Good afternoon, good morning, depending on your time zone. Welcome to Sabancı Holding's second quarter earnings results webcast. I have our CEO, Cenk Alper, and our CFO, Orhun Kösten with me. I would like to hand over to Cenk Alper for opening remarks. Thank you.
Thank you, Kerem. Thank you to all participants. Good afternoon, good morning. Yeah, I am proud to say that, you know, our group has performed relatively well in the first half of the year, and executed our strategy year-to-date, despite all the volatility. As you know, geopolitics remains unpredictable in the region. The world's major economies are progressing in line with overall expectations, with inflation continuing to moderate. On the other hand, Turkey's fight against inflation prevails in a strict manner after adopting orthodox economic policies. What remains unchanged is that we continue to invest and stick to our strategic initiatives at a sustained pace, with an aim to accelerate value creation and increase shareholder return.
As you may all already heard, DxBV, our digital group company, fully owned subsidiary of Sabancı Holding, that is focusing on business models based on next generation technologies, acquired 65% of Bulutistan, a cloud company, one of Turkey's market leaders in cloud technologies, with a valuation of, with a value of $39 million. With this transaction, actually, our effective share in Bulutistan reached 75.5%, because we had 10.5% shares in Sabancı Ventures. This acquisition has strengthened our portfolio with another market-leading business with attractive long-term growth prospects. Probably you heard that, Bulutistan is one of the top candidates of unicorns or Turcorns, according to Turkish, you know, Ministry of Industry.
With these changes we made in Sabancı Holding's organization at the beginning of the second quarter, you will remember, we have implemented a more focused growth strategy in the areas of Material Technologies and Mobility S olutions, so we have separated, demolished the industry group, and now we have two focused groups, Material Technologies and Mobility Solutions. With our companies, which are the best examples of sustainability and digitalization in these two areas, we are taking concrete steps to achieve our strategic strategy of growth in new economy. We have actually yesterday morning announced the acquisition of Mannok. Çimsa signed an agreement to acquire 95% of Irish Mannok at an enterprise value of EUR 330 million. Actually, Mannok has more than 50 years of experience in the European market.
Mannok is one of the companies with the widest product range in building materials in the U.K., from cement-based products to insulation materials and recycled plastic packages. You know, this investment really represents a new milestone in our Material Technologies business, with its global outreach, product range, and sustainability focus, while also aligning with our midterm roadmap to increase share of EBITDA in combined revenues, and also accelerate the redeployment of the capital toward companies with higher growth rates. As you may also recall, Çimsa signed a loan agreement with EBRD for a total amount of 25 million EUR, and became the first cement company in Turkey to receive such financing from the EBRD. Çimsa, I guess, is an example of our commitment to pioneer sustainability in the industries in which we operate.
It is also worth mentioning, Çimsa completed the expansion of its calcium aluminate capacity in the first quarter of this year, and became the world's third-largest capacity in calcium aluminate cement. In climate technologies, our energy generation company, Enerjisa Üretim, increased the installed capacity of its wind farm by more than 20 MW in the second quarter, bringing the total installed capacity of its plant, plants to 3.8 GW. Upon completion of the ongoing investments, as you recall, Enerjisa Üretim will solidify its leading position in Turkish private sector by reaching an installed capacity of approximately 5 GW, with a 60% share of renewables by 2026. So, and this capacity expansion is through organic growth, but also for inorganic, you know, acquisitions.
In the United States, on the other hand, our 272-MW Cutlass II solar power plant was completed in the second quarter, and commissioned at a full capacity ahead of its schedule. The financing of the $184 million of tax equity for this plant was completed, and existing construction loan facilities were successfully converted into long-term project financing. We also secured the funding for our second solar project in the United States, so-called Oriana, that will have 232-MW power generation and 60-MW storage capacity. Oriana is still under construction, approximately 20% of the construction completed, but hopefully by the time we report to you in the first half of next year, we will be talking about at least 500 MW of operational capacity in the United States.
So within the third year, actually, we have two completed acquisitions, and we, at full speed, we are building capacity in United States. The financial results show that our performance is being challenged by the prevailing macroeconomic environment. I guess this is a transition period that results in a slower economic growth and significant disparity between inflation and the level of exchange rates. You know, inflation, devaluation difference. This environment not only deteriorates pricing flexibility, especially for export companies, but also the reported negative impacts amplifies further under the inflation accounting. We have conducted a thorough review and implementing measures to turn around the financial performance in the second half of the year.
As you can follow quarter- by- quarter, actually, our second quarter performance is better than the first quarters, and I am confident that with the capabilities of my teams to weather through the challenging periods, with a robust balance sheet, moderate leverage, and substantial liquidity, we have the resources to respond to market developments in a disciplined manner. Orhun and Kerem will provide you details on financial performance in the following slides. Regarding sustainability, I am proud to share that in June, we have received an Outstanding Achievement Award in sustainability from the European Foundation for Quality Management, along with a six-star, you know, award for the holding company. I can proudly say that this is first in kind, so we are the only holding company receiving an EFQM award.
A testament to how well we integrate sustainability into our decision-making processes and actions. As you may know, there have been many developments on the circular economy front in recent years, especially in EU. At Sabancı Group, circular economy is one of the key pillars of our Nature Framework for each group company, based on their specific stage of circularity maturity. In the first half of the year, we have defined the key milestones and targets related to circular economy for our portfolio base, on the maturity of each group company. We have set targets and milestones for six Sabancı Group companies, and our aim is to extend this to all group companies in the long run.
On the other hand, we have also launched a Sustainability Academy with a series of events under the name Business for Sustainability, Sustainability for Business. I believe that the success of the sustainability transformation is very much dependent on the sustainable knowledge and skills of our leaders throughout the organization. We have recently published our sustainability report this week, and there are very important outputs I would like to share with you on the next page. We managed to reduce our emissions by 20% and our water consumption by 24% in 2023, compared to 2021. So if you recall our, you know, midterm goals of 2030, 42%, actually, we are almost on the halfway to reach our 2030 targets for emissions. At Sabancı Holding, we utilize 100% renewable energy.
This rate is 54% across our group companies. Last year, it was 27%, so all the investments are in line with our renewable energy strategy. This means we doubled the rate of renewable electricity use last year. In addition to our environmental performance, we have made notable advancements in the social arena. We maintained our ratio of women managers at 41% last year, exceeding European Union standards. I remember it's 35%. I hope that we have achieved, we can achieve a 50% female manager representation by 2030 at latest. Furthermore, our inclusion programs reached over 1.8 million people. Finally, I would like to address our contributions to sustainable economy.
By 2023 year- end, we realized 24% of our $5 billion commitments to SDG-related investments and expenditures, which we aim to reach by 2027. As a group, we expanded our portfolio of sustainable products and services to TRY 1.1 billion this year, marking a 23% increase compared to previous year. Akbank exceeded its sustainable finance pledge to TRY 200 billion in 2023, with TRY 226 billion, and raised sustainable finance pledges to TRY 800 billion by 2023. Now, I will hand over to Orhun for a deeper dive into our financials.
Thank you, Cenk. Good morning, good afternoon, everyone. Welcome to our second quarter results webcast. Before I get into the details of the financial performance for Sabancı Group, I would like to highlight the backdrop through which we are operating in general. As you see on the top left graph on page six, after a rebound from COVID in 2021, and then especially flowing through the impact of Russia's invasion of Ukraine in 2022, the commodity and energy prices have been normalized throughout 2023 and 2024. In the first half of this year at least, we see a more normal environment. So there is relatively little relief in terms of bigger differences in energy and commodity prices.
On the other hand, if you look at the, if you consider the, labor cost inflation, it's obviously year-on-year quite high, including the minimum wage increase, which is around 100% between the first half of this year and first half of 2023. These are the macro conditions, of course, given the, disinflation program that's, been executed in Turkey. We would also need to consider the impact on the overall economic growth. Although the first quarter, the growth was 5.7, we have not seen the second and third quarter yet, but obviously, there has to be some slowdown, and all of these results, not only us, but in the general context of the Turkish companies, should be viewed in that context.
As far as we started reporting in inflation accounting, also including inflation accounting, that suggests just to reiterate, the numbers you see for 2023 are indexed by about 1.72x in first half of 2024. Which means, in order to earn the same TRY 100 that we earned in 100 in first half of 2023, now we need to earn TRY 172 . And moreover, given this transition period with this disinflation program, as you see again, the basket devaluation is considerably lagging behind the inflation.
That means some of the businesses, like Kordsa or our international businesses, like, you know, Çimsa's international arm or even Sabancı Renewables, that dollar-based or FX-based businesses need to grow, give or take, at least 25% on FX basis to catch up with the inflation versus or the reported inflation inflation figures for 2023. So therefore, given how the Turkish economy is moving, and I'm sure given how the rest of the global economy is doing, reporting under inflation accounting obviously presents these, you know, mechanical adjustments. Moreover, in the first half of this year, obviously, the interest rates are quite high versus the first half of last year.
Policy rate-wise, at the end of first quarter last year, 2023, the policy rate was eight and a half, which was subsequently increased to fifteen at the end of the second quarter, and this year is fifty. The overall interest rates, I think it's fair to say, has moved from 20-ish levels to high forty and fifty-ish levels in the first half of 2024. That obviously has an impact on the bottom line of the Turkish companies in general. This is for you, a general backdrop of the operating environment. If you come to our results, that's on page seven. Obviously, we show here the combined revenue, EBITDA and net income performance.
As you see, the combined revenue was up by 8%, and EBITDA was down by 41%, and the consolidated net income has turned from a profit to a loss of TRY 7.6 billion . Now, in order to interpret these, we need to first dissect certain parts of this. Of course, the biggest part is the bank, the largest asset that we consolidate. And as you know, given the balance sheet of the financial institutions, when they report under inflationary environment, obviously there are monetary losses involved that impacts the performance or the profit performance of these businesses. That's not, I 'm not referring to Akbank, I'm obviously referring to the whole, you know, banking sector as well.
So in this environment, the, you know, net income margin generation is challenging, obviously, and the credit growth is also challenging given the regulatory requirements at this point in time. Having said that, we're happy with the fundamentals of how Akbank is performing. That means it has a quite strong, you know, capital adequacy. It's growing, continues to grow its customer base. I think since 2021, we must have exceeded 5 million new customers acquisition. And then obviously, those acquisitions come digitally, which enables us to grow our cross-sell efforts. That actually results in better, you know, commission income.
Having said that, all those fundamentals, obviously, given this macro backdrop, does not necessarily result in, you know, better bottom line, but at least we know we are very well positioned to take off once the condition is normalized. And of course, from a holding company standpoint, as you know, the banks do not report under the inflationary environment, therefore, their dividends expectations should be based on non-inflationary results, which I'm sure you must be following, separately. So it's very different than what you see here. Another important point to mention is the impact of the holding company or the holding structure. Now, as you know, Sabancı Holding doesn't carry any debt. We don't have any debt in our balance sheet, and our natural position is a monetary loss, between our investments compared to our, you know, equity.
Moreover, we hold cash that's 166% higher than what we held the same period of last year in nominal basis, and 55% higher in real terms. So that also, available cash, unfortunately, weighs on the bottom line of the holding entity. So therefore, when you look at the right-hand side of this page and look at the non-bank net profit performance, about 20% of debt or about 2 billion of that swing, is attributable to how the holding company is doing, year-on-year, only from its, you know, monetary position basis. So these are the two, I think, important big items that we need to identify.
Other than that, if you look at the non-bank business at the end of the first half, we see about 160 points margin contraction. That, in our opinion, still, you know, looks reasonably well, given this macro backdrop, although, of course, it's a contraction and not an expansion of margins. And when in comparison to last year, I have carefully selected to talk about the first half, rather on a quarter and quarter basis. Because if you remember last year, we had this massive earthquake in the first quarter and a big rebound in the second quarter, which can make like-for-like comparison a little bit difficult for some of our businesses. So therefore, I think operationally, we see about 160 basis points contraction.
Now, as you know, the biggest contributors to our operating performance outside of the bank, of course, are the Energy segment. And in the Energy segment, you remember when we had the first quarter call, we said that the electricity prices was low, which was impacting the performance of Enerjisa Üretim for that period in comparison to last year, which was the case in the second quarter as well. So much so that the natural gas generation has been less, and these were purposefully put to maintenance in the second quarter of the year compared to last year. So the contribution of natural gas was very, very low.
In the second half of the year, though, I think a few things are going to be different, and I'm sure you must be following as well. One, obviously, the price cap has increased in the periods, and we're looking at constant natural gas prices, which obviously gives us more room to grow the profit bases, asset-based profits operationally. We had a mild winter, but I'm sure you must be experiencing yourselves as well. We have a quite warm summer that suggests a better demand profile in the second half, basically. Altogether should lead us, you know, enable us to deliver a higher dollar-based EBITDA from our generation, asset-based EBITDA from our generation business, compared to last year, when you look at 2024 as a whole.
If you listen to the first quarter results, you would know that a general guideline is we should be able to do something close to $500 million. What will still be a challenge, though, compared to last year, is the trading income, because the trading income would be at best one third of what it was last year. Now, that's a matter of less volatility, and we wouldn't be in a position to increase the risk going forward, to improve the EBITDA contribution. That's a risk and return basis model we're running. For the rest of the year, that piece is expected to underperform compared to last year. But as far as the EBITDA, asset base EBITDA performance is concerned, we expect to be better than last year, on year eight.
The second important piece is Enerjisa Enerji, and I think that's the company is in a very good position because we have been able to fulfill a lot of the CapEx requirements in the past few years, where the inflation was high and the interest rates were low. At this point in time this year, the start of the year was slow, and it's quite normal because the CapEx plan is going to accelerate in the second half of the year. So we see no real reason to be cautious about the underlying net income performance of the company for the year.
And of course, if and when going forward, the interest rates or policy rate and then the interest rates come down, obviously, that's going to be quite positive for Enerjisa Enerji's business model. Having said that, I have to also tell again, sometimes this does not fit into the fiscal year, you know, given the regulatory choices that impacts the industry, that may result in higher working capital requirements year- on- year. So that's the caution we need to look at, even though in general, we have no reason to be reserved for Enerjisa Enerji business.
Of course, as Cenk was explaining, at Cutlass, our renewable, solar, facility has started producing in the U.S., which is not in last year, it's not in the first half to a great extent, but which will start contributing to our EBITDA in the second half of the year. So the Energy segment contribution, we expect to be much better than the first half with these conditions. Now, for the rest of the portfolio, I'm not going to go in detail because Kerem is going to walk you through in detail shortly. Having said that, we are cautious, of course, given the macroeconomic backdrop, but the first half or more, much more of our businesses was relatively favorable.
We believe that due to the fact that most of our portfolio are B2B, any impact in the slowdown in the economy, of course we will feel, but we will feel with a lag in comparison to any B2C businesses. And I have to tell you, in the first half, we already see, you know, such impact in how the top line of retail businesses are doing. For example, CarrefourSA is a good example. And the top- line growth has been becoming obviously incrementally difficult in these macro conditions. And finally, net income. I've already referred you to consider the increase in the interest rates in comparison of these two periods.
Furthermore, I will, of course, ask you to recall that between this period, this first six months and the first six months of 2023, the corporate tax rates have increased as well, from 25% to 30%, of course, for financial institutions, and then 20%- 25% for corporates. So therefore, there has also been an effective tax increase, which would obviously impact our bottom line. And I'm not referring to deferred taxes, I'm referring to the corporate tax income base. So these are the factors that has impacted the first half performance. Again, we're reasonably confident in the health of our businesses, which we believe are very well positioned to capitalize on any, you know, growth opportunity in the market.
The bigger contribution, contributors to our performance, we expect obviously better performance in the second half of the year. Now, if you turn to the next page, on page 8 . If you look at the return on equity, obviously you have a slowing down, you see a slowing down trend. First of all, a majority is also again attribute to the banking business in general. But excluding that, of course, we also see a slowdown in the return on equity metrics. I would caution you to look at 2022, was a year when we saw, you know, record high energy prices that's due to Russia's invasion of Ukraine, which obviously seriously impacted our non-bank return profile as well.
So if you look at the chart in the middle, that presents our return on equity profile without one-offs. I think we're looking at a much realistic picture. Although we still see some contraction, I think on the non-bank side, at least we're happy with the bandwidth of the return profile we're looking at now. And when we look at the slowing trend between 2024 and 2023, again, I would caution you to think about the interest rates and the income tax increases in comparison to the previous period. Our net debt to EBITDA is 1.3x at the end of first half. It's well below our operational, you know, target leverage of 2x , so we're quite comfortable with that.
If you look on the next page to our net cash position, as I was saying, we're at 12%, with TRY 2 billion down, TRY 2.4 billion down versus the end of the first quarter, but nevertheless, seriously higher than the same period of last year. Obviously, what we should expect is to, you know, reallocate these moneys into investments that's in the pipeline going forward. You have, you have heard some of them, as we explained, and obviously we hope we would continue allocating that to further investments, going forward. Because this money, as I'm, I'll try to explain, does end in a bottom line challenge for us, the more we hold on to that. It's a good problem to have, but nevertheless, something to consider.
Our operating cash flow, compared to the first quarter, of course, rebounded, which was something that we were expecting quite strongly. Nevertheless, again, we need to have a caution here. Usually, in Enerjisa Enerji, on the retail business, depending on the receivables from the market, there may be working capital requirements shifting from one quarter to another. Other than that, there is nothing significant we're looking at. And that's we're happy because, as you see, we continue our investment scheme, and our non-bank CapEx to sales ratio stands now at 11.3%. If you move on to how the NAV and the stock performance in general is doing, NAV has been up by 23% in dollar terms since the end of the year. We have seen a, you know, contraction in the discounts.
Of course, there is more room to grow, but I think this is a healthy catch-up we're playing because this NAV, as you see in the rest of this presentation, I think also presented in the appendix, now shows some of our unlisted assets like Enerjisa Üretim, with relatively higher valuations than their book value, and hence impacts the discount. But nevertheless, we expect to continue closing down the gap. In the period between the year-end and the end of the first half, you see the bigger contribution to NAV has been from the bank and the financial services, basically. However, if you see in the next page, still, even with that, compared to a few years back, we see a much more balanced portfolio composition for our NAV, as you see on page 12.
Where bank accounts for 41%, and energy and climate technologies businesses account for 32% on the NAV share. And there is much going forward that we would expect to do, both on the material and mobilities, Material Technologies and Mobility Solutions side, and digital technology side. Now, with this, I will turn over to Kerem to walk us through the details of the business segments. Kerem?
Thank you, Orhun. Let's first start with the bank. And before I start, please note that the banking figures are based on IFRS financials, as the banks are exempt from inflation accounting for this year. Akbank's robust proficiency in flexible balance sheet management, including quick adaptation in navigating the tight regulatory environment, as well as sustained excellence in fee performance, continue to be supportive factors for its profitability. Regardless of the sector-wide challenges, especially in margin evolution, Akbank's strong commitment to enhance recurring revenues and to generate sustainable, high profitability, continue to be the driving force behind the success. Akbank's strong momentum in expanding the customer footprint persists.
The bank added 800,000 new customers, reaching 14 million in the total active customer space, with cumulative increase of 5.4 million since the end of 2021, solidifying its recurring revenues and the footprint for long-term success in evolving markets. Exceptional increase in the active customer base has also resulted in the fee-to-OPEX ratio to excel by 23 percentage points in just six quarters. In addition to this, the bank keeps its leading position in capital with a robust 16% Capital Adequacy Ratio, which will continue to provide the bank significant competitive advantage going forward. Moving on to our largest non-bank segments, the energy. In generation, as Orhun detailed, revenues dropped by 27% year- on- year on lower spot electricity prices and generation volumes.
The drop in EBITDA compared to last year is related to a lower contribution from natural gas, due to the deterioration in spot spreads because of lower market prices and generation, as well as decline in renewable generation due to weaker wind regime, wind capacity, and optimization at hydro reservoir levels. A further negative contribution to EBITDA came from asset-light businesses. Enerjisa Commodities trading activity declined as fewer positions were traded, due to lack of clear price signals and liquidity in the markets. We expect generation's profitability to recover in the second half of the year, given the increase in demand in the summer months and increase in ceiling prices. Separately, as stated, our first solar investment in the U.S., Cutlass II, was completed and commissioned by mid-May and started to generate EBITDA.
The expected annual EBITDA contribution from Cutlass II is likely to reach $15 million per annum. Related to Enerjisa Enerji, operational earnings and distribution business increased by almost 17% year-on-year, mostly driven by higher inflation income and CapEx reimbursements, as well as the recovery of efficiency and quality- related earnings. Customer Solutions segment's operational earnings has significantly improved compared to last year, mostly driven by doubling our solar PV projects. Yet, Retail segment operational performance declined as expected by almost 47% year-on-year, due to lower sourcing costs, both in the regulated and liberalized segments. In the first half, investments stood at TRY 4 billion, which is matching the seasonal CapEx pattern of the distribution business.
As a result, underlying net income declined to TRY 2 billion due to lower earnings contribution from the retail activities and increase in financial expenses on higher debt and interest rates. In Mobility Solutions segment, revenues down by 2% year-on-year in Q2, despite the positive impact of increasing volumes in bus and strong demand in tire original equipment business, revenues were negatively affected by weak pricing flexibility. Despite cost efficiency, segments EBITDA declined by 47% year-on-year due to lower top- line growth and the negative impact of the sales mix, specifically driven by tire business. Net income was adversely affected by lower operating profits, higher financial expenses, monetary losses, and higher deferred tax related to inflation accounting.
Note that following the restructuring of the industrial segments into Mobility Solutions and Material Technologies in mid-April, Brisa, Temsa, the bus company, and Temsa retail company, grouped under Mobility Solutions and will be reported under this segment starting from second quarter of this year. In Materials Technology segment, top line dropped by 12% year-on-year due to lower demand compared to last year, due to high base. In addition to lack of pricing flexibility in the domestic cement market, price competition in export markets for both tire reinforcement and cement businesses have also affected the segment's top- line growth. Aside from inflationary pressures in local markets, mainly affecting fixed costs, adverse impact of disparity between high inflation and TRY depreciation resulted in deterioration in EBITDA margin. Segment's net income dropped by 37% year-on-year, compared mainly on lower operational performance.
Note that following the restructuring of the industrial segment into Mobility and Material Technologies in mid-April, Akçansa, Çimsa, and Kordsa, grouped under Material Technologies, and will be reported under this segment starting from second quarter of this year. Financial Services segment, inflation-adjusted top line declined by 25% year-on-year, driven mainly by non-life business. The life business EBITDA increased by 166%, driven by growth in pension business, strong contribution from high margin credit rates, and standalone life products, despite the negative impact of higher personnel expenses. Net income was negatively affected by a high level of monetary assets and net cash position. It's important to note that our life company became the market leader and ranked as number one in the Turkish market in terms of private pension assets under management in January 2024, and still keeping that position.
The company also maintained its number one position in terms of gross written premiums in life and personal accident. In the non-life business, on the other hand, revenues dropped by 17% year-on-year. The decline in top line is a part of the strategy to improve the capital adequacy ratio by focusing on high- margin segments in its underwriting operations. EBITDA down by 46% year-on-year, due to lower premium generation on lower financial income. The negative impact on inflation accounting, inflation-adjusted net profit, is related to the nature of the insurance business, which is highly dependent on monetary assets. For the retail segment, revenues increased by 10% year-on-year, driven by the contribution from electronic retail business, thanks to its omni-channel strategy, wide product range, new customers, and value-added services.
E-commerce sales performance also remained solid, as gross merchandise value was up by 2% in real terms in the first six months of the year. EBITDA declined by 37% compared to last year, due to increasing competition in the retail market and inflationary pressures in operating expenses. Net income was negatively affected by high interest rates. Finally, on Retail segment, top line registered 3% real growth compared to last year, thanks to positive contribution from alternative channels. EBITDA increased by 34% year-on-year, mainly driven by cost optimization. The negative impact of high financial expenses continued to pressure the bottom line of the segments. This concludes our presentation. I now would like to open the floor for Q&A. Please type your Q&A in the Q&A section of the Zoom. Thank you. Okay, we have the first question, from. Thanks for the presentation.
Considering the weakening in the profitability of the Energy Retail in first half 2024, and still insufficient foreign investor interest in Turkish equities, do you see any risk for the delay of Energy Retail's IPO?
Thank you. Thank you for the question. I think, in order to be able to talk about the delay, we need to talk about the specific dates. And of course, as we've discussed earlier, this is quite a large and important asset, which we believe, will lead to a very strong valuation, which we have been able to see in 2023, with independent valuation as well. We would very much like to ensure that, we can do it at the best time possible, and that together with our, you know, joint venture, partners. Now, that means, you know, if you take, these numbers and, you know, you know, potential size of, such an offer, you're right.
We would like to make sure that not only the Turkish individual investors contribute to this, but of course, to make the demand as strong as possible, we would very much like to have the foreign investors as well. So, we're normally not delaying anything, as I said, because we're not necessarily working on a function of a fixed date basis. We want to make sure that we get ready as much as possible so that our time to market is lowest when the conditions are at their best.
Thank you, Orhun. The second question is. Thank you for the presentation. I have a few questions on generation business and expected dividend flows. How much generation volume do you expect in your $500 million EBITDA target for Energy Retail? What is the break-even price that could prompt you to operate natural gas power plants more effectively? Will your non-bank portfolio paying dividends based on inflation- adjusted numbers in 2025? If not, what is the current running net income in the energy business, or can you please provide the pre-inflation numbers separately?
T hank you. I think I have to tell you on top of my head, I don't have an answer for your first or second questions, but we'd be happy to come back to you with specific answers. For the pricing, though, I think, you know, in the longer term, if you look at the Turkish market, I think given how we would expect the Turkish economy to grow on the normal terms, we would expect the prices to be at $80-ish levels, more or less. At the first half of the year, the prices were at $60-ish levels, and with the cap increases or etc. , we expect them to move to higher sixties, close to $70 levels.
So therefore, I think in the second half of the year, there is scope, of course, for a better, you know, performance compared to the first half. Moving on to your last question, and yes, of course, we expect our non-bank portfolio to pay dividends. You know, that we don't have any, let's say, any thought that there will be any changes to our dividend performance on, you know, compared to our previous periods. I can't remember how many quarters that we have been paying dividends, but rest assured, we'll continue paying dividends this quarter as well. But no, I'm not sure if we would be in a position to provide you with, let's say, non-inflation- adjusted numbers. Again, as I said, for the two specific numbers, my team can come back to you because I don't have any numbers on top of my head with that detail yet today.
Thank you, Orhun. The next question: Thank you for the presentation. Could you repeat whether there will be any changes in the company's report under Material and Mobility Solutions?
Currently, Kordsa, Akçansa, and Çimsa are under this group, and remains like this until we have an acquisition or not. But I think the acquisition of Mannok is a very good example of this. So Mannok requires the competencies of Kordsa and Çimsa at the same time, because there is a wide variety of products like insulation and packaging, where our competencies at Kordsa are very valuable. On the other hand, you know, cement, concrete, precast products are in the scope of Çimsa. So I think going forward, actually, these three companies will remain under this umbrella, and synergies between companies will increase further.
Thank you, Cenk. The other question is, with your higher holdco cash and deep discounts, will you revisit buybacks?
Thank you. Well, obviously, look, we, our program is in theory, is not completed yet. A little bit remains. I think we've completed around 86%, if I'm not mistaken. However, obviously, when we started back in, the last quarter of 2021 , we have to do a lot of heavy lifting, given at the time, the level of discount and the NAV of the business. I believe today, obviously, the portfolio does more than the buyback program itself in terms of, you know, minimizing the discount. But going forward from time to time, as I said, it's a tool, and we can always, you know, use it if, we find it, you know, feasible and reasonable to do so.
Maybe I can add on that, that we have a sufficient pipeline, as you have seen from the recent acquisitions, for further growth, either organically or inorganically. So in that respect, you know, probably, we would consume the cash or our capacity of balance sheet for growth.
Thank you, Cenk. Another question, your company is paying dividends based on your official accounting numbers or based on pre-inflation earnings?
E xcept for financial services, including the bank, you know, the bank and the insurance companies, all of the companies are liable to pay based on inflation- accounted figures, basically. But for the bank and the insurance companies, based on their individual, let's say, regulations, they still report and liable based on their non-inflation- accounted numbers. So therefore, for example, if you've noticed, last year, this year in 2024 , our payout ratio from Sabancı Holding has jumped to 40% because the bank, the bank actually paid normally with its pre-inflation numbers, and then we calculate our payout based on our inflation- accounted numbers. And probably the same you will need to probably you will see the same pattern in 2025 as well.
Thank you, Orhun. Another question: Any progress on the IPO timeline of energy business?
I think yes and no, as I said, because you would know better. This really is not a matter of fixing a date and, you know, doing that. It's a matter of getting ready and be able to do it at the most convenient time, at the earliest possible time slot. So, therefore, it's actually the same. So, you know, you could say there is a similar timeline in our mind, and it does not necessarily change, and it's not about a specific date, but making sure that we get ready at the most opportunistic time.
Thank you. Another question: Could you please confirm your EBITDA guidance for 2024 as $500 million? This figure implies a very significant jump in the profitability in second half of 2024.
Yes. As I said, you know, we would expect the total EBITDA, obviously, to be over $500 million this year. You know, pending any changes that we don't know about in the rest of the year, but that's the outlook we see today. And I was also referring to, of course, our generation or asset-based EBITDA would be close to $500 million. That's the guidance, that's the rule of thumb. And over a while, there will be some increment coming from trading contribution, but the trading contribution, trading profits would be about one third of what they are last year. But in total, they will be, yes, at and probably above $500 million.
If you have any further questions, please type to the Q&A section of the Zoom. Thank you. If you have any further questions, please type in the Q&A section of Zoom. Another question is: Any updates on Carrefour, CarrefourSA ?
Well, I mean, obviously, nothing important, otherwise we would have already announced it publicly. Having said that, I believe two things are happening. One, the performance of the business is not bad. I'm sure you must be following on a year-on-year basis. Yes, the bottom line is not great. Having said that, the operating performance is much better. And then, there is now. We don't see a risk of, you know, technical bankruptcy. And that position, actually, and given what the business is doing in the market, we believe further improves its potential appeal and value. So therefore, nothing to say today, but yes, our position has not changed. The retail business is a great business, does not fit, you know, 100% in our strategic portfolio, basically.
Thank you, Orhun. It seems we don't have any further questions. I would like to leave the floor for our CEO, Cenk Alper, for closing remarks.
Yeah. Thank you, everyone, for all the questions. As we progress through the latter half of 2024 , we will maintain our focus on executing the strategic objectives we are relentlessly working on. I know many of you have already received save the dates for our Capital Markets Day on October 9th. I look forward to sharing more about our midterm strategic plan and guidance with you on that day. All the best, and goodbye.