841)	(33,042,713)
Operating Profit Before Changes in Working Capital		200,979,931	187,940,312
Adjustments for increase/decrease in trade receivables		(228,801,235)	(63,817,755)
Adjustments for increase/decrease in stocks		(167,770,091)	(129,478,097)
Adjustments for increase/decrease in other operating receivables		(105,701)	38,544
Adjustments for increase/decrease in prepaid expenses		(20,856,046)	112,803,772
Adjustments for increase/decrease in other assets		96,545	199,243
Adjustments for increase/decrease in trade payables		100,315,793	(5,860,218)
Adjustments for increase/decrease in other operating liabilities		556,077	(962,403)
Adjustments for increase/decrease in deferred revenues		155,213,268	(153,012,257)
Adjustments for increase/decrease in other liabilities		(20,261,458)	18,945,328
Adjustments for increase/decrease in employee benefits		3,973,461	1,295,126
Interests received		16,272,575	1,039,505
Severance payments paid	13	(1,823,908)	(308,053)
Cash Flows from Operations		37,789,211	(45,266,527)
B. CASH FLOWS FROM INVESTING ACTIVITIES
Cash outflows from the sale of tangible and intangible assets	10,11	(193,139,635)	(119,456,719)
Cash inflows from the sale of tangible and intangible assets	10,11	48,163	429,120
Capital increase		15,046,750	-
Cash Flows from Investment Activities		(178,044,722)	(119,027,599)
C. CASH FLOWS FROM FINANCE ACTIVITIES
Cash inflows/outflows arising from other receivables from related
parties/other payables to related parties		684,376,184	-
Cash inflows from financial borrowings	6	935,590,315	560,609,885
Cash outflows from financial debt payments	6	(707,840,177)	(359,496,963)
Interest paid	21	(93,229,811)	(63,907,167)
Cash flows from financing activities		818,896,511	137,205,754
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C)		678,641,000	(27,088,372)
D. CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE PERIOD		24,434,646	51,523,018
Balance at the end of the period	3	703,075,646	24,434,646