Burak Kuyan

Galata Wind CEO

Esteemed Stakeholders,

Looking at the global economic activity in 2021, some hot topics can be listed as the emergence of COVID-19 variants, vaccination, challenges in the supply chain, and inflationary pressures due to high commodity prices. The sharp decline in global trade due to the pandemic last year has given way to recovery as of the end of 2021.

At the same time 2021 was a year in which effects of the climate crisis have become violently concrete with different reflections in almost all parts of the world. Thus, global calls on the fight against the climate crisis have strengthened and collective pursuits and cooperation efforts have intensified. For mitigating the effects of the climate crisis and global warming not to exceed 1.5°C, the orientation towards renewable energy sources gained significant momentum. Transition to low or zero-carbon emission investments has increased in the global economy in the face of climate change. In other words, the new lever of the world economy will be sustainability-oriented changes in the industry and energy arena. There are strong and concrete developments to support these foresights.

We are reducing our country’s foreign dependency on energy supply.

The most important incident in the Turkish energy market in 2021 has been the effect of rising oil, natural gas and coal prices in international markets on electricity prices Adding to that; factors such as lack of operational efficiency, seasonality and drought, electricity prices in the spot market increased by 82% y-o-y. The energy demand in Turkey, which imports approximately 50% of its primary energy sources, increased by 7.7% y-o-y, following the stagnation period in 2020. Energy demand is expected to continue to rise in the upcoming term in line with the country’s growth rate.

With this regard, it is a necessity for the energy sector to evolve in Turkey. Renewables have now become notable and a penetrating source of primary energy supply. The share of renewable energy in total electricity supply has reached around 36% in 2021. Committed to diversification of renewable energy sources, Turkey reduces its foreign dependency on energy supply via generating clean energy at lower costs. The fact that the share of renewable capacity in the total installed power has reached to 54% by 2021 year-end is very vital; however, this ratio must further increase.

We are constantly increasing our efficiency with our operational expertise.

We forecast a brighter future for clean energy businesses like Galata Wind, which will take on stronger roles in economic growth thanks to the amplifying global sustainability perspective. For this reason, we are utilizing the latest technology in our power plants to carry out improvement works and to increase efficiency.

Galata Wind has started its journey in 2012 with two windfarms in its portfolio, in Bandırma and Mersin. Come 2021 year-end, we possess a 269 MW capacity consisting of Gold Standard and VCS certified wind and solar plants that generate 100% renewable and clean energy with an annual average of 775 GWh. We are considering additional increases in capacity whenever possible. Taşpınar WPP project which we recently have commissioned at full capacity in March 2021 has the latest technology equipment and the first turbines manufactured with 75 meter blades in Turkey. Taşpınar WPP will be a pioneer in the sector as it will have hybrid solar PV mounted inside.

Today, roof-top PVs turn every home, office, hotel, and any facility into a potential power plant. Therefore, we expect that some investments in this sector will shift towards that direction increasing the volume of installed roof-top PVs. With our subsidiary and brand Sunflower Solar, we also take part in this field and aim to increase the number of EPC projects we complete.

We stand out from the industry with our strong cash flow and low indebtedness.

Galata Wind definitely stands out from its peers with its strong capital structure and low level of indebtedness. The increase in company’s income from operations, gross profit, and electricity generation – all of which should be considered as key performance indicators for a company – demonstrates that 2021 has been a much positive year.

Galata Wind earned TRY 319.5 million (2020: TRY 272.2 million) in cash from operating activities in 2021. We have a huge potential in strong cash generation as well as TRY 262.2 million of accumulated profit from prior years as of 31.12.2021. The company’s carbon emission reduction (VER) certificate right sales revenues among its revenue entries were released as TRY 18.3 million in 2021. We believe carbon certificate revenues are an important entry in terms of sustainable cash flow.

As a company with the strength of TRY 534 million paid-in capital, having 80% of its income and only 21% of its expenses based in foreign currency, we have successfully concluded the year by increasing our net profit to TRY 170.9 million. In terms of net debt, we have been able to maintain a 1.1Net Debt/EBITDA ratio to date. We aim to further reduce our net debt amount despite our new investments planned for 2022.

Our ability to generate cash flow provides a great advantage for investments. In line with our growth vision, we will continue our investments domestically by purchasing power plants that have recently started operating and by developing our own projects with the valuable experience we have gained over the years. We do also evaluate the capacity increase opportunities of our existing power plants. At the same time, we plan to expand abroad for the purposes of asset and income diversification and risk distribution. We are closely interested in projects primarily in Southern Europe, the Balkans, and nearby geographies. I certainly believe, we are capable of increasing Galata Wind’s total installed power to 500-550 MW by 2025 year-end with new wind and solar investments.

We are working to leave a sustainable world.

As Galata Wind, we care for the world we live in. Instead of just quantitative targets, we act with a focus on sustainability, environment, and social responsibility while investing in the right projects that will add value to all our stakeholders. Galata Wind reduces approximately 400,000 tons of CO2 emissions via generation from renewable energy. As Galata Wind, we have given great importance to this issue for years and have been successfully undergoing international audits at periodic intervals.

In this context, we have made a commitment that Galata Wind shall never invest in fossil fuels but always in renewable sources. We believe clean energy is the future and we operate as a green company since our establishment.

At the same time, Galata Wind Enerji was given a rating of “57/100” in the “robust” category as a result of its sustainability valuation from Moody’s V.E.. We will be re-assessed in 2022 as a public company. I have complete faith that we will get higher scores by means of breakthroughs we have established in the area of corporate governance in 2021.

We are aware of our responsibility not just to the environment but to society as well. We continue to execute our activities with this effort. We believe in gender equality; moreover, we are committed to increase the ratio of women executives in Galata Wind over 30%. We have already fulfilled one of our IPO commitments to have at least 1 woman member in our Board of Directors. Last but not least, I proudly state that in Taşpınar WPP, Galata Wind employs a woman engineer which is unfortunately quite unlikely to observe in a power plant in Turkey.

We have made Turkey’s first green public offering.

As Galata Wind, we have initiated the process of “Turkey’s First Green IPO” in 2021 to present our stakeholders the values the company has already created and shall create in the future. Following some serious work and effort, the book-building occurred on April 15-16, 2021 and attracted a very high demand ranging from individual domestic investors to foreign funds. It was a very positive outcome both for Galata Wind and Borsa İstanbul. Doğan Holding, one of the major and most prestigious companies in Turkey, has a 62-year deep-rooted history and owns 5 public companies. Its subsidiary Galata Wind has also shown a great outcome during its IPO, proving that sustainable and eco-friendly power generation, foreseeable cash flow and margins, operational efficiency, solid capital structure, and growth potential are strongly welcomed by investors. Our motto of clean energy for the future, financial ratios, and sustainability perspective have attracted foreign investors as well. Galata Wind has collected a total of TRY 1.1 billion bids nominally in the public offering. The company provided its main shareholder Doğan Group with cash inflow of over TRY 800 million.

I hereby would like to thank all our investors for investing in the future by showing interest in Galata Wind, and to express that we stand behind our commitments and we will continue to work with this responsibility. The energy sector is a long road to walk and we make maximum effort with our 10 year of experience to better place Galata Wind for all of our stakeholders to benefit from.

The main target of Galata Wind, which tackles the climate crisis and determines its strategies within the scope of sustainability awareness, is to constantly grow by making investments and at the same time, to always distribute dividends to its investors. Considering the profits of prior years and steady cash flow in the balance sheet, as Galata Wind, we plan to distribute at least 5% of paid-in capital every year in dividends, while achieving sustainable growth with our new investments.

In order to improve ourselves in the field of corporate governance, we do our best for transparency, to simultaneously share all necessary information with investors, to be in harmony with international standards as much as possible, and to maintain consistency with periodic audits.

We will continue to put in maximum effort to honor the commitments that we have given during the public offering. As Galata Wind, we will go forward with the determination to support our planet’s natural life cycle by generating 100% renewable electrical energy with our solar and wind power plants and contribute to our country’s economic and power transition.

I would like to thank all our stakeholders, specifically my teammates, who trusted and supported Galata Wind in 2021.

Best regards,
Burak Kuyan
Chief Executive Office