Refining Resilience: 4 Surprising Truths from Tüpraş’s 2025 Financial Powerplay

1. Introduction: The Billion-Dollar Balancing Act

In the heavy-industrial theater of Turkey, few players command the stage like Türkiye Petrol Rafinerileri A.Ş. (Tüpraş). As the nation’s industrial backbone, Tüpraş’s balance sheet is more than just a corporate record; it is a thermal map of an economy navigating the scorching heat of a 211% three-year compound inflation rate. Maintaining operational stability when the currency itself is a moving target requires more than just industrial might—it requires financial wizardry.

The 2025 consolidated financial statements, signed off by lead auditor Seçkin Özdemir of Güney Bağımsız Denetim (an EY Global member firm), reveal a company that has spent the year performing a high-wire act. By reading between the lines of these TFRS-compliant reports, we uncover a story of a corporate giant that didn’t just survive Turkey’s high-inflation environment; it re-engineered its financial structure to find growth where others saw only erosion.

2. The Revenue Paradox: Why Shrinking Sales Led to Bigger Profits

On paper, the top-line figures suggest a retreat. Tüpraş reported a revenue (Hasılat) of 830.4 Billion TL for 2025, a significant step back from the 1,060.7 Billion TL reported in 2024. In any standard economy, a 230-billion-lira revenue slide would trigger alarms. Yet, in a stunning reversal of expectations, Net Profit (Net Dönem Karı) actually climbed from 24 Billion TL to 29.5 Billion TL.

The secret to this paradox lies in the mechanics of inflation accounting. The 2024 revenue figures were “uplifted” to match 2025’s purchasing power, making the previous year’s sales look artificially massive in comparison to today’s results. The real victory, however, was won in the “Net monetary position losses” (Net parasal pozisyon kayıpları) column. Tüpraş performed a masterful defensive crouch, slashing these losses from 19 Billion TL in 2024 to just 3.4 Billion TL in 2025. By aggressively managing its monetary exposure, the company protected its margins from currency erosion. The auditors validated this strategic pivot in their official opinion (Görüş):

“In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2025 and its consolidated financial performance… in accordance with TFRS.”

3. The 86 Billion Lira Ground Game

While investors usually focus on the oil flowing through the pipes, Tüpraş’s 2025 audit highlights that the most resilient asset might be the earth beneath those pipes. The company’s land and estates reached a staggering fair value of 86.3 Billion TL. Interestingly, despite 211% inflation—which usually sends asset prices skyrocketing—the company recorded a revaluation decrease (azalışı) of 2.8 Billion TL this year.

This decrease is a striking detail for any analyst. In an era of rampant price hikes, such a downward adjustment suggests a highly conservative appraisal and a rigorous auditing process. To determine these values, the company utilizes the “Market Comparison” (Emsal Karşılaştırma) method, a process the auditors flagged as a “Key Audit Matter” due to the heavy reliance on management’s subjective estimations.

Key factors influencing these massive land valuations include:

• Geographic Advantage: Strategic proximity to maritime shipping lanes and critical industrial zones.
• Operational Integrity: The specific physical condition and suitability of the land for heavy refining.
• Market Benchmarks: Rigorous comparisons with similar industrial plots, adjusted for the volatility of the Turkish real estate market.

4. The 11 Billion Lira Tax Shield

Tüpraş is currently carrying a deferred tax asset (Ertelenmiş Vergi Varlıkları) of 11.9 Billion TL, built primarily on government investment incentives. To the layperson, this looks like a pot of gold, but the “Auditor” persona sees it for what it truly is: a high-stakes bet on future success. Because this asset is tied to “important management estimates” (yönetim tahminleri), it only has value if Tüpraş remains profitable enough to use these tax breaks in the coming years.

These government incentives act as a vital bridge between national energy security goals and corporate profitability. By securing this tax shield, Tüpraş effectively locks in a competitive advantage that de-risks its multi-billion-lira modernization projects.

5. The Inflation Accounting “Time Machine” (TMS 29)

Comparing 2024 to 2025 in Turkey’s current climate is a fool’s errand without a “time machine.” As detailed in Note 2.1, Tüpraş applied “TMS 29 High Inflation Accounting” to normalize its results. This standard restates previous figures (yeniden düzeltilmiş) into the purchasing power of the Lira as of December 31, 2025.

Without this technical adjustment, the 211% three-year inflation rate would make any financial comparison meaningless, essentially comparing apples to oranges. The auditors emphasized the weight of this task, identifying the application of TMS 29 as a Key Audit Matter:

“Given the significant impact of TMS 29 on the Group’s reported results and financial position, high inflation accounting has been considered a key audit matter.”

6. Conclusion: A Future Built on Volatility?

Tüpraş’s 2025 performance is a case study in industrial hardiness. Despite the company paying out 34.8 Billion TL in dividends (Kar payları) and fighting a relentless inflationary villain, it ended the year with a massive “war chest” of 107.2 Billion TL in cash and cash equivalents (Nakit ve nakit benzerleri).

In an environment where holding cash usually leads to rapid loss of value, Tüpraş has managed to keep its liquidity robust while simultaneously increasing its net profit. As we close the book on 2025, the central question remains: Is this performance a masterclass in financial engineering, or a testament to the raw industrial resilience of an entity that has become too essential to fail? The data suggests it is both—a company that has learned not just to weather volatility, but to turn it into a source of strength.

Briefing: Tüpraş Consolidated Financial Analysis (FY 2025)

Executive Summary

This briefing document synthesizes the consolidated financial results and independent audit findings for Türkiye Petrol Rafinerileri A.Ş. (Tüpraş) for the fiscal year ending December 31, 2025. All figures are presented in thousands of Turkish Liras (TL) and adjusted for the purchasing power as of December 31, 2025, in accordance with TMS 29 (Financial Reporting in Hyperinflationary Economies).

The Group reported a net profit for the period of 30 billion TL, an increase from the 24.9 billion TL reported in 2024. This performance was achieved despite a decline in total revenue from 1.06 trillion TL in 2024 to 830 billion TL in 2025. The independent auditor, Güney Bağımsız Denetim ve SMMM A.Ş. (a member firm of Ernst & Young), issued an unmodified opinion, confirming that the financial statements present fairly the Group’s financial position and performance in accordance with Turkish Financial Reporting Standards (TFRS).

Critical areas of focus in this reporting cycle include the transition to and continued application of inflation accounting, the revaluation of significant land holdings, and the assessment of deferred tax assets derived from substantial investment incentives.

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1. Independent Audit Results and Key Audit Matters

The independent audit conducted by EY for the period ending December 31, 2025, emphasizes three specific areas as “Key Audit Matters” (KAMs) due to their quantitative significance and the level of management judgment involved.

1.1. Audit Opinion

• Status: Unmodified (“Clean”) Opinion.
• Compliance: The consolidated financial statements comply with TFRS in all material respects.
• Responsibility: Management is responsible for the preparation and fair presentation of the statements, while the auditor is responsible for providing reasonable assurance against material misstatement due to error or fraud.

1.2. Key Audit Matters (KAMs)

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2. Financial Performance Analysis

Despite a reduction in top-line revenue, Tüpraş demonstrated improved net profitability margins compared to the previous year.

2.1. Consolidated Income Statement Highlights Summary

(Values in ‘000 TL, adjusted for Dec 31, 2025, purchasing power)

2.2. Cost and Expense Drivers

• Sales Costs: Decreased from 971.7 billion TL to 749.1 billion TL, roughly proportional to revenue declines.
• Financial Impact: Net monetary position losses were significantly lower in 2025 (3.48 billion TL) compared to 2024 (19.09 billion TL), which heavily influenced the net profit increase.
• Operating Expenses: General administrative expenses remained stable at 22.37 billion TL, while marketing expenses saw a reduction from 13.05 billion TL to 10.91 billion TL.

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3. Financial Position and Liquidity

As of December 31, 2025, the Group maintains a robust asset base, although total equity saw a marginal decline.

3.1. Balance Sheet Summary

(Values in ‘000 TL)

3.2. Assets and Debt Profile

• Liquidity: Cash and cash equivalents increased to 107.24 billion TL from 96.25 billion TL.
• Inventory: There was a notable reduction in stock value, falling from 78.90 billion TL to 62.15 billion TL.
• Borrowings: Long-term borrowings increased significantly to 28.43 billion TL (up from 13.00 billion TL in 2024).
• Equity Structure: The Group holds 1.93 billion TL in paid-in capital, with 48.24 billion TL in capital adjustment differences from inflation.

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4. Organizational Scope and Group Structure

Tüpraş operates as a diversified energy group with a significant presence in refining, maritime transport, and energy production.

4.1. Shareholding Structure

• Enerji Yatırımları A.Ş.: 46.40%
• Publicly Traded (BIST): 46.77%
• Koç Holding A.Ş. and Members: 6.83% (Combined)

4.2. Operational Segments and Subsidiaries

The Group consolidates several subsidiaries and joint ventures to manage its supply chain:

• Maritime/Tankering: 21 distinct “Tankercilik” entities (e.g., Ditaş, Üsküdar, Kadıköy, Sarıyer) handle crude and product transport.
• Energy/Power: Entek Elektrik Üretimi A.Ş. (99.23% effective interest) and its subsidiaries focus on electricity and steam production.
• Railway Transport: Körfez Ulaştırma A.Ş.
• Joint Ventures: Opet Petrolcülük A.Ş. (41.67% effective interest), including retail, lubricants, and aviation fuel through THY Opet.
• New Acquisitions (2025): The Group expanded in Romania with Eco Sun Niculesti S.R.L. and Euromec-Ciocanari S.R.L. (30 January 2025).

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5. Significant Accounting Policies & Inflation Accounting

5.1. TMS 29 Implementation

The 2025 financial statements are the result of the continuous application of inflation accounting.

• Inflation Indices: The Group utilized the Consumer Price Index (TÜFE) provided by TÜİK.
• Base Comparison: 2024 figures were restated using a coefficient of 1.30892 to allow for direct comparison with 2025 values in current purchasing power.
• Three-Year Compound Inflation: Recorded at 211% as of the reporting date.

5.2. Land Revaluation Model

Effective from March 31, 2019, the Group adopted the revaluation model for land and plots within “Property, Plant, and Equipment.” Fair values are determined using the Precedent Comparison Method.

5.3. Investment Incentives

The Group continues to benefit from state-sponsored investment incentives, which form the basis for the multi-billion TL deferred tax assets. The recoverability of these assets depends on future taxable profits derived from management’s long-term business plans and budget forecasts.

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Rapporteur Note: This document is prepared based on the consolidated financial report approved by the Board of Directors on February 6, 2026. Final approval is subject to the General Assembly.