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Turkey’s Petkim wins ‘Best Working Capital Management Award’

“Awards received during the pandemic mean even more,” says Elchin Ibadov, Head of Finance, SOCAR Turkey Refinery and Petrochemicals

Petkim, a subsidiary of SOCAR Turkey, received the ‘Best Working Capital Management Award’ given by the International Finance at the International Finance Awards while Betül Sarıkaya, CFO at SOCAR Turkey Gas Business Unit, won the ‘Best Woman FCO Award’.

Noting that these awards meant even more since they were won at a challenging period due to pandemic, Elchin Ibadov, Head of Finance at SOCAR Turkey Refinery and Petrochemicals Business Unit & CFO, Petkim said, “Being awarded in two categories at the International Finance Awards crowns our financial performance during this challenging period. We view the Best Working Capital Management Award as a strong confirmation of our successful performance at Petkim.”

“Thanks to the correct management of FX and interest rate risks as well as financial instruments, optimisation of operational costs and effective business capital management during the uncertainty of the global environment, we achieved extremely successful financial results under very challenging conditions.”

“As Turkey’s first and only integrated petrochemical facility, Petkim enjoyed the advantage of having the uninterrupted supply of high-quality petrochemical raw materials through its integrated operation with yet another SOCAR Turkey group company, STAR Refinery. This allowed Petkim to save considerably on logistics costs as well.”

Uninterrupted production amid Covid-19 pandemic
With an investment of $19.5 billion to date in petrochemicals, refining, natural gas and communication, SOCAR Turkey remains the biggest shareholder in Petkim. Ibadov noted that the refinery margins had remained very low across the entire industry worldwide due to the extraordinary conditions caused by the pandemic, which meant difficult times for all investors. Reiterating their belief that this was a temporary situation, Ibadov shared their observation that it would take some time before the refining margins returned back to normal.

“During this problematic period for global petrochemicals production, SOCAR Turkey continued without interruption in its production with our group company Petkim. In this success, the integrated structure of our subsidiary STAR Refinery with Petkim gave us an edge by ensuring uninterrupted production. We sustained our exports while continuing to supply the raw materials needed by the Turkish industry,” he added.

Increased operational profitability by 21% y-o-y
Elchin Ibadov said that the global supply shock experienced in plastic raw materials during the pandemic had also been reflected on the international prices of the said products, causing major price hikes. Increased raw material prices were caused by the supply shock, the increased demand for products like facemasks, sextupling container costs, and disruptions in the supply chain. He said, “At Petkim, as a company fully integrated to the global markets, we maintained our strategy of following a competitive price policy in line with the international polymer prices.”

“In 2020, we boosted operational profitability by 21 percent year-over-year to TRY1.9 billion. We are immensely pleased with the recognition in the Best Working Capital Management category of the performance posted in inventory, receivables, cash and debt management by Petkim.”

Record-breaking sales
Pointing to the unexpected developments seen in the supply and demand of petrochemicals caused by the pandemic particularly in the first quarter of the year, Elchin Ibadov said that despite everything, the company achieved a record-breaking TRY5 billion in sales during this period. Compared to the first quarter of 2020, the company posted 82 percent growth during an extremely challenging period.

“In a similar performance in gross profitability, we posted TRY1.2 billion in profits. It was also a successful quarter in EBITDA (operational profits) figures, which reached nearly TRY1.2 billion. Meanwhile, we also reached our goal of meeting the targets of our investors with TRY 892 million in net profits,” Ibadov added.

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