The Message of Chairman of Board

Despite challenging economic and financial conditions created by global and local volatility, İhlas Holding maintained its strong performance in 2016.

Esteemed Shareholders,

We left behind a year marked by concerns about economic growth and political uncertainty: growth performance grew sluggish; Great Britain voted in a referendum to leave the EU; the US presidential elections were extremely tense; and Europe was hit by a banking crisis. All these factors added further risks to an already fragile global economic landscape. US economic activity did gain some momentum in the third quarter of 2016, while the Euro Zone economy was shadowed by various political shocks. The central banks of developed countries continued to set the tone for global markets in 2016, while emerging countries were adversely affected by risks arising from domestic dynamics, as well as the Fed’s monetary normalization measures and the trajectory of commodity prices. In particular, market tensions rising prior to the Fed’s limited rate increase at the end of the year, alongside concerns that Donald Trump could implement his electoral promises, resulted in a dramatic depreciation of emerging country currencies.

Turkey Preserved its Robust Stance through a Challenging 2016
The Turkish economy demonstrated a remarkable growth performance in the first half of the year 2016, despite global turmoil. However, the shocking coup attempt on July 15, a rise in terror incidents, and soaring geopolitical risks had a devastating effect on the domestic investment climate. Indeed, the national economy contracted 1.8% in the third quarter of the year, disrupting its 27-quarter growth streak. Nonetheless, in the wake of the coup attempt, the government exhibited a successful crisis management performance, disclosed incentives and measures to prop up consumption and investment spending, and took steps to rekindle economic activity, thereby restoring a favorable investment climate. We believe that Turkey is heading towards a bright future, and that it will continue to outperform its peers in the global economy in 2017.

The Holding’s Ever-Rising Performance
İhlas Holding maintained its strong performance in 2016 despite the tough economic and financial conditions created by global and domestic volatility. During the past year, we took significant strides towards profitability and productivity growth by further strengthening our robust financial structure in order to reinforce our Group’s sustainable growth performance. The Nation’s Interests at the Center of Our Operations In all our business lines, which include construction, timeshare management, media and communications, manufacturing, marketing, commerce, health and education, we continue to build upon advantages that help us stand out among the competition and our peers, and sharpen our edge. In 2016, we carried out important operations in line with rapidly shifting global trends and the Group’s medium- and long-term sustainability targets by further enhancing our business models and increasing the added value we create for shareholders.

Our Group companies likewise continued to shape their operations with a view to serving the nation above all else. In our construction business – our driving engine – we continue to invest in Turkey’s future from a social responsibility perspective. While national development, developing housing projects – each of which have become
a center of attraction in their community – and adding value to individuals’ lives have always topped the list of our corporate objectives, the Media Group, which laid the groundwork for İhlas Holding, reinforced its reputation in the media sector by standing by the Turkish people throughout the shocking coup attempt.

In the coming period, İhlas Holding will continue to undertake new investments for Turkey’s future, and to fully support any initiative that upholds the nation’s nterests. I would like to take this occasion to extend my gratitude to our highly qualified employees, all of whom embrace this perspective, and to our shareholders, who give us their unfaltering support.

Respectfully Yours,

Chairman of the Board of Directors