Harvesting Profits in a Volatile Climate: 5 Strategic Takeaways from Merko Gıda’s 2025 Performance

The journey from a tomato field in Bursa to a dinner table in Europe is often viewed through the lens of agriculture, but for Merko Gıda Sanayi ve Ticaret A.Ş., it is equally a feat of sophisticated financial navigation. While tomato paste is a staple of everyday life, the business behind it operates within a high-stakes arena of global trade and hyperinflationary economics. In an environment where the domestic currency undergoes rapid shifts, how does a local producer maintain global competitiveness while shielding its balance sheet?

The following insights, drawn from Merko Gıda’s special accounting period ending December 31, 2025, reveal a company that functions as much like a financial strategist as it does a food producer.

1. The Hyperinflation Shield: Mastering TMS 29

In a hyperinflationary economy, surface-level profit numbers are often illusory. To counter this, Merko Gıda utilizes TMS 29 (Financial Reporting in High Inflation Economies), a standard that recalibrates financial data to reflect actual “purchasing power.” This isn’t merely a compliance exercise; it is a vital tool for revealing the “real” economic health of the company.

According to Note 2.1.1, the scale of this adjustment is significant. The specific index coefficient used for December 31, 2025, stood at 3513.87, a sharp ascent from the 3132.17 recorded in June 2025. By applying these adjustments, Merko ensures that its capital and assets are not being eroded by the hidden tax of inflation.

As the report explicitly states regarding the necessity of these adjustments:

“Financial statements belonging to previous periods are also adjusted by multiplying by the correction coefficient at the end of the current reporting period to be expressed in terms of the purchasing power at the balance sheet date.”

2. Currency Hedge: How the 63% Export Ratio Neutralizes Lira Volatility

While domestic inflation presents a pricing challenge, Merko Gıda’s revenue model (found in Note 21) serves as a robust natural hedge. During the reporting period, the company’s sales breakdown revealed a heavy lean toward international markets:

• Export Sales (Yurtdışı Satışlar): ~176 Million TL
• Domestic Sales (Yurtiçi Satışlar): ~100 Million TL

Generating roughly 63% of its revenue from exports allows Merko to decouple its profit margins from local CPI volatility. More importantly, this model provides essential USD and Euro liquidity—stable currencies that provide a “hard money” buffer against Lira fluctuations. By pricing in foreign currency while maintaining a localized cost base for production, Merko effectively transforms domestic currency weakness into a strategic export advantage.

3. Leadership with a Global Pedigree: The AMITOM Advantage

The strength of an agri-business is often tied to its market intelligence. Board Chairman Alistair Baran Blake provides Merko Gıda with a level of “information asymmetry” that few competitors can match. Educated at Reading University, Blake’s background spans everything from frozen pea production to global food consultancy.

The strategic “X-factor” is his role as President of the International Mediterranean Tomato Council (AMITOM). Holding the top seat at an international industry body grants Merko Gıda early access to global supply trends, crop forecasts, and regulatory shifts across the Mediterranean basin before they hit the open market.

“Mr. Blake, who graduated as a Food Engineer from the University of Reading in 2004, has held roles from production directorship to board membership… and currently serves as the President of the International Mediterranean Tomato Council (AMITOM).”

4. The Frigo-Pak Power Block: Beyond Mere Synergy

Merko Gıda’s relationship with Frigo-Pak Gıda Maddeleri San. ve Tic. A.Ş. is less of a partnership and more of a vertically and horizontally integrated power block. The “Activity Report” reveals a near-total board overlap: Alistair Baran Blake, İsmail Aksaç, Hüsnü Hakan Güner, Merve Uçar, and Hüseyin Günhan Kayır all hold concurrent leadership roles at both entities.

This “ecosystem” approach creates significant operational stability through bi-directional trade. As detailed in Note 4:

• Merko conducted 12 million TL in product and service purchases from Frigo-Pak.
• Merko conversely generated 4.4 million TL in product sales to Frigo-Pak.

This integrated leadership ensures that logistics, expertise, and inventory are optimized across the two companies, creating a resilient agri-food network that is greater than the sum of its parts.

5. The Jan 2026 Milestone: Protecting the Core

The most telling indicator of the company’s forward-looking strategy occurred just after the reporting period. On January 9, 2026, the Capital Markets Board (SPK) approved an amendment to the company’s articles of association regarding the issuance of privileged shares (imtiyazlı pay ihracı).

For the savvy investor, this is a clear signal of governance strategy. Privileged shares are a primary tool for protecting the control of the founding family or core holding company during periods of capital expansion. By securing this approval, Merko Gıda is preparing its corporate architecture for future growth, ensuring that as the company scales or seeks new capital, the strategic vision remains firmly in the hands of its established leadership.

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The Agri-Business of the Future

Merko Gıda’s 2025 performance illustrates a company that has evolved into a “fintech-adjacent” agri-producer. By mastering the complexities of TMS 29, leveraging its AMITOM-connected leadership for market intelligence, and maintaining a high-liquidity export ratio, the company has built a defensive perimeter against economic volatility.

As we look toward the future of global food systems, a critical question remains: In an era of climate change and economic shifts, is the success of a food company more dependent on the soil it tills or the financial instruments it masters? Merko Gıda’s performance suggests that, for the modern industry leader, the answer is inextricably both.

Briefing Document: Merko Gıda Sanayi ve Ticaret A.Ş. Interim Financial and Activity Report (December 31, 2025)

Executive Summary

This document synthesizes the interim financial results and operational status of Merko Gıda Sanayi ve Ticaret A.Ş. (“the Company”) for the period ending December 31, 2025. The Company, a long-standing player in the Turkish food industry specializing in tomato products, shows significant asset growth and maintains a stable profit margin despite a hyperinflationary economic environment.

Critical takeaways include:

• Audit Conclusion: The independent limited review conducted by Çözüm Ünlüer (Member of Nexia) found no material non-compliance with TMS 34 (Interim Financial Reporting) standards.
• Asset Expansion: Total assets increased to approximately 2.7 billion TL, driven largely by a surge in inventories and short-term financial investments.
• Operational Stability: The Company remains profitable, reporting a net period profit of 53.1 million TL.
• Strategic Governance: There is significant leadership overlap between Merko Gıda and Frigo-Pak Gıda, reflecting a consolidated management strategy within the related group of companies.
• Inflationary Accounting: Financial statements have been adjusted for hyperinflation in accordance with TMS 29, utilizing a correction coefficient based on TUIK’s Consumer Price Index.

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1. Corporate Profile and Governance

1.1 Organizational Overview

Founded in 1982, Merko Gıda focuses on the production of tomato paste and diced tomatoes. The Company operates out of its headquarters in Istanbul and maintains a primary production facility in Mustafakemalpaşa, Bursa. It also holds a 3.93% stake in Frigo-Pak Gıda Maddeleri San. ve Tic. A.Ş.

1.2 Board of Directors (Effective November 14, 2025)

The leadership structure highlights a strategic alliance with AG Girişim Holding and Frigo-Pak Gıda:

1.3 Shareholding Structure (As of December 31, 2025)

• AG Girişim Holding A.Ş.: 23.65%
• Merko Holding A.Ş.: 5.02%
• Share Buybacks: 1.82%
• Others (Public): 69.51%
• Total Paid-in Capital: 115,123,372 TL

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2. Financial Performance Analysis

2.1 Balance Sheet Highlights (Comparative TL)

The Company experienced notable growth in its balance sheet from June 30, 2025, to December 31, 2025.

2.2 Key Asset Drivers

• Inventories (Stoklar): Tripled from 114.3 million TL to 364.7 million TL, indicating a significant buildup of raw materials or finished goods (tomato paste/diced tomatoes).
• Financial Investments: Current financial investments rose to 232.3 million TL, while long-term investments were reclassified or reduced from 128.7 million TL.
• Cash and Equivalents: Increased from 20 million TL to 72.8 million TL.

2.3 Revenue and Profitability

For the period of July 1, 2025, to December 31, 2025:

• Revenue (Hasılat): 289,464,653 TL.
• Gross Profit: 74,611,102 TL.
• Operating Profit: 44,141,547 TL.
• Net Period Profit: 53,128,904 TL.
• Earnings Per Share: 0.46 TL.

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3. Independent Audit Findings

The interim financial statements were subjected to a “Limited Review” by Çözüm Ünlüer Bağımsız Denetim ve YMM A.Ş.

• Scope: The review was conducted in accordance with SBDS 2410 (Review of Interim Financial Information).
• Conclusion: The auditors stated that nothing came to their attention that would cause them to believe the interim financial information was not prepared, in all material respects, in accordance with TMS 34.
• Limitation: A limited review is substantially less in scope than an audit conducted in accordance with Independent Auditing Standards; therefore, no full audit opinion was expressed.

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4. Operational and Economic Context

4.1 Hyperinflationary Accounting (TMS 29)

Due to the high-inflation environment in Turkey, the Company applied TMS 29. Financial statements were adjusted using the Consumer Price Index (TÜFE).

• Indices used: December 31, 2025 index was 3513.87.
• Correction Coefficient: 1.00000 for the current period, while the June 2025 period used a coefficient of 1.12186 to bring figures to current purchasing power.

4.2 Risk Management

The Company identifies several key financial risks:

• Foreign Currency Risk: Significant exposure to USD and EUR. As of December 31, 2025, the Company had a net foreign currency liability position of 237.7 million TL (equivalent).
• Liquidity Risk: Managed by matching the maturities of financial assets and liabilities. Current liabilities (603.5M TL) are largely covered by current assets (1.13B TL), showing a healthy current ratio.

4.3 Key Provisions and Commitments

• Pledges and Mortgages: The Company has a first-degree mortgage of 1.04 billion TL on its Bursa-Mustafakemalpaşa factory in favor of Türkiye Vakıflar Bankası A.Ş.
• Legal: A provision of 5.1 million TL is set aside for ongoing short-term lawsuits.

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5. Significant Post-Balance Sheet Events

Following the report date, the Company applied to the Capital Markets Board (SPK) regarding changes to its articles of association to allow for the issuance of privileged shares. This application was concluded positively by the SPK on January 9, 2026.