2013 was a year in which we have experienced positive and negative economic developments both in Turkey and in the world. Developments experienced in the global markets in 2013 were reflected into the Turkish marketplace as well. When we look at the positive side of the picture, thanks to the rating increases which came one after the other, our country has risen to investment grade level according to two rating institutions. Rate of growth, supported by increase in internal consumption had by the year end, reached 4%. Alongside this, concerns created by FED’s plans aimed at decreasing the uptake in bonds, developments experienced in internal and external politics, increase in currency rates, and continuation of a high current account deficit have been the predominant factors in the fragility of financial stability.
Despite the uncertainties, 2013 was a historical year in which Aksoy Holding recorded remarkable growth both through organic and inorganic progress, its corporate and financial structures were strengthened, and the company surpassed the targets it set itself.
As of 2013-end, Aksoy Holding has transformed into a group of companies with four main business units, these being: (1) Oil & Energy, (2) Tourism & Real Estate, (3) International Trade, and (4) Banking.
Our involvement in the Oil & Energy sector is carried out through our flagship company, Turcas Petrol. Turcas’ flagship company in the oil sector, Shell & Turcas Petrol recorded ca. 9% growth in the automotive fuels sector and continued to be the leader in gasoline and lubricant sales and increased its diesel sales. On the energy (power) side, Turcas commenced commercial operations of its 775 MW Denizli Combined Cycle Natural Gas Fired Power Plant, a €600 Million investment realized in joint venture with RWE of Germany. Our subsidiary RWE & Turcas Electricity Generation today generates app. 2% of the electricity consumed in Turkey. Turcas has also taken significant steps for diversifying its asset portfolio with new investments in the field of renewable energy with a special focus on geothermal.
Thanks to its strengthened corporate structure, Turcas managed to raise its Corporate Governance Compliance Rating Score to 9.09 and took its place among Turkey’s most corporate companies. Furthermore, we received the “Board Empowered by Women” Award by the Sabancı University Corporate Governance Forum and became a leader in the respect among Turkish energy companies.
Aksoy Holding created a Real Estate Directorship in 2013 with respect to its Tourism & Real Estate activities. With our acquisition of Hilton Group’s 25% shares and the Social Security Institution’s 26% shares in the Conrad Hotel, Aksoy Holding became the consolidating majority shareholder at the Conrad creating significant inorganic growth. We had started a major renovation project in the hotel in 2012 with a total investment size exceeding $60 million. I am happy to announce that one-third of the rooms have been renovated and started to be served to customers by the end of 2013.
We have further established 3 new real estate companies under this business unit, namely: Aksoy Maslak Real Estate Investment Company (REIC), Aksoy Bodrum REIC and Aksoy Petroleum REIC. These companies are, respectively, involved in A+ class premium Istanbul office market, luxury segment Bodrum real estate/marina/boutique hotel market, and industrial real estate market through acquisition of fuel stations.
International trade business unit was another area of restructuring and growth for Aksoy Holding in 2013. We have renamed Enak Construction and Foreign Trade Company as Aksoy International Trade, and consolidated all the Group’s international trade, export, distribution and contracting activities under this subsidiary. We have further renamed our 50% owned Iraq subsidiary Enak Iraq Company as Aksoy Iraq Company. Aksoy International and Aksoy Iraq are the macro distributors of Gazpromneft and G-Energy lubricants as well as Johnson Control/Varta batteries in Iraq.
A major achievement in 2013 was the appointment of Aksoy Middle East Company, our newly established 90% subsidiary in Iraq, as the macro distributor of Shell lubricants in North Iraq.
We aim to become the undisputed leading distributor of lubricants in Iraq by 2018 with a minimum market share of 10%.
One of the most exciting developments of 2013 was our group’s entry into the vibrant Turkish banking sector through the acquisition of TAIB Investment Bank. We have immediately injected fresh capital into the bank, appointed a new, dynamic and experienced management team and board, implemented the state-of-the-art IT system and attained TAIB to become an active, lending bank as of the last quarter of 2013. TAIB, since then, has been lending to corporates and financial institutions and growing its assets in a profitable manner.
In summary, Aksoy Holding succeeded to increase its assets by 65% to 1.8 Billion TL and its shareholders equity by 41% to 1 Billion TL by the end of fiscal year 2013. Additionally, within the framework of corporate social responsibility, Aksoy Holding, aims to acquaint visitors with the works of Hüseyin Avni Lifij from The Belkis & Erdal Aksoy Collection at the new venue entitled HAL Hüseyin Avni Lifij Collection on the entrance floor of the Aksoy Plaza at the end of 2014. By making its support for art and art lovers at this sustainable venue, it presents the opportunity of examination and discovery of an estimable Turkish artist of the 2nd Constitutional Period.
Aksoy Holding will continue to invest in pioneering and synergic investments that shall create sustainable value for our shareholders and society. We aim to contribute to the stability of Turkey and our surrounding region with long-term projects through establishing partnerships with the world’s leading companies. While taking sure steps towards our goal, we sincerely thank all our shareholders, our partners, and our extremely valued employees who enabled us to complete yet another successful year.
CEO & Vice Chairman