TKKYY (TKKYY) Q2 2026 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and I would like to welcome you to Sisecam's Investor and Analyst Call for the first half of 2026 Results Call on the 17th of August 2026. [Operator Instructions]. Today's call will feature our presentation by the management team followed by a question-and-answer session. Without further ado, I would like to pass the line to the CEO of Sisecam, Mr. Can Yucel. Please go ahead, sir.

Hello, ladies and gentlemen. Welcome to our earnings presentation for the first half of the year 2026, and I am very pleased to meet you all again to share our operational and financial results. Today, I'm together with our CFO, Gökhan Güralp, and our Investor Relations Director, Hande Özbörçek. Now I would like to hand over to our CFO, Mr. Guralp for the presentation and the review of our first half consolidated results. Gökhan, please? Gökhan Güralp: Thank you very much, Mr. Yucel. Good day, ladies and gentlemen, and welcome to our webcast audio call. I hope that everyone is safe since we last spoke, and I would like to thank you all for joining us today. We will commence today's webcast by presenting our financial and operational results for the first half of 2026 with a particular focus on the performance of our 4 business lines. Subsequently, we will detail our cash position and capital allocation. Following the review of operational and financial results, we will conclude today's presentation by updating you on our company's sustainability journey. As always, we will be pleased to take your questions at the end of the presentation. Please be reminded that the presentation and Q&A session may both contain some forward-looking statements. Our assumptions and projections are based on the current environment and may therefore be subject to change. Before we begin our financial review, let me briefly remind you that in line with regulatory requirements, Turkish companies, including Sisecam, continue to prepare their financial statements under IAS 29 inflationary accounting. Therefore, the first half 2026 financial results together with the comparative figures for 2025 are presented in accordance with Turkish Financial Reporting Standards and expressed in terms of the purchasing power of the Turkish lira as of June 30, 2026. As in previous periods, we have also reserved certain key financial indicators on pre-IAS 29 basis at the end of the operational and financial review section. This set of info has already been provided to our main shareholder as financial institutions are exempted from the implementation of IAS 29 standards. We concluded the reporting period with a consolidated revenue of TRY 122 billion, down by 8% year-on-year. Revenue performance continued to be affected by a mismatch between the domestic inflation rate and the depreciation of TRY against the hard currency basket. During the period, annual inflation stood at 32%, while the reporting currency depreciated by 16% against the hard currency basket, limiting its translation of our international operations into reported revenue growth. In addition, performance varied across our business lines, reflecting different market dynamics and conditions across our diversified portfolio. Core business lines sales volume performances were maintained by Architectural Glass and Chemicals operations offsetting softer trend in Glassware and Glass Packaging. Product pricing improvements were visible across all Glass businesses and geographies in USD, but pricing in our soda ash underperformed the prior year, primarily reflecting persistent global oversupply conditions. Throughout the first half, geopolitical developments, particularly in the Middle East led to heightened volatility in energy markets, while inflationary pressures continue to impact production cost and consumer confidence across several regions. These challenges were not unique to our company. Across the global glass and material sectors, companies continue to operate in an environment characterized by weaker industrial demand, elevated energy market volatility and ongoing geopolitical uncertainty. At Sisecam, we maintained disciplined pricing, agile production planning and strict cost control measures. Combined with the growing contribution of value-added Architectural Glass products and efficiencies attained through ongoing initiatives, particularly in Industrial Glass business line, these actions enabled us to preserve a healthy gross profitability profile and deliver a gross margin of 27%. OpEx to sales ratio came in at 29%, higher year-on-year but broadly flat compared to the first quarter of 2026. The increase versus the prior year mainly reflected lower product prices in Chemicals operations, higher logistic costs, primarily visible in the Glassware and chemicals operations associated with energy market volatility and elevated general and administrative expense in an inflationary environment. Nevertheless, the change in consolidated OpEx to sales was kept under control on a quarter-on-quarter basis, thanks to the benefits of ongoing efficiency initiatives and cost optimization measures. While the benefits are still emerging gradually, the actions implemented under the efficiency management and cost control program continue to support operational flexibility, cost discipline and profitability across our portfolio. Our EBITDA recorded at TRY 3.7 billion, translated into a margin of 3% compared to 13% in the prior year. The year-on-year decline mainly reflects the high base of last year, when the independent appraisal study on our investment portfolio resulted in a TRY 2.4 billion revaluation gain supported by a fair value increase exceeding inflation following a change in the title deed nature of one property. This year, the effect moved in the opposite direction. We recognized TRY 3.5 billion impairment loss in connection with the sale of our Beykoz investment property. Additionally, the termination of Stockton Port project and the discontinuation of the partnership with [indiscernible] Global netted a booking of TRY 1.2 billion in total as investment expense. On top of this, half year appraisal studies show that the remaining investment property portfolio and plant property and equipment on hand have not kept pace with inflation resulting in a further revaluation loss of TRY 2.8 billion. These non-recurring items had a total negative effect of TRY 7.4 billion on our EBITDA, leading to more than 610 basis points dilution on our EBITDA margin. Under inflation accounting, the book value of investment of properties is first indexed for inflation. If the independent base value comes below this inflation-indexed carrying value, this difference is recognized as a revaluation loss. At the same time, as the balance sheet values is updated based on the appraisal value, the inflation index adjustment creates a monetary gain, which partially offset the impact of these noncash valuation losses on the income statement. This outcome is also consistent with broader trends in the Turkish real estate market. According to residential property index data, residential property prices continue to rise in nominal terms in 2024, 2025 and as of June 2026, but remained negative in real terms. The real decline was 10.4% in December '24 narrowed to 1.4% in '25 and rising again to 5.8% as of June '26. Therefore, we primarily view the EBITDA decline as the result of non-operational and non-cash investment property valuation movements rather than a deterioration in the underlying profitability of our core operations. At the same time, while market conditions remained challenging across several of our businesses, indicators that are within our control, including portfolio quality, value-added product penetration, operational efficiency and customer diversification continues to develop in the right direction during the first half. Parent Only net income was flat at TRY 5.4 billion with 4% margin, thanks to nearly TRY 12 billion lower net financing expenses, supported by disciplined liquidity management, funding optimization measures and enhanced returns generated on cash balances. TRY 17 billion recorded as monetary gains, up by 11% year-on-year, also supported the earnings. On Slide 5, we would like to demonstrate the underlying performance of our company, excluding the impact of inflation accounting. As you are aware, for this purpose, we use adjusted EBITDA, which is defined as EBITDA adjusted for the effects of inflation accounting through the elimination of monetary gain/loss impact on relevant P&L items. As can be seen, the cumulative impact of inflation accounting on the relevant P&L lines amounted to TRY 13.4 billion, largely attributable to cost of good sold and investment activities. With the majority of our industrial capacities located in Turkiye and operating in high inflation environment, the impact of on cost is inevitable. This is reflected in. Higher direct labor expenses and elevated production overheads. Inflation accounting also inflates inventory values. As defined in the impact on cost, while initially high inventory turnover of our business further increases the effect of cost of goods sold. In addition to these operational impacts, this reporting period also included significant noncash valuation effects related to our investment property portfolio. Revaluation and impairment losses recorded on noncore assets reduced reported profitability. As discussed on the previous slide, under the IAS 29 framework, the revaluation loss also came with additional monetary gains in the income statement. Accordingly, adjusted EBITDA calculation indicated a consolidated profitability figure amounted to TRY 17.1 billion and translated into a 14% adjusted EBITDA margin. Yes, we fully recognize that the current profitability level doesn't reflect the earnings potential of our diversified asset base, market positions and global footprint. Accordingly, improving returns, strengthening cash generation and enhancing profitability remains one of our top management priorities. We believe recently commissioned capacity, portfolio optimization initiatives and efficiency measures will act as solid basis of improving profitability and cash generation over time. Moving on to the next slide. Once again, in the reporting period, our operations portfolio maintained a well balance structure with Glass Operations accounting for 2/3 of consolidated revenue. Architectural Glass, our largest glass operation, operated with 5.1 million tonnes per annum gross flat glass production capacity in Turkey and Bulgaria, Italy, India and Russia as well as one line in Egypt in partnership with Saint-Gobain. The business line contributed 26% to consolidated revenue and remained the largest EBITDA contributor with 55% share. Profitability was supported by a more favorable pricing environment, improving demand for energy-efficient glass solutions and the increasing contribution of value-added products. Regulatory trends promoting higher energy efficiency standards in building also continued to support long-term market fundamentals. The commissioning of new coated glass line in Italy, Bulgaria and Turkey, together with the ramp-up of our Tarsus investments further strengthened our value-added product portfolio. The contribution of the new flat glass furnace, coated glass capacities, patterned glass furnace and solar glass processing line supported both operational efficiency and product mix improvement across the business line. Our 3.5 million tonnes per annum glass packaging business line with its 26 online furnaces at 10 production facilities and in 4 countries, including Hungary remains the second largest contributor to our consolidated performance. The business line accounted for 23% of consolidated revenue and 33% of EBITDA during the reporting period. As previously announced, we commissioned our Hungary greenfield investment at the beginning of 2026, marking an important milestone in the expansion of our European footprint. The facility is currently progressing through its test production. Therefore, we expect the benefits of these investments to gradually materialize as this operation becomes fully integrated into our commercial network. Chemicals operations ranked as the third accounting for 21% of revenue. The business line's share in EBITDA came in at 7%. Despite persistent global oversupply conditions in the soda ash market, the business line continued to leverage its diversified customer portfolio, operational discipline and strategic positioning in natural soda ash to mitigate the impact of market conditions. Industrial Glass business line, which accounted for 13% of consolidated revenue continued its profitability recovery and contributed 18% of consolidated EBITDA during the reporting period. The benefits of operational efficiency measures in Europe and in Turkey, portfolio optimization initiatives and greater focus on value creation continue to support the segment's earnings profile. From our Glassware operation with 524 kilotonnes per annum gross capacity, we generate 11% of our consolidated revenue. However, the business line had a dilutive effect on EBITDA given the unfavorable demand trend. Energy segment's performance was primarily driven by our electricity trading activities accounted for 4% of consolidated revenue. This segment had a limited contribution to consolidated EBITDA reflecting softening spot pricing environment given the composition of electricity resources. On the next 2 slides, we aim to present the key takeaways regarding the first half performance of our 4 business lines on an individual basis. Provide you with a concise summary of our glass and chemical unit's performance in comparison with the prior year from a operational financial perspective. Architectural Glass. Architectural Glass business line generated TRY 31 billion net external revenue moving up by slightly more than the inflation rate, reflecting a [ decent ] performance despite continued macroeconomic uncertainties, tight financing conditions and ongoing geopolitical conflicts. EBITDA margin stood at 17%, down by nearly 210 basis points year-on-year. The business line benefited from increased production capacity following relighting of Northern Italy furnace and the commissioning of new flat glass furnace in Tarsus. Even beyond the capacity contribution, these investments enhance operational flexibility and strengthen our value-added product portfolio, particularly in coated and energy-efficient glass applications. The commissioning of coated glass and energy glass investments further reinforce our ability to serve growing demand in higher value-added applications in Turkey and Europe. Production performance remained strong with 8% growth year-on-year despite ongoing cold repair activities at certain facilities. Even during the ramp up phase of newly commissioned capacity and the enlarged production base, active capacity utilization rate kept -- was kept at 87%. Demand conditions remained mixed throughout the period. In Turkiye, the urbanization and renovation activities continue to support demand while value-added products further strengthen the sales mix. Solar glass emerged as one of the key growth drivers during the period, supported by the new capacities that we commissioned back in September 2025 as well as -- while the market continued to expand, we delivered substantially stronger growth through deeper market penetration and import substitution. Resultantly, we increased our market share in this product for last year's 16% level to 40% in the reporting period, leveraging our scale, operational reliability and integrated manufacturing capabilities. We continue to strengthen our role in shaping the regional ecosystem and creating a more resilient local supply base. Coated glass products delivered a higher contribution particularly in value terms, reflecting increasing demand for energy-efficiency glazing solutions. This trend is also consistent with the increasing regulatory and industry focus on building energy efficiency in this region. Export markets remain competitive, particularly in regions affected by geopolitical developments, increasing contributions from Europe and Asia Pacific has offset softer demand in certain Middle Eastern markets, demonstrating the benefits of our diversified commercial footprint. Combined with the performance of direct exports, overall sales volume of Turkiye-based facilities grew by 5% year-on-year. In Europe, market conditions remain selective amid a cautious customer purchasing behavior and subdued construction activity. Against this backdrop, we continue to prioritize value-added products and customer portfolio management. Recent coated glass investments in Europe moved up the share of coated products in our European sales mix by around 450 bps in volume and close to 600 bps in value terms. Meanwhile, market dynamics in India and Russia remained mixed throughout the period. As a result, consolidated sales volume was flat year-on-year, yet despite mixed market conditions across regions, our average standard product prices increased by 18% in USD, thanks to pricing, continued growth in various products, expanded production capabilities and a diversified commercial footprint. Industrial Glass. Our Industrial Glass business line consisting of automotive glass, encapsulation and glass fiber operations generated TRY 16 billion of net external revenue during the first half of 2026. EBITDA margin came in at 12% compared to minus 3% in the prior year, thanks to ongoing operational efficiency initiatives and product mix. Auto glass sales volumes evolved broadly in line with OEM production schedules and a richer product mix, partially offsetting tonne sales underperformance as opposed to low double-digit decrease in unit sales. The increasing contribution of heavier and more sophisticated products help mitigate volume-related pressures and support value creation. The auto replacement glass channel remains another important pillar of performance. It's recurring demand profile and customer base continued to grow steadily and partially offset softer OEM trends during this period. Glassware. Glassware, our business line, generated TRY 14 billion net external revenue, operating in a market environment characterized by cautious consumer spending, elevated geopolitical uncertainties and softer demand across markets. Half of the business line revenue results from international operations. The business line has recorded minus 10% EBITDA margin. Consolidated sales volume was down by 5%, yet flat sales on a unit basis reflected our continued focus on sales mix management and higher value-added products. In Turkiye, domestic performance remained comparatively strong. National chain stores, wholesaler retailer channels and the B2B segment all contributed positively, supporting volume growth and further strengthening our market position. According to third-party market data, the business outperformed the underlying market growth by 700 bps through effective commercial execution and strong brand equity. With this, our market share moved up by 400 bps to 70% in unit terms. International market presents more mixed picture. While demand was influenced by elevated customer inventories, low-cost imports and geopolitical uncertainties in certain regions, we continue to strengthen our position in select European markets. The HoReCa channel and Pasabahçe premium segment delivered a positive contribution, while our ongoing focus on higher value-added products supported commercial performance across international operations. Pricing actions were implemented in line with regional market conditions and cost development, supported by price adjustments introduced since 2025 and a favorable sales mix, average consolidated price per ton increased by 3% year-on-year. Glass Packaging. Glass Packaging business line generated TRY 28 billion net external revenue compared to TRY 29 billion in the prior year. Despite softer demand conditions across several end markets, pricing remained supportive throughout this period, helping offset volume weakness and reflecting our disciplined commercial approach. EBITDA margin stood at 12%, down by close to 320 bps year-on-year. During the first half, production was impacted by planned cold repair activities in Turkiye and output optimization efforts in the CIS region. Consolidated outlook was down by 6% year-on-year. Despite these temporary operational constraints, we maintained our capacity utilization levels across the network at 90% while continuing to align production with market conditions. Demand trends were mixed throughout the period. In Turkiye, sales to food fillers and mineral water producers were supportive, while certain alcoholic beverages categories remained limited. Export performance was strong, backed by geographical diversification, market share gains in Europe and a broader customer portfolio. As commissioning activities at our Hungary facility progressed, we continue to strengthen customer relationships and commercial presence in Europe, helping offset weaker demand in certain middle eastern markets. Market conditions were challenging throughout the first half of -- in the CIS region. In Russia, weaker consumer sentiment, tax-driven price increases and softer demand in alcoholic beverage categories continue to be the factors affecting the consumption. Meanwhile, our Georgia operations delivered a strong performance, partially offsetting the limited momentum in the region. As a result, consolidated sales declined by 4% year-on-year. Nevertheless, disciplined pricing actions, favorable product mix and currency effects supported pricing performance, leading to an 11% increase in average price per tonne in USD. Chemicals. Chemicals segment generated TRY 26 billion net external revenue amid the continued pressure across global chemicals markets. EBITDA margin stood at 3% versus 14% in the first half of 2025. In soda chemicals, challenging market conditions persisted throughout the reporting period. Global supply continued to increase following new soda ash and sodium bicarbonate capacity additions in China, while demand recovery across several key end markets remain selective. As a result, pricing environment continued to move along a weaker trend. Despite this on top of geopolitical conflicts, we maintained a solid sale performance supported by customer acquisitions, strong domestic demand and the flexibility provided by our geographically diversified production and sales network. Planned maintenance activities and temporary operational disruptions experienced during the period had a low single-digit impact on the consolidated output to our diversified manufacturing footprint. Commercial execution remained strong throughout the period. Domestic soda ash sales increased significantly with higher deliveries to local customers as well as strategic reallocation of some clients from Turkiye-based operations to Europe-based -- European zone-based facilities in response to the implementation of the ETS supporting competitiveness across export markets. As a result, consolidated soda ash sales volume remained broadly stable despite challenging global market conditions. In Chromium Chemicals, demand conditions remained weak throughout the first half, particularly in leather applications, heavy competition persisted across several end markets. Despite lower sales volumes, pricing performance continued to benefit from cost pass through initiatives in addition to active product mix management. As a result, consolidated Chemical sales performance was slightly down on a year-on-year bases while per ton net soda ash sales declined by 8% on average in USD. In Chromium Chemicals, average price increased by 6% compared to the same period last year, supported by [indiscernible] price actions and commercial execution. Moving on to Slide 9 with our production facilities located in continents and 12 countries diversified operations portfolio and a broad product offering, we continue to serve our customers across the globe. Despite the significant challenges posed by the disparity between TRY inflation and currency depreciation, international sales accounted for 61% of consolidated top line. Export revenues reached USD 464 million, of which 62% was generated from products shipped to Europe. Including revenues generated by our European production facilities, the region accounted for 32% of consolidated revenue and remains our largest non-Turkey end market. U.S. market exposure through sales from U.S. natural soda ash operations as well as exports stood at 11%. Accordingly, our developed market exposure came at 43%. On Slide 10, you may see the details on our liquidity position. We ended the reporting period with USD 608 million cash and cash equivalents, including USD 144 million financial assets, of which USD 59 million Eurobond investment maturing this year. Gross debt stood at USD 3.7 billion with a term structure of 79% long term and 21% short term. 89% of the gross debt was denominated in hard currency and 96% of the remaining balance was in TRY. The interest rate structure comprised of 69% fixed to 31% variable. The hard currency share of cash and cash equivalent, excluding financial investments, stood at 45%. Resultantly, our net debt position amounted to USD 3.1 billion. As a result, our net leverage ratio came in at 9.6x and monetary gain loss adjusted EBITDA figure indicates a net leverage ratio 3.9x. While leverage metrics remain elevated, the deleveraging and balance sheet strengthening remain key priorities going forward. We also continue to assess opportunities regarding noncore assets as part of our broader capital allocation and balance sheet management framework. We had a net long FX position of TRY 17 billion with TRY 528 million in long in US and TRY 163 million short in Europe. Moving into the Slide 11. Our CapEx recorded at TRY 12 billion was 38% lower than the amount recorded in the prior year. Our capital expenditure amounted to USD 270 million based on a period average rate, close to the half of the outflow recorded in the same period of the prior year. The distribution of CapEx across business lines was as follows: 41% of total CapEx was attributable to our Architectural Glass segment, mainly in relation with the cash outflow on the newly commissioned investments as well as Coated Glass line was -- that is being constructed in India. Capital expenditures with regard to the greenfield Glass Packaging investments in Hungary, the commissioning of which was announced in the first quarter of this year, and payments made in relation with cold repair process in Turkiye correspond to 36% of the total. Chemical segment accounted for 6% of consolidated CapEx figure with payments mainly related to operational efficiency and maintenance investments in [indiscernible]. The remaining balance was mainly related to other segments under which Sisecam efficiency enhancement investment, digitalization and R&D projects were booked. Sustainability-focused renewable energy investments carried out across the group as part of 2030 sustainability goals were also booked under this segment. We ended the reporting period with a cash outflow from operating activities of TRY 2.2 billion increase in working capital needs in connection with the ramp-up of newly commissioned facilities leading to higher inventory and the adjustments stemming from the sale of noncore assets, including vehicles, land, including the monetary loss on cash and cash equivalents recorded a negative free cash flow, TRY 28 billion versus TRY 26 billion in the prior year. Including cash collected from the land sale, free cash flow had a negative balance of TRY 20 billion. Going forward, with the completion of most major expansion projects, investment-related cash outflows are expected to be moderate compared to previous periods. Working capital optimization remains a key focus area. Inventory levels associated with newly commission facilities are expected to gradually normalize as ramp-up process progress. On Slide 12, you may see our key financials without the impact of IAS 29 as provided to our main shareholders for their consolidation purposes as announced on the PDP for the information symmetry. In the following section, we will update you on our sustainability journey. We have published our second TSRS-compliant sustainability report prepared in accordance with Turkiye Sustainability Reporting Standards issued by the Public Oversight, Accounting and Auditing Standards Authority. In this report, we provide a comprehensive overview of our sustainability governance framework, our resilience to climate change and the risks and opportunities arising from the business -- from our business model. We also present detailed information on our risk management at both corporate governance practices related to sustainability and the role of our product portfolio in managing the impact of climate change. The Turkish and English versions of our 2025 TSRS-compliant sustainability report are available at sustainability.sisecam.com. As a separate note, on June 17, 2026, we met with sustainable-focused investors across the three separate sessions as a part of Barclays Emerging Market Corporate Day 2026 event. During the meetings attended by representatives from Sisecam's Sustainability and Investor Relations team, to provide insight into Sisecam's sustainable strategy, sustainability journey, targets and the progress made towards achieving this goal were shared. Update on our ESG performance provided, investors questions were addressed, and comprehensive overview of our ongoing sustainability initiatives was offered. In line with the transparency and equal information sharing principle, the presentation used during these meetings, but also made available on our website. Finally, the 14th Sisecam International Glass Conference was held in Istanbul this year, bringing together leading representatives of the glass industry, academia and technology experts. Organized under the -- under the theme 'United to Innovate' a future focused transformation of energy and glass, the event addressed key topics at the heart of the industry's transformation, including decarbonization and energy efficiency and digitalization. The conference share [Audio Gap]

Ladies and gentlemen please stand by. Gökhan Güralp: Ladies and gentlemen we already shared the presentation. Now we are ready to get your questions. Let's start to the Q&A session.

[Operator Instructions] Our first question comes from Cemal Demirtas from Ata Yatirim.

My question is very much related to the outlook in the second half of the year. We see that the margins are still under pressure, and it's one of the lowest levels we have seen. So what should be the catalyst in the second half of the year? Or is it early to expect any catalyst in the second half of the year to see some recovery in your -- the operating performance? That's my first question. And the second question is about the impact of this corporate tax cuts is starting by 2027 from 25% to 12.5% for the production operations in Turkey. I see that your net deferred tax asset position. But of course, it includes all international operations. My question is, what was your net deferred tax asset or liability position in Turkey operations? And what was the impact of that the change in statutory tax rates on your tax position or like effective tax rate?

Thank you very much for the questions. We'll start with the first one and give a brief explanation on the second question. Gökhan will provide details more on that one. Starting with the first one, yes, it's been a challenging period first half of year, especially in the second quarter because of the change in the environment and the current tension is clearly impacting our cost base energy side which we see at the cost on that side is currently being leveled and necessary price increases are currently being accepted by the market. So we will see improvements there in the second half of the year. And also, we will be seeing the support coming from our new facilities. As you know, we made our new lines operational starting from February 2026 and the latest one is in operation at the end of the first half of the year, and they are all completing their ramp-up period which we clearly see, especially smaller sites, we will see their contribution in the following half of the year. And the last one is as per the other glass manufacturers globally, the Chinese competition is clearly affecting us as well, just like the other glass manufacturers, and we are taking all necessary measures on that side, especially through regulatory authorities on export restrictions. And now we actually improved or get the results that we expected, especially on the Turkey side. You will see its impact in the following half of the year as well. And going back to our deferred tax asset, yes, there is a change in the regulation, and it clearly affected us in the meantime. Our effective taxation amount ratio was all the time lower than the existing ratios due to our incentives and the current regulation affected us on that basis. And I can clearly say we will see improvements on that amount in the following half of the year through the completion of the investments and also through other means in the meantime. Gokhan, maybe you can comment more on... Gökhan Güralp: Just Cemal also the Turkish part of the deferred tax side. If you look at the disclosure note 31 in the report, you can see directly the impacts on the Turkish side easily. Because of the inflationary accounting application, we are creating here in Turkey, deferred tax liability. And with the tax rate decrease, the liability part calculated from temporary differences decreased. That's why we benefited from the tax rate decrease in Turkey in terms of tax asset and we already write account that deferred tax income from this part. And also the main items in the disclosure noter are coming from Turkey. The other regions, they do not create such material differences. That's why you can see directly the impact of deferred tax especially the tax rate change in liability side vis-a-vis with the decrease of especially property equipment and on the other hand, investment for property side and also with the retirement pay liability side.

Okay. It's clear from my side now. And one last question is about the EBITDA margin in the Glassware, Energy and Others are all in negative territory. And should we expect at this apart from the main operations, should we expect some recovery on those fronts, for instance, Energy or even the Glassware side?

Actually on the business side that you mentioned as we explained all the time, we're all committed to provide positive margins on both sides. And energy side, it is very evident that the current market conditions is adversely affecting our performance, which we will be realized very soon. And on the Glassware site, it is business line, which is the trademark of Sisecam and we are creating strategies to get back to at least expected margins on that side as well, and we're trying to at least redefine the business to be online as usual.

Our next question comes from Evgeniya Bystrova from Barclays.

I have a few questions. I'll start with the question about liquidity and free cash flow. What is your expectation for the free cash flow for the second half of the year? And where do you see the free cash flow may be for the full year in 2026, given there was a significant cash burn in the first half of the year? And what are the maybe additional sources of liquidity that you can tap into? I know you have a portfolio of assets that you can potentially monetize. Could you please remind what is the size of the portfolio, maybe do you have any maybe comments on the timing of those asset disposals, et cetera? And my second question is about the Chemicals segment. In terms of like the margin decline, what would you say is the percentage point impact of weaker prices or weakness in pricing? And what is the impact of maybe cost pressures? And also, obviously, you mentioned that Southeast Asia is the most affected region given the Chinese oversupply. But what is going on with prices in other regions? Any color on that would be helpful. And also finally on Chemicals. Could you please elaborate on the operating issues in Wyoming operations? Did they happen, I think more specifically on the transmission line outage, did it happen in Q2 or in Q1?

Again, thank you very much for your questions. For the liquidity side, this year is a period where Sisecam has completed all ongoing investments of the Coated lines, our packaging facility in Hungary and also some other minor investments has been fully completed. Therefore, this is a year where we use our cash the most. And on top of it, the overall global economy is providing [ more muted ] margin [ as you see ]. And cash liquidity is our top priority all the time. And we're always trying to maximize cash as we go up to now. And as you mentioned, we have some nonoperative assets in hand, which do not provide EBITDA and cash and which we are very clear on disposing them to create additional cash for our balance sheet. And you see we did the first move on the assets, which was located in Beykoz and we have larger assets waiting for us. And especially following the capacity optimization routes as we do for the automotive glass. There are some other assets which are available for the purposes as well on top of what we have in hand, and we are very clear on selling those assets, if necessary. And we are also in discussions with possible buyers, but we are not in a rush for the moment to dispose those assets very quickly, and if necessary, than they are on our agenda. On the Chemical side, the Chemical story has its own story specific to this year, because this year it has been more characterized by oversupply coming from China, and it is affecting the U.S. export market, which is mainly towards Asia Pacific. It is a common problem for all the producers in U.S. for the moment. And apart from that, our operations and margins in other fields, our margins and operations from Turkey, our margins and operations within mainland U.S. and South Americas is still performing pretty good, and we are expecting to see improvements on the Asian Pacific market as well because the overcapacity or oversupply originating from China is not sustainable in many ways, and it has to be rationalized in the future.

And on the Wyoming issues, operating issues, if you can comment on that, would be very helpful.

Actually it's a very short-term shortage, and it is not something that will occur again. It is a onetime issue that has been sorted out by our technical teams.

And it wasn't in Q2, it happened? Gökhan Güralp: Yes it happened in Q2, yes.

[Operator Instructions] Our next question comes from [indiscernible].

My question was on the profitability and EBIT margin, but you already shared light on [indiscernible] and so I'll just follow on that. I do understand the unfavorable environment, subdued demand conditions, burden of energy costs and effects of geopolitical pressures in global markets. In this regard, prioritizing cost management and efficiency programs indeed contribute to the defensive side. But for a long time, we are witnessing struggles on operational results. Considering Sisecam's has also completed crucial investments when this can reflect the numbers? And do you have a midterm target range for EBIT margin?

Thank you very much for your question, and you've been pointed out that the global conditions are not very favorable for the moment, and it is a period where we completed our own investments or ongoing investments, and we expect them to be producing EBITDA contribution in the following half of the year. The Energy side is leveling after short-term shocks, but it is not prevailing, and the pricing on the revenue side is supporting EBITDA margins after the energy cost has increased. And for us, for Turkey, it another story because we are immune to energy shocks compared to other parts of the world, which is creating an advantage for us. And therefore, I see in the following half of the year, we will see more improvements on the EBITDA side in line with the ramp-up period of our new investments, but demand is picking up slowly, and we have to see improvement on the demand side, which we are seeing the signs, but as you mentioned, global economy is not providing stability for the moment. Therefore, if we can clearly see future or the clarity is there, then we will be commenting more accurately.

Our next question comes from Evgeniya Bystrova from Barclays.

Yes. I hope there are no other people in the queue. Just a quick question on CapEx. What's your expectation for the CapEx for the year? Gökhan Güralp: Yes. In the first half, we reported USD 270 million as capital expenditure. And as you remember, we guided around USD 500 million to USD 600 million CapEx projection for this year, but most probably we will accordingly manage our cash depending on the results, and that's why we -- up to $500 million, the estimation is up to USD 500 million, but depending on free cash flow, we will continue in discipline in order to monitor less cash burning.

Mainly on top of what Gokhan has explained, I would like to underline, we will not have any new CapEx, new facilities, new lines in the following years with the existing business plan. We already completed our ongoing investments. I am always keeping our U.S. investments aside because we already have completed our permits there, and we have time to assess the investment feasibility, which may improve also in the future. Therefore, we have time on this side as well. But other than that, we don't have any new CapEx other than ongoing CapEx for renewals, et cetera. And for Sisecam, our global expansion in the following period and also in the following years, we'll be more focused on not building new lines or capacities, but being more active in different new markets and trying to get market share on that side.

[Operator Instructions] Looks like we don't have any further questions. So I will turn it over to Sisecam's team for the closing remarks.

I would like to thank you very much for all the participants, and would like to see you on the year-end financials again. Thank you very much. Gökhan Güralp: Thank you.

This concludes the call for today. We are now closing all the lines. Thank you, and have a nice day.