Eregli Demir ve Çelik Fabrikalari T : 2025 3 Months Interim Report

EREĞLİ DEMİR VE ÇELİK FABRİKALARI T.A.Ş.

For the Period 1 January - 31 March 2025 Condensed Board of Directors' Activity Report

A - GENERAL INFORMATION

1. Period of the Report

   1 January - 31 March 2025

2. Information About the Association
   • Title: EREĞLİ DEMİR VE ÇELİK FABRİKALARI T.A.Ş.
   • Trade Registry Number: 863637
   • Address: Barbaros Mah. Ardıç Sok. No: 6 Ataşehir/İSTANBUL

   • Website: https://www.erdemir.com.tr

3. Shareholding and Capital Structure

   Authorized Capital : TRY 7.000.000 thousand Paid-in Capital : TRY 7.000.000 thousand

   Shareholders	Shares (Thousand TRY)	%
   ATAER Holding A.Ş.	3.449.965	49,29
   Publicly Held	3.271.911	46,74
   Erdemir's Own Shares	278.124	3,97
   Total	7.000.000	100,00

4. Board of Directors, Executive Management and Number of Personnel

   According to the Turkish Commercial Code and related regulations, the election of the Member of Board of Directors is executed by the General Assembly within the framework of the Articles of Association. Should there be a vacant position in the Board of Directors Membership within the respective period; an election is held for the vacant positions according to the provisions of Turkish Commercial Code and Company's Articles of Association and submitted to the next general assembly to be approved. The Company's 2024 Ordinary General Assembly has been executed on March 26, 2025.

   Within the framework of the provisions of the Turkish Commercial Code and the Capital Market Law, pursuant to Articles 10th and 11th of the Company's Articles of Association, at the Ordinary General Assembly Meeting held on March 26, 2025, elections were held for Independent Board Members due to the expiration of their terms of office and 3 Independent Board Members were elected to serve for 1 year.

   The active members of the Board of Directors as of reporting period:

   Board of Directors	Title	Effective from
   OYTAŞ İç ve Dış Ticaret A.Ş. (Represented by: Süleyman Savaş ERDEM)	Chairman	27.05.2013 (*)
   OMSAN Lojistik A.Ş. (Represented by: Gürtan DAMAR)	Deputy Chairman and Executive Director	11.09.2012 (*)
   OYAK Pazarlama Hizmet ve Turizm A.Ş. (Represented by: Mustafa Serdar BAŞOĞLU)	Board Member and Executive Director	13.09.2012 (*)
   Republic of Türkiye Ministry of Treasury and Finance Privatization Administration (Represented by: Bekir Emre HAYKIR)	Board Member	20.09.2012 (*)
   OYKA Kağıt Ambalaj Sanayii ve Ticaret A.Ş. (Represented by: Baran ÇELİK)	Board Member	12.09.2012 (*)
   OYAK Denizcilik ve Liman İşletmeleri A.Ş. (Represented by: Güliz KAYA)	Board Member	12.09.2012 (*)
   Emre GÖLTEPE	Independent Board Member	17.03.2022
   Kadri ÖZGÜNEŞ	Independent Board Member	31.03.2023
   Sezai Afif ENSARİ	Independent Board Member	28.03.2024

   (*) Legal entity's duty starting dates were considered.

   Changes in the Executive Board within the Period

   • At the Ordinary General Assembly Meeting held on March 26, 2025, Emre GÖLTEPE, Kadri ÖZGÜNEŞ and Sezai Afif ENSARİ have been elected as independent board members for serving 1 year period.

   Powers and Duties of the Members of the Board of Directors'

   The Chairman and the members of the Board of Directors possess duties and authorities set out in the Turkish Commercial Code's relevant clauses and in the Articles of Association.

   Executive Management

   Executive Management	Title	Effective from	Education	Experience
   Gürtan DAMAR	Deputy Chairman and Executive Director	03.06.2024	Yıldız Technical University - Mechanical Engineering	30 Years
   Mustafa Serdar BAŞOĞLU	Board Member and Executive Director	03.06.2024	Bülent Ecevit University - Business Administration (Master's Degree) Karadeniz Technical University - Finance (Bachelor's Degree)	21 Years
   Mustafa Serdar BAŞOĞLU	Financial Management and Financial Affairs Group Vice President	24.09.2020	Bülent Ecevit University - Business Administration (Master's Degree) Karadeniz Technical University - Finance (Bachelor's Degree)	21 Years
   Sercan BÜYÜKBAYRAM	Marketing and Sales Group Vice President	19.06.2023	Middle East Technical University - Sociology (Master's Degree) Middle East Technical University- Political Science and Public Administration (Bachelor's Degree)	25 Years
   Şevket Selim YILMAZ	Procurement Group Vice President	22.02.2024	Atatürk University -Business Administration	21 Years
   Ercan KAYA	Enterprise Architecture and Human Resources Group Vice President	21.07.2020	Selçuk University - Economics (Doctor's Degree) Hacettepe University -Economics (Master's Degree)	37 Years
   Niyazi Aşkın PEKER	General Manager	12.09.2022	Yıldız Technical University - Metallurgy Engineering	31 Years
   Sinan BOZKURT	Deputy General Manager Operations	27.09.2021	Middle East Technical University - Metallurgy and Materials Engineering	28 Years

5. The Transactions of Board Members Made on Its Behalf or on Behalf of Other and the Activities as Part of Prohibition of Competition

   At the Ordinary General Assembly held on 26 March 2025, it is consented to give the authority for transactions for the year 2025 according to article 395 and 396 of Turkish Commercial Code to the Members of the Board.

   No transaction had been realized in this context.

6. Personnel and Worker Movements and Collective Bargaining Practices and Rights and Benefits Provided to Personnel and Workers

   30th Period Collective Labor Agreement, which will be valid between September 1, 2024 and August 31, 2026, has been signed on February 12, 2025 between Turkish Employers' Association of Metal Industries (MESS) on behalf of our company and Turkish Metal Union as the collective bargaining agency.

   28th Period Collective Labor Agreement, which will be valid between January 1, 2023 and December 31, 2024 has been signed on June 6, 2023 between Özçelik-İş Union and İskenderun Demir ve Çelik A.Ş. Negotiations for the 29th Period Collective Labor Agreement are in progress. The negotiations for the 29th Period Collective Labor Agreement started on January 29, 2025.

   Vacations are paid annual leaves, accompaniment leaves for medical purposes, accompaniment leaves excused absences, unpaid leaves, and other paid leaves consisting marital leaves, bereavement leaves, pregnancy leaves, maternity leaves, nursing leaves, adoption leaves, part-time work leaves, transport leaves, be with your child leaves and leaves in case of a natural catastrophe.

   Complementary health insurance for our hourly paid staff; individual annuity insurance, private health insurance and life insurance are provided to our monthly paid personnel.

   Bereavement allowance, transportation and meal allowance, derived from the social benefits, are given to all employees; the rest is given only to blue-collar workers. Paid annual leaves, leaves of absence with excuse, marital leaves, bereavement leaves, maternity leaves, and pregnancy leave, accompaniment leaves, adoption leaves, part-time work leaves, transport leaves, unpaid leaves and nursing leaves can be taken by all employees; the rest is taken only by blue-collar workers.

   The number of the personnel employed by the Group as of reporting date:

   	31 March 2025	31 December 2024
   	Personnel	Personnel
   Hourly paid	8.563	8.407
   Monthly paid	3.963	3.959
   	12.526	12.366

7. Compliance with the Corporate Governance Principles

   The "Corporate Governance Principles" published by the Capital Markets Board (CMB) which were declared in our Annual Activity Report for the year ending 2024 were met during the period 1 January 2025 - 31 March 2025.

8. Amendments in the Articles of Association

None.

B - Financial Rights Given to Board Members and Executive Management

1. Total Amount of Financial Rights Like Attendance Fee, Wages, Bonus, Premium and Dividend Payments

   The relevant section of the minutes of the General Assembly dated March 26, 2025 is as follows:

   In the 9th article of the agenda related to the Rate Setting of the Board Members', the proposal was read by the representative of ATAER Holding A.Ş. Feyza DEMETGÜL AKKOYUNLU, it was submitted to the General Assembly's approval and in accordance with the proposal;

   It was decided by the majority of votes that; no wages will be paid to the Board members representing Group B shares, the monthly net wage that will be paid to the members representing Group A shares will be net TRY 40.000 (monthly, in cash), the wages of independent Board members will be net TRY 55.000 (monthly, in cash) and the new wages valid from the date of April 1, 2025.

   Wages of the Executive Management is determined by the Board. Performance based additional payment is given to paid monthly personnel including Executive Management.

   No payables were given, no loans were issued directly or through a third party and no indemnity was given (like sureties) to Board Members or Executive Management during the period.

   No payment of performance was made to Board Members.

2. Allowances Given, Travel, Housing and Representation Expenses and Real and Cash Advances, Insurance and Other Pledges

A total of TRY 28.661 thousand is recorded as expense related to Company Board Members and Executive Management for the period 1 January - 31 March 2025.

C - Research and Development Activities

The research and development activities of OYAK Mining Metallurgy are conducted by the Erdemir R&D Center, certified by the Republic of Turkey Ministry of Industry and Technology in 2014. These activities focus on five main areas: raw materials and iron making, steel making and casting technologies, hot and cold rolled products and processes, and energy and environmental solutions.

Erdemir R&D Center boasts state-of-the-art laboratory facilities for material characterization, thermomechanical simulation, metal forming, welding, corrosion, enameling, fatigue, and rheology studies. Additionally, pilot-scale simulators are utilized for processes such as agglomeration, sintering, coke production, melting, rolling, heat treatment and coating.

The number of flat products has reached 604 with the addition of 2 new flat steel grades that was developed in the first quarter of 2025. As in the scope of R&D activities, 6 projects have been completed and 28 projects have been going further during that period.

D - Activities and Important Developments Regarding the Activities

1. Investment Activities

   Operating within the modern plants and by modern production technology, OYAK Mining Metallurgy produces competitive products globally and continues its investments aligned for continuous development strategy. In this scope:

   In Erdemir Plants:

   Test studies for the first coke pushing continue in the 4th Coke Oven Battery Project. The cranes have been put into operation and the roof covering works are continuing in the Steelshop Charging Hall New Charging Cranes Investment Project. Site works are ongoing in the Various Fire Detection and Extinguishing Systems Project, the Project of Slitting Line Transfer to ERSEM and the modernization of stoves within the scope of the 2nd Blast Furnace Renovation Investment. The second phase studies continue in the Surface Inspection Systems Project. Equipment manufacturing and shipment studies continue in the 1. Galvanizing Line Level-1 Automation System Modernization Project. Engineering studies are ongoing in the Erdemir Domestic Waste Water Treatment Plant Modernization, the No.5 Coke Oven Battery and the 2. Hot Strip Mill Investment Projects. The commissioning works for the "Tundish Refractory Spraying Robot" within the scope of Erdemir Robotic Applications and Automation Projects are ongoing. Purchasing works are ongoing for other sub-projects within the scope. Engineering studies continue in the Biomass Gasification Facility Project.

   Procurement activities continue for the Continous Annealing Line (CAL) Drives System and Level 2 Automation Modernization Project.

   In İsdemir Plants:

   The 1. New Blast Furnace Project has been commissioned and test production has started. Site activities continue in The Boiler No.3 Retubing and Burner Modification and the 1. Blast Furnace Top Recovery Turbine (TRT) Projects. Engineering, equipment procurement works and site activities continue for the Port-1 New Grab Ship Unloader Cranes Project. Construction and mechanical works continue within the scope of the Second Phase of the Seawater Pumping Station Sustainability Investment. Equipment supply and site activities are ongoing in The Port Capacity Increase Investment and the Repair, Renovation and Strengthening Projects of Port Facility Damaged by the Earthquake. Engineering studies continue in the scope of İsdemir Robotic Applications and Automation Projects. Site activities continue within the scope of the South Harbor Sea Reclamation Project.

   Procurement activities continue for the New 1. and 2. Turbo Generator and the Electricity Generation from The Steam Produced in Coke Dry Quenching Projects.

   As of 31 March 2025, the Group's total investment expenditures amount to USD 311 million (31 March 2024: USD 167 million).

2. Internal Control System and Internal Auditing Activities

   Group Internal Audit Directorate conducts audit activities in order to evaluate and improve the effectiveness of risk management, control and governance processes of Group companies and reports directly to the Deputy Chairman and Executive Director. In accordance with the relevant regulation of the Capital Markets Board, the effectiveness of internal control system is evaluated by the Board of Directors at least once in a year. In this context, the Internal Audit Department regularly provides information to Audit Committee, consisting of Independent Members, in line with their requests regarding internal audit activities.

   Besides periodic audit activities, continuous audits are performed with the Integrated Audit System. Critical controls, master data and transaction data in the SAP system are continuously evaluated by the automatic controls and business rules installed in the system.

3. Direct and Indirect Subsidiaries

The Information about Affiliates Subject to Consolidation

The main scope of business and the participation in their shareholding of the affiliates subject to consolidation are as follows:

Name of the Company	Country of Operation	Operation	2025 Effective Share %	2024 Effective Share %
İskenderun Demir ve Çelik A.Ş.	Türkiye	Integrated Iron and Steel Manufacturing	94,87	94,87
Erdemir Madencilik San. ve Tic. A.Ş.	Türkiye	Iron Ore and Pellet	90	90
Erdemir Çelik Servis Merkezi San. ve Tic. A.Ş.	Türkiye	Steel Service Center	100	100
Erdemir Mühendislik Yön. ve Dan. Hiz. A.Ş.	Türkiye	Management and Consultancy	100	100
Erdemir Romania S.R.L.	Romania	Electrical Steel Production	100	100
Erdemir Asia Pacific Private Limited	Singapore	Trading	100	100
Erdemir Enerji Üretim A.Ş.	Türkiye	Renewable Energy Production	100	100
İsdemir Linde Gaz Ortaklığı A.Ş.	Türkiye	Industrial Gas Production and Sales	47	47
Kümaş Manyezit Sanayi A.Ş.	Türkiye	Magnesite Ore, Refractor	100	100
Yenilikçi Yapı Malz ve Üretim San. Tic. A.Ş.	Türkiye	Recycling, Special Purpose Entity	100	100

E - Financial Position

1. Consolidated Summary of Financial Statements

   Financial statements are prepared in accordance with the CMB's Communiqué Serial:II,

   14.1 and have been unaudited as of March 31, 2025.

   Summary of Consolidated Financial Position

   	(Unaudited)	(Audited)
   	Current Period	Previous Period
   (Thousand TRY)	31 March 2025	31 December 2024
   Current Assets	190.897.349	182.856.284
   Non-current Assets	263.943.473	242.302.690
   Total Assets	454.840.822	425.158.974
   Current Liabilities	72.842.222	76.288.847
   Non-current Liabilities	121.437.648	104.445.716
   Shareholders' Equity	260.560.952	244.424.411
   Total Liabilities	454.840.822	425.158.974

   Summary of Consolidated Profit or Loss

   	(Unaudited)	(Unaudited)
   	Current Period	Previous Period
   	1 January -	1 January -
   (Thousand TRY)	31 March 2025	31 March 2024
   Sales Revenue	53.544.627	49.747.633
   Gross Profit	3.801.258	7.029.293
   Operating Profit	1.897.402	8.810.833
   Operating Profit Before Finance Income (Expenses)	2.439.269	8.933.440
   Profit Before Tax	421.713	6.362.668
   Profit (Loss) for the Period	447.904	5.846.938
   Shareholder's share in the Profit (Loss) for the Period	426.389	5.600.923
   EBITDA	3.579.438	7.419.758
   Earnings (Loss) Per Share	6,09%	83,32%

   The Entity prepares its budgets within the frame of its strategic goals that is approved by the Board of Directors. In the regular meetings of the Board of Directors is reviewing the current position of the Entity and activities are compared with the previous period and budget targets.

2. Key Ratios

   	1 January -	1 January -
   (%)	31 March 2025	31 March 2024
   Gross Profit Margin	7,1%	14,1%
   Operating Profit Before Finance Income (Expenses) Margin	4,6%	18,0%
   EBITDA Margin	6,7%	14,9%
   Profit (Loss) Margin	0,8%	11,8%
   Shareholder's Share in the Profit (Loss) Margin	0,8%	11,3%

3. The Availability of Financial Sources and the Policies the Group Applies in This Framework

   Group has full access to all national and international financial sources with its market making power based on high trading volume in money markets. New funding alternatives according to changing market conditions are continuously analyzed and offers are evaluated. The debt policy of Group is developed based on the capability of cash generation and the strong equity structure. Hedging methods and amounts used against financial risks are developed based on a frame of systematic models. Within the risk tolerances, forward, futures, swap and options reflecting market conditions are implemented, if necessary.

4. Dividend Distribution Policy

   Group's Dividend Distribution Policy is as follows:

   As a principle, Company implements the policy of distributing all of its distributable profit in cash within the provision of forecasted free cash flow generation by considering financial leverage ratios, investment/financing needs and anticipation of the market under the scope of effective regulations and clauses of Company's Articles of Association. The dividend distribution policy is reviewed annually by the Board of Directors every year considering to national and global economic conditions, the projects on the company's agenda and the state of its funds.

   Dividend is paid by fixed or variable installments in accordance with the legislation by giving authority to the Board of Directors at the General Assembly Meeting, where dividend distribution is decided, until 15 December of the relevant calendar year.

   General Assembly is authorized for the "distribution of dividend advance" in accordance with relevant legislations.

   At Annual General Assembly dated 26 March 2025, dividend distribution gross dividend per share: TRY 0,25 amounting to TRY 1.750.000 thousand from 2024 net profit was approved by majority of votes. As of 26 March 2025, which is the dividend distribution decision date of the Company, dividend pertaining to the shares owned by the Company due to the ownership of 3,97% of its own shares with a nominal value of 1 TRY, is shown by netting off the amount of dividends to be distributed. The Group approved TRY

   37.169 thousand dividend to non-controlling shares on Isdemir, which is subsidiary of the Group.

5. Information About the Sector

   Global crude steel production in March this year increased by 2,9 percent year on year to 166,1 million tonnes. In the January-March period this year, global crude steel production went down by 0,4 percent year on year to 468,6 million tonnes.

   In March, crude steel output in Asia amounted to 123,6 million tonnes, up 3,9 percent, with China's output at 92,8 million tonnes, up 4,6 percent, with 7,2 million tonnes produced by Japan, increasing by 0,2 percent, 13,8 million tonnes produced by India, up by 7,0 percent, and 5 million tonnes produced by South Korea, moving down by 5,3 percent- with all comparisons on year-on-year basis.

   EU-27 countries produced 11,7 million tonnes of crude steel in March, up by 0,2 percent year on year. In the given period, Germany's output amounted to 3,1 million tonnes, down 11,7 percent year on year.

   The CIS registered a crude steel output of 7,1 million tonnes, decreasing by 3,5 percent on year-on-year basis, with Russia's estimated output at 6,2 million tonnes, down 3,2 percent year on year.

   In North America, in March, crude steel output totaled 9,2 million tonnes, up by 1,4 percent year on year, with the US producing 6,7 million tonnes, decreasing by 1,5 percent, both year on year. Crude steel output in South America in March amounted to 3,7 million tonnes, up by 6,5 percent compared to the same month in the previous year, with Brazil's output totaling 2,9 million tonnes, increasing by 6,6 percent year on year.

   In the given month, Africa produced 1,9 million tonnes of crude steel, increasing by 0,6 percent year on year. In the Middle East, crude steel output totaled 5,3 million tonnes, moving up by 1,9 percent.

   Price changes of hot rolled products follows:

   
   
   

   Türkiye produced 3,1 million tonnes of crude steel in March, with a 2,8 percent decrease compared to the same month in the previous year. Türkiye's crude steel output by electric arc furnaces 2,2 million tonnes and the production by integrated plants 905 thousand tonnes in March.

   In the January-March period this year, Türkiye produced 9,3 million tonnes of crude steel on year. Türkiye's crude steel output by electric arc furnaces 6,8 million tonnes and the production by integrated plants 2,5 million tonnes in March.

6. The Position within the Sector

   The Group produced 8,5 million tonnes of crude steel in 2024. In the first three months of 2025, the Group produced a total of 1,9 million tonnes of crude steel, with 0,5 million tonnes at the Ereğli Plant and 1,4 million tonnes at the İskenderun Plant.

7. Operational Developments

   Türkiye's first and only integrated flat steel producer, Group, who carries out production, operation, maintenance and modernization activities within its all facilities. Manufacturing 20% of all crude steel production in Türkiye, Group again continued its operations in line with the principle of optimal costs, maximum productivity and quality of production in the first three months of 2025.

8. Production Plants and Productivity

   The information about the capacities of main product groups by Group are stated below:

   Capacity used (%)	1 January - 31 March 2025	1 January - 31 March 2024
   Liquid Steel	80%	96%
   Crude Steel	79%	95%

9. Products

   The main products of the Group are as follows:

   Erdemir	İsdemir	Ermaden	Kümaş Manyezit
   Tinplate	Billet	Pellets	Refractor
   Galvanized	Wire Rod	Iron Ore	Magnesite Ore
   Cold Rolled	Slab
   Hot Rolled	Hot Rolled
   Plate

10. Production (quantity)

    Final Products (000 Tonnes)	1 January - 31 March 2025	1 January - 31 March 2024
    Flat Products	1.697	1.838
    Long Products	200	268
    Iron Ore and Magnesite	596	587

11. Developments Regarding Sales

    The iron and steel industry are a delivering force in national economies and Türkiye is one of the leading countries in terms of both production and consumption of steel, ranking as the world's seven largest steel producer. Turkish crude steel production of Türkiye in the first three months of 2025 is 9,3 million tonnes, which is lower 3,4% than the previous year.

    Total flat product sales of the Group reached to the level of 1,7 million tonnes in the first three months of 2025. The domestic flat product sales reached 1,3 million tonnes. Total long product sales were 176 thousand tonnes and 161 thousand tonnes of long product sales were made domestically. The Group's total sales were 22% through exports.

    Group has added 34 new customers to flat product portfolio and 6 new customers to long product portfolio in the first three months of 2025.

12. Sales (quantity)

Final Products (000 Tonnes)	1 January - 31 March 2025	1 January - 31 March 2024
Flat Products	1.726	1.723
Long Products	176	256
Pellet,Iron and Magnesite Ore Products(*)	567	561

(*) As of 31 March 2025, 518 thousand tonnes of pellet and ore sales are made for Group Companies (31 March 2024: 523 thousand tonnes).

F - Risks and Evaluation of the Board

1. Enterprise Risk Management

   Enterprise Risk Management Procedure has been published with the purpose of ensuring systematic and comprehensive identification, evaluation, control and monitoring of risks and opportunities that may affect Company's assets, reputation, and profitability. The procedure includes guidance on support and positioning, risk identification, prioritization, improvement, reporting, monitoring/surveillance, and communication principles related to risks in order to manage company-wide risks to the highest standard.

   In order to measure the risks incurred by the company and ensure conformity to the risk tolerance limits; risks are monitored and managed in accordance with regulations and guidelines developed for critical risks.

2. Committee of Early Risk Detection

The Early Detection of Risk Committee Regulation is included in the Corporate Governance Policies and Regulations tab under Corporate Governance section of Investor Relations title on the company's website.

The purpose of the Committee is to identify the risks that may threaten the existence, progress and continuation of the Company operations within the scope of the Early Detection of Risk Committee Regulation and legal legislation to implement the necessary measures related to the risks identified and to manage those risks.

The meetings of the Committee are held bimonthly and in accordance with the regular meetings of the Board of Directors. After each meeting, a written report on the activities of the Committee is submitted to the Board of Directors with a summary of the minutes. Meeting minutes are kept by the secretariat.

G - Other Information

1. Organizations Out of the Headquarters

   The Company has a branch in Kdz. Ereğli.

2. Information for Shareholders

None.