Türk Hava Yollari Anonim Ortakligi : 2023 9 Aylık Finansal Rapor - USD

TÜRK HAVA YOLLARI ANONİM

ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim

Financial Statements As at and For

The Nine-Month Period

Ended 30 September 2023

TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim Balance Sheet as at 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

			Not Reviewed		Audited
ASSETS	Notes	30 September 2023		31 December 2022
Non-Current Assets
Financial Investments	6		368	165
Other Receivables
-Third Parties	9		1,072	957
Investments Accounted for Using Equity Method	3		349	277
Investment Property			69	69
Property and Equipment	11		5,809	4,654
Right of Use Assets	11		16,411	16,577
Intangible Assets
- Other Intangible Assets	12		83	77
- Goodwill			27	27
Prepaid Expenses			1,232	914
Deferred Tax Asset	25		7	2
TOTAL NON-CURRENT ASSETS			25,427	23,719
Current Assets
Cash and Cash Equivalents	5		910	4,075
Financial Investments	6		5,586	626
Trade Receivables
-Related Parties	8		57	31
-Third Parties			810	964
Other Receivables
-Related Parties	8		19	13
-Third Parties	9		899	864
Derivative Financial Instruments	27		199	44
Inventories			359	331
Prepaid Expenses			312	176
Current Income Tax Assets	25		48	35
Other Current Assets			86		66
TOTAL CURRENT ASSETS			9,285	7,225
TOTAL ASSETS
		34,712	30,944

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim Balance Sheet as at 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

				Not Reviewed		Audited
LIABILITIES AND EQUITY		Notes	30 September 2023		31 December 2022
Equity
Share Capital	18		1,597	1,597
Treasury Shares				(33)	-
Items That Will Not Be Reclassified to
Profit or Loss
-Actuarial Losses on Retirement Pay Obligation	18		(238)	(228)
Items That Are or May Be Reclassified to
Profit or Loss
-Foreign Currency Translation Differences	18		(324)	(294)
-Fair Value Gains on Hedging Instruments	18
Entered into for Cash Flow Hedges		630	515
-Losses on Remeasuring FVOCI				(9)	(14)
Restricted Profit Reserves	18		69	36
Previous Years Profit	18		8,097	5,405
Net Profit for the Period				2,788		2,725
Equity of the Parent				12,577	9,742
Non-Controlling Interests				5	-
TOTAL EQUITY				12,582	9,742
Non- Current Liabilities
Long-Term Borrowings	7		589	1,115
Long-Term Lease Liabilities	7 and 13	9,242	9,177
Other Payables
-Third Parties				126	24
Deferred Income	10		104	108
Long-Term Provisions
-Provisions for Employee Termination Benefits	16		230	273
-Other Provisions				77	61
Deferred Tax Liability	25		2,884		2,220
TOTAL NON-CURRENT LIABILITIES				13,252	12,978
Current Liabilities
Short Term Borrowings	7		1,488	1,058
Short-Term Portion of Long-Term Borrowings	7		705	1,100
Short-Term Portion of Lease Liabilities	7 and 13	1,619	1,589
Trade Payables
-Related Parties	8		256	270
-Third Parties				1,067	930
Payables Related to Employee Benefits				233	183
Other Payables
-Related Parties	8		2	13
-Third Parties				168	112
Derivative Financial Instruments	27		23	211
Deferred Income	10		2,802	2,394
Current Tax Provision	25		16	3
Short-Term Provisions
-Provisions for Employee Benefits	14		55	39
-Other Provisions	14		6	6
Other Current Liabilities				438		316
TOTAL CURRENT LIABILITIES				8,878	8,224
TOTAL LIABILITIES AND EQUITY				34,712	30,944

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income

For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

			Not Reviewed		Not Reviewed		Not Reviewed		Not Reviewed
			1 January -		1 July -		1 January -		1 July -
PROFIT OR LOSS	Notes		30 September 2023		30 September 2023		30 September 2022		30 September 2022
Revenue	19		15,823	6,321	13,654	6,068
Cost of Sales (-)	20		(11,752)		(4,185)		(10,335)		(4,198)
GROSS PROFIT			4,071		2,136		3,319		1,870
General Administrative Expenses (-)	21		(330)	(103)	(220)	(86)
Selling and Marketing Expenses (-)	21		(1,316)	(450)	(998)	(347)
Other Operating Income	22		362	166	92	20
Other Operating Expenses (-)	22		(143)	(13)	(92)	(49)
OPERATING PROFIT BEFORE
INVESTMENT ACTIVITIES			2,644		1,736		2,101		1,408
Income from Investment Activities	23		774	326	190	84
Expenses for Investment Activities	23		(58)	(43)	(23)	-
Share of Investments' Profit Accounted
for Using The Equity Method	3		146		116		104		94
OPERATING PROFIT			3,506		2,135		2,372		1,586
Financial Income	24		496	179	401	246
Financial Expenses (-)	24		(561)		(9)		(299)		(106)
PROFIT BEFORE TAX			3,441		2,305		2,474		1,726
Tax Expense			(653)	(385)	(222)	(211)
Current Tax Expense	25		(28)	(22)	(32)	(9)
Deferred Tax Expense	25		(625)		(363)		(190)		(202)
NET PROFIT FOR THE PERIOD			2,788	1,920	2,252	1,515

The accompanying notes are an integral part of these condensed consolidated interim financial statements

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income

For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

			Not Reviewed		Not Reviewed		Not Reviewed		Not Reviewed
			1 January -		1 July -		1 January -		1 July -
OTHER COMPREHENSIVE INCOME	Notes	30 September 2023		30 September 2023		30 September 2022		30 September 2022
Items That May Be Reclassified Subsequently To
Profit or Loss			90	210	765	189
Currency Translation Adjustment			(30)	(7)	(30)	(4)
Gains / (Losses) on Investments Remeasured FVOCI			6	5	(24)	(1)
Fair Value Gains on Hedging Instruments
Entered into for Cash Flow Hedges			132	242	1,008	251
Fair Value Gains Hedging Instruments of
Investment Accounted by Using the Equity Method
Entered into for Cash Flow Hedges			12	25	10	(14)
Related Tax of Other Comprehensive Income			(30)	(55)	(199)	(43)
Items That Will Not Be Reclassified Subsequently
To Profit or Loss			(10)	1	(12)	(1)
Actuarial Losses on Retirement Pay
Obligation			(12)	2	(15)	(1)
Related Tax of Other Comprehensive Income			2	(1)	3	-
OTHER COMPREHENSIVE INCOME
FOR THE PERIOD			80	211	753	188
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD			2,868	2,131	3,005	1,703
Basic Earnings Per Share (Full US Cents)	26		2.02	1.39	1.63	1.10
Diluted Earnings Per Share (Full US Cents)	26		2.02	1.39	1.63	1.10

The accompanying notes are an integral part of these condensed consolidated interim financial statements

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Condensed Consolidated Interim Statement of Changes in Equity

For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)
			Items That Will Not
			Be Reclassified
			Subsequently To	Items That May Be Reclassified Subsequently
			Profit or Loss		To Profit or Loss			Retained Earnings
					Fair Value Gains
					on Hedging
				Foreign	Instruments							Equity
			Actuarial Losses	Currency	Entered Into For		Losses on	Restricted	Previous	Net Profit		Holders	Non-
	Share	Treasury	Retirement Pay	Translation	Cash Flow		Remeasuring	Profit	Years	for The		of the	controlling	Total
	Capital	Shares	Obligation	Differences	Hedges		FVOCI	Reserves	Profit	Period		Parent	Interests	Equity
As of 1 January 2023	1,597	-	(228)	(294)	515		(14)	36	5,405	2,725	9,742	-	9,742
Transfers	-	-	-	-	-		-	33	2,692	(2,725)	-	-	-
Total comprehensive income	-	-	(10)	(30)	115		5	-	-	2,788	2,868	-	2,868
Increase through treasury share
transactions	-	(33)	-	-	-		-	-	-	-	(33)	-	(33)
Transactions with non-
controlling interests	-	-	-	-	-		-	-	-	-	-	5	5
As of 30 September 2023	1,597	(33)	(238)	(324)	630		(9)	69	8,097	2,788	12,577	5	12,582
			Items That Will Not
			Be Reclassified
			Subsequently To	Items That May Be Reclassified Subsequently
			Profit or Loss		To Profit or Loss			Retained Earnings
					Fair Value
					Losses on
					Hedging
				Foreign	Instruments							Equity
			Actuarial Losses	Currency	Entered Into For		Losses on	Restricted	Previous	Net Profit		Holders	Non-
	Share	Treasury	Retirement Pay	Translation	Cash Flow		Remeasuring	Profit	Years	for The		of the	controlling	Total
	Capital	Shares	Obligation	Differences	Hedges		FVOCI	Reserves	Profit	Period		Parent	Interests	Equity
As of 1 January 2022	1,597		(71)	(275)	151		(7)	76	4,406	959	6,836	1	6,837
Transfers	-	-	-	-	-		-	12	947	(959)	-	-	-
Total comprehensive income	-	-	(12)	(30)	814		(19)	-	-	2,252	3,005	-	3,005
As of 30 September 2022	1,597	-	(83)	(305)	965		(26)	88	5,353	2,252	9,841	1	9,842

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES Condensed Consolidated Interim Statement of Cash Flows

For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

	Notes
Net Profit for the period
Adjustments to Reconcile Profit
Adjustments for Depreciation and Amortisation Expense	11 and 12
Adjustments for Provisions Related to Employee Benefits	14 and 16
Adjustments for Provisions for Other Accruals	14
Adjustments for Reversal of Probable Risks
Adjustments for Interest Income	23 and 24
Adjustments for Interest Expense	16 and 24
Adjustments For Unrealised Foreign Exchange Gains
Adjustments for Fair Value Gains on Derivative
Financial Instruments	24
Adjustments for Undistributed Gains of Associates	3
Adjustments for Tax Expense	25
Adjustments for Losses Arised From Sale of Tangible Assets	23
Adjustments for Losses Arised from Sale of Other Non-Current Assets	11
Operating Profit Before Changes in Working Capital
Increase in Trade Receivables from Related Parties	8
Decrease / (Increase) in Trade Receivables from Third Parties
Increase in Other Receivables from Related Parties	8
Increase in Other Receivables from Third Parties	9
Adjustments for Increase in Inventories
Adjustments for Increase in Prepaid Expenses
(Decrease) / Increase in Trade Payables to Related Parties	8
Increase in Trade Payables to Third Parties
Adjustments for Increase in Payables Due to
Employee Benefits
Decrease in Other Payables to Related Parties	8
Increase in Other Payables to Third Parties
Increase in Deferred Income	10
(Increase) / Decrease in Other Assets
Cash Flows From Operations
Payments for Provisions Related with Employee Benefits	16
Income Taxes Received	25
Net Cash From Operating Activities
CASH FLOWS FROM / (USED IN) INVESTING ACTIVITIES

Proceeds From Sales of Property, Plant and Equipment and Intangible Assets

Payments For Purchasing of Property, Plant and Equipment and
Intangible Assets	11 and 12
Payments For Purchasing of Other Short and Long-term Assets	6
Other Cash Advances and Loans	9
Dividends Received
Interest Received	23
Net Cash Flows Used In Investing Activities
CASH FLOWS FROM / (USED IN) FINANCING ACTIVITIES
Payments to Acquire Entity's Shares
Proceeds From Loans	7
Repayments of Loans	7
Payments of Lease Liabilities	7
Interest Paid
Interest Received	24
Other Cash Outflows
Net Cash Used in Financing Activities
Net Change in Cash and Cash Equivalents
CASH AND CASH EQUIVALENTS
AT THE BEGINNING OF THE PERIOD
CASH AND CASH EQUIVALENTS
AT THE END OF THE PERIOD	5

Not Reviewed		Not Reviewed
1 January -		1 January -
30 September 2023		30 September 2022
2,788	2,252
1,458	1,373
72	67
2	1
-	(3)
(655)	(152)
405	240
(276)	(544)
(356)	(120)
(146)	(104)
638	185
25	17
55		31
4,010	3,243
(26)	(3)
151	(222)
(6)	(18)
(75)	(43)
(28)	(41)
(454)	(219)
(14)	86
137	258
50	89
(11)	(5)
158	276
529	1,116
(20)		20
4,401	4,537
(11)	(4)
13		12
4,403		4,545
62	29
(846)	(653)
(5,163)	(926)
(208)	(96)
38	6
517		73
(5,600)		(1,567)
(33)	-
1,897	1,060
(2,387)	(1,751)
(1,303)	(1,244)
(280)	(190)
138	79
-		(4)
(1,968)		(2,050)
(3,165)		928
4,075	2,677
910	3,605

The accompanying notes are an integral part of these consolidated financial statements.

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Notes to the Condensed Consolidated Interim Financial Statements

As At And For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

1. GROUP ORGANIZATION AND ITS OPERATIONS

Türk Hava Yolları Anonim Ortaklığı (the "Company" or "THY") was incorporated in Türkiye in 1933. As of 30 September 2023, and 31 December 2022, the shareholders and their respective shareholdings in the Company are as follows:

	30 September 2023		31 December 2022
Türkiye Wealth Fund	49.12 %	49.12 %
Republic of Türkiye Treasury and Finance
Ministry Privatization Administration	-	-
Other (publicly held and tresuary share)	50.88 %	50.88 %
Total	100.00 %	100.00 %

The Company is controlled by Türkiye Wealth Fund.

The number of employees working for the Group as of 30 September 2023 is 52,414(*) (31 December 2022: 40,264). The average number of employees working for the Group for the period ended 30 September 2023 and 2022 are 49,458(*) and 38,009 respectively. The Group is registered in İstanbul, Türkiye and its head office address is as follows:

Türk Hava Yolları A.O. Genel Yönetim Binası, Yeşilköy Mahallesi, Havaalanı Caddesi No: 3/1 34149 Yeşilköy İSTANBUL.

The Company's shares have been traded on Borsa İstanbul ("BIST") since 1990. The Company and its subsidiaries will be referred to as "Group".

1. THY Destek Hizmetleri A.Ş. while its employees were working in different companies within the scope of outsourced services before 06.03.2023, they joined the Group as of this date.

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES

Notes to the Condensed Consolidated Interim Financial Statements

As At And For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

1. GROUP ORGANIZATION AND ITS OPERATIONS (cont'd) Subsidiaries and Joint Ventures

The table below sets out the consolidated subsidiaries of the Group as of 30 September 2023 and 2022:

Name of the Company

THY Teknik A.Ş.

(Turkish Technic)

THY Uçuş Eğitim ve Havalimanı İşletme A.Ş. (TAFA)

THY Uluslararası Yatırım ve Taşımacılık A.Ş.

THY Teknoloji ve Bilişim A.Ş. (Turkish Technology)

THY Hava Kargo Taşımacılığı A.Ş. (Widect)

THY Destek Hizmetleri A.Ş. (*) (TSS)

THY Özel Güvenlik ve Koruma Hizmetleri A.Ş. (**)

AJet Hava Taşımacılığı A.Ş. (***)

THY Finansal Teknolojiler A.Ş. (****)

TCI Kabin İçi Sistemleri San ve Tic. A.Ş. (TCI) (*****)

TSI Seats INC

	Ownership Rate	Country of
Principal Activity	30 September 2023	31 December 2022	Registration
Aircraft Maintenance
Services	100%	100%	Türkiye
Training & Airport
Operations	100%	100%	Türkiye
Cargo and Courier
Transportation	100%	100%	Türkiye
Information Technologies
and Consulting	100%	100%	Türkiye
Cargo Transportation	100%	100%	Türkiye
Support Services	100%	-	Türkiye
Security Services	100%	-	Türkiye
Air Transportation	100%	-	Türkiye
Financial Services /
Financial Technologies	100%	-	Türkiye
Cabin Interior Products	80%	50%	Türkiye
Cabin Interior Products	80%	100%	USA

1. THY Destek Hizmetleri A.Ş. was established on 06.03.2023 in order to meet the support service needs of the Incorporation's and subsidiaries' out of core business activities.

1. THY Özel Güvenlik ve Koruma Hizmetleri A.Ş. was established on 12.05.2023 as a 100% THY Destek Hizmetleri A.Ş. subsidiary in order to meet the private security services.

1. AJet Hava Taşımacılığı A.Ş. was established on 07.08.2023 in order to perform its activities as a low-cost airline at global standards and to strengthen its competitive position in the market.

(****) THY Finansal Teknolojiler A.Ş. was established on 18.08.2023 in order to meet carry out new business areas that the Company/Group will create through digital payment/collection channels, to transform its existing potential into a value-creating business model and to operate in the field of financial technologies.

(*****) The merger of the subsidiaries established for the design, production, marketing, and sales of cabin interior products, Uçak Koltuk Üretim Sanayi ve Ticaret A.Ş. ("TSI") and Cornea Havacılık Sistemleri Sanayi ve Ticaret A.Ş. ("Cornea") were dissolved without liquidation and TCI Kabin İçi Sistemleri Sanayi ve Ticaret A.Ş. ("TCI") to take over TSI and Cornea with all its assets and liabilities is completed on 15.02.2023. TSI Seats INC which is a subsidiary of ("TCI") operates in the USA.

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TÜRK HAVA YOLLARI ANONİM ORTAKLIĞI AND ITS SUBSIDIARIES Notes to the Condensed Consolidated Interim Financial Statements

As At And For the Nine-Month Period Ended 30 September 2023

(All amounts are expressed in Million US Dollars (USD) unless otherwise stated.)

1. GROUP ORGANIZATION AND ITS OPERATIONS (cont'd) Subsidiaries and Joint Ventures (cont'd)

The table below sets out the joint ventures of the Group as of 30 September 2023 and 2022:

Company Name

Güneş Ekspres Havacılık A.Ş. (Sun Express)

THY DO&CO İkram Hizmetleri A.Ş. (Turkish DO&CO)

TGS Yer Hizmetleri A.Ş. (TGS)

THY OPET Havacılık Yakıtları A.Ş. (THY Opet)

P&W T.T. Uçak Bakım Merkezi Ltd. Şti. (TEC)

Air Albania SHPK (Air Albania)

We World Express Ltd. (We World Express)

Goodrich Thy Teknik Servis Merkezi Ltd. Şti. (TNC) (Goodrich)

TFS Akaryakıt Hizmetleri A.Ş. (TFS Akaryakıt)

Vergi İade Aracılık A.Ş. (*)

		Ownership Share and Voting Power
Country of
Registration and
Operations		30 September 2023		31 December 2022		Principal Activity
Türkiye	50%	50%		Aircraft
	Transportation
Türkiye	50%	50%		Catering Services
Türkiye	50%	50%		Ground Services
						Aviation Fuel
Türkiye	50%	50%		Services
						Maintenance
Türkiye	49%	49%		Services
Albania	49%	49%		Aircraft
	Transportation
Hong Kong	45%	45%		Cargo and Courier
	Transportation
						Maintenance
Türkiye	40%	40%		Services
Türkiye	25%	25%		Aviation Fuel
	Services
Türkiye	-	30%		VAT Return and
	Consultancy

The Group owns 49%, 49%, 45%, 40% and 25% equity shares of TEC, Air Albania, We World Express Ltd., Goodrich and TFS Akaryakıt Hizmetleri A.Ş. respectively. However, based on the contractual arrangements between the Group and the other respective investors, decisions about the relevant activities of the arrangements require both the Group and the other respective investor agreement. Thus, the Group concluded that it has joint control over TEC, Air Albania, We World Express, Goodrich and TFS Akaryakıt Hizmetleri A.Ş..

(*) An agreement was reached to sell 30% of the Company's shares of Vergi İade Aracılık A.Ş., a share transfer agreement was signed between the Company and the buyers, and the closing procedures for the share transfer were completed on May 18, 2023.

2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS 2.1 Basis of Presentation

Statement of Compliance

The condensed consolidated interim financial statements as at and for the nine-month period ended 30 September 2023 have been prepared in accordance with IAS 34 "Interim Financial Reporting". They do not include all of the information required for complete annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2022.

The Board of Directors has approved the condensed consolidated interim financial statements as of 30 September 2023 on 1 November 2023. General Assembly and the related regulatory bodies have the authority to modify the statutory financial statements.

Basis of Preparation

The consolidated financial statements, except for some financial instruments that are stated at fair value, have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for goods or services.

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