ÇELEBİ AR19-270720 (1)

3 Çelebi Ground Handling Inc. 2019 Annual Report The rebalancing process that began in 2018 in the Turkish economy moved on to the transformation phase in 2019. The Turkish economy had a year that was rather defined by the rugged political relationship with the US and the never-ending geopolitical risks stemming from the Middle East, as well as conjunctural developments. After embarking upon a thorny period because of the skyrocketed exchange rates in August 2018, the Turkish economy saw a contraction begin in the last quarter of the year, which lived on through the first half of 2019, and narrowed by 2.3% and 1.6% in the first and second quarters, respectively. Significant distance was paved in the rebalancing process, which was carried out by a determined stance displayed and fast measures adopted on the part of the economy administration, and which entailed harmonious cooperation from the private sector throughout the year. Having exceeded the projections to grow by 1% in the third quarter of the year, the Turkish economy upped its momentum in the fourth quarter and registered 6% growth. Thus, the growth rate that was recorded as 0.9% for 2019 full-year went above the New Economy Program (NEP) target which was set as 0.5%. The mitigated accumulated exchange rate effects and the moderate domestic demand supported the overall betterment of inflation dynamics throughout 2019. After hitting 20.35% in January 2019, the CPI ended the year at 11.84%. Starting from July, the CBRT pulled its policy rate down from 24% to 12% gradually in connection with the improvement observed in inflation outlook. This development drove the financing costs of companies down and eased their cash flows in the second half of the year. The slowdown in economic activity reflected also on external balance data. While the imports volume was down by 9.1% as at year-end, exports volume showed a limited rise of 2.1%. This positively affected the current accounts balance, as well. With the contribution of the powerful course in tourism coupled with lower oil prices, as well as weakened domestic demand, the current accounts balance began to produce surplus from June 2019, and reached a historic high of USD 5.4 billion based on the 12-month cumulative data. In the months that followed, however, the domestic demand that adopted an uptrend began restricting current surplus owing to its side effect that drives imports. The funding costs that increased amid the high inflationist environment began going down to their early-2018 levels within the frame of the rebalancing process that is also supported by the global conjuncture, and investment appetite started reviving slowly. As the Turkish lira performed relatively consistently, high interest and inflation cycle was reversed, and both public debt/GDP and current deficit/GDP ratios improved in 2019, Turkey’s international risk premium slumped. The strategies we have pursued and the performance we have registered as Çelebi Ground Handling in 2019 once again revealed that we are moving along the right path. Targeting growth and profitability ever since the first day of its operations, Çelebi Ground Handling kept utilizing its competitive superiorities optimally and generating added value in 2019, and attained successful financial and operational results. As a result of our operations carried out in line with our targets, our Company booked TL 2,220 million in total assets, and TL 572 million in shareholders’ equity. In the same period, our consolidated turnover rose to TL 1,878 million, as we posted TL 543 million in consolidated gross profit and TL 295 million in real operating income. In the same period, we offered services for 97,147 tons of cargo tonnage under our cargo operations in Turkey. Our foreign subsidiaries also attained results aligned with our projections. Celebi Airport Services India Private Limited, our subsidiary operating at the Indira Gandhi International Airport in Delhi, India, served 28,452 flights in Delhi, Ahmedabad and Kochi stations in 2018. With the addition of Bangalore and Hyderabad stations, the number of flights served increased by 54% annually to reach 43,886 in 2019. Celebi Delhi Cargo Terminal Management India Pvt. Ltd., our subsidiary that began providing cargo warehousing and handling services at Delhi International Indira Gandhi Airport, handled 457,732 tons of cargo in 2019.