Ladies and gentlemen, thank you for standing by. I'm Konstantinos, your Chorus Call operator. Welcome, and thank you for joining the Tüpraş conference call and live webcast to present and discuss the first quarter 2025 financial results. At this time, I would like to turn the conference over to Mr. Doğan Korkmaz, CFO, and Mr. Levent Bayar, Investor Relations Executive Director. Mr. Bayar, you may now proceed.
Thank you. Hi everyone. Good evening to all from Tüpraş headquarters in Istanbul, and welcome to our teleconference. I'm Levent Bayar, Enterprise Risk and Investor Relations Executive Director. I'm here with Doğan Korkmaz, CFO, and team members from Tüpraş Investor Relations and Reporting Departments. Over the next hour, we will first go over our operational and financial results for the first quarter of 2025. Then, we will continue with the Q&A session. I'll draw your attention to our cautionary statement. During today's presentation, we will make forward-looking statements that refer to our estimates, plans, and expectations. Actual results and outcomes could differ materially. Please refer to our financial reports and material disclosures for more details. These documents are available on our website. In the next two slides, we will provide you with a brief summary of the key highlights regarding the first quarter of 2025.
We will go into detail for each subject on the following slides. Now, moving on to Tüpraş highlights in detail for the first quarter of 2025. Starting with the chart on the left, with major maintenance activities completed in 2023 and 2024, our wide product yield climbed up to 84.4% in the first quarter of 2025, with the improvements we have achieved. With our units now fully operational, we are well-positioned to capture any upside in the crack margin environment as we move forward to the season. Moving to the middle chart, this shows the healthy spread between our operating cost per barrel and Tüpraş crack margin. As expected, crack margins are normalizing after the record highs of 2022 and 2023, but when compared against pre-COVID, our crack margin performance is still strong, supported by solid demand and still somewhat a tight market despite the broader industrial slowdown globally.
Even with normalization underway, the spread between margins and operating costs remains healthy, a clear reflection of our improved operational efficiency over the past few years. Let's now turn our focus to the graph situated on the right, which provides us with a visual representation of Tüpraş's FX and balance sheet management and how the FX losses are offset by inventory gains and net interest income. Our strong net cash position supported our P&L in recording net interest income gains for over eight quarters. Due to Turkish lira's rapid and end-of-month depreciation against the US dollar at around 2.5 liras in the first quarter, we booked an FX loss, which is mitigated by the inventory gain as a result of natural hedge from FX-based inventory. We will keep on recovering this loss at the EBITDA level also in the second quarter with the help of our FX-based pricing.
As you know, we covered this section in two main components: developments in the global oil markets and developments in the Turkish market. Let's start with the global oil market. Both our market conditions persisted throughout the first quarter due to sanctions on Iran, Venezuela, and Russia. In response, OPEC Plus announced a production increase of 138,000 barrels per day in April and 411,000 barrels per day in May. With these additions, OPEC Plus production is expected to reach 42.1 million barrels per day, the highest level since 2023. This increase will likely ease supply concerns, particularly as it coincides with the continued strong non-OPEC production. On the product side, by the end of the first quarter, we are already seeing inventory levels dropping below both last year's levels and the five-year average, a positive indicator for market balance. Now, taking a look at the bottom row, Turkish market.
Towards the end of the first quarter, the Turkish lira experienced a sharp depreciation, weakening by around 7% year-to-date. CBRT interrupted its rate-cutting cycle and instead raised the policy rate by around 350 basis points to 46% in its March MPC. On the demand side, Turkish demand for oil products improved in the first two months of 2025. There's a 5% increase in overall demand compared to the same period in the previous years. Notably, the appetite for gasoline continued, showing a significant rise at 18.5%. Let's take a look at the cracks for the first quarter of 2025 in comparison to last year's and five-year average on this page. In the first quarter, diesel cracks averaged at $17.3 per barrel, higher quarter-on-quarter due to the increased seasonal heating demand during the winter period. Year-on-year diesel cracks are lower due to the high base of the last year.
The ongoing Red Sea disruption has had a more limited impact this year compared to last year's high levels. Overall, diesel cracks are now in line with a normalized environment. Jet fuel cracks averaged at $14.5 per barrel in the first quarter, lower year-on-year due to the high base. Colder winter conditions were an additional factor, leading several airlines cutting flights on transatlantic routes. However, margins were slightly higher quarter-on-quarter due to the limited supply as refiners prioritized diesel production. Gasoline cracks averaged at $12.5 per barrel in the first quarter, lower year-on-year due to the high inventory levels in the beginning of the quarter. Refinery maintenances supported gasoline cracks when compared against the previous quarter. High sulfur fuel oil cracks averaged around minus $7.7 per barrel in the first quarter, up by $8.5 per barrel on a year-on-year basis.
High sulfur fuel oil cracks were mainly supported by the increased demand of complex refineries and tighter supply. Moving over to the crude price differentials. Differentials narrowed in the first quarter, mainly due to the additional sanctions announced in January. Limited supply concerns caused elevated crude prices. Following the OPEC Plus production increase decision in April and May, we may see a slight widening in the differentials. The picture should become clearer following OPEC Plus meetings scheduled for May 5th. Despite multiple disruptions from Red Sea closures to sanctions and pipeline outages, our sourcing flexibility proved to be highly resilient. We successfully diversified our crude intake by sourcing from the Americas, demonstrating our ability to maintain stable operations and sustain our refinery output despite the evolving geopolitical and economical conditions. Now, starting with the production volume, let's check Tüpraş operations.
Our production in the first quarter of 2025 was 5.9 million tons, parallel year-on-year, in line with the low season. With the completion of major maintenances in 2023 and 2024, we will be operationally up and running to capture any upside risk in the refining environment. For the crude distillation, we managed to achieve a capacity utilization rate of 74%, and the utilization rate for processing other feedstock stood at 9%. Our system-wide rate was 83% in the first quarter. Moving on to the sales. Let's start with the total product sales. Sales from production was in line with the previous year. This year, we chose not to import additional volumes given the lower trade premiums compared to 2024. In the first quarter, our domestic and international sales were respectively 4.6 million tons and 1.6 million tons, totaling to 6.4 million tons.
We observed a 16% increase in our total jet fuel sales, marking the highest level in the past six years. Our domestic sales are lower than last year by 9%. Our gasoline sales are up by 21% year-on-year, while domestic sales were down by 17%. Now, let's move to the electricity operations. This slide summarizes electricity production and sales activities of ENTEC and Tüpraş in the first quarter of 2025. In the first quarter of 2025, 48% of the electricity generated was from hydropower, 25% was from wind power, and the rest was CCGT and solar power. The EBITDA contribution of the sales from production of electricity decreased due to the weak hydrology in the first quarter. Of our 238 gigawatt-hours of zero-carbon electricity produced, around 40% was sold to the feed-in tariff, which is $73 per megawatt-hour. The rest was sold to spot market.
Now, let's move to the financials. Now, let's take a look at the P&L items in detail for the first quarter of 2025. Within the IS29 standards, all financials that are provided in this presentation and in our quarterly financial report are calculated with inflationary adjustments. Additionally, the financial figures for 2024's first quarter have been scaled up by a factor of 1.38 in accordance with March 2025 CPI in order to reflect the purchasing power of the current quarter. This adjustment is the main reason for year-on-year drop in figures in all lines. Our revenues came in at TRY 159 billion, equivalent to almost $4.2 billion in the first quarter, weakened mainly by crude oil price and crack margin drop. Cost of goods sold stood at TRY 145 billion, affected by narrow differentials. As a result, gross profit stood at TRY 13 billion.
Operational expenses were down by 21%, as are operational expenses rising less than inflation. Loss from other operations is affected by the FX loss from trade payables. In the first quarter, Turkish lira depreciated by approximately 7%, resulting in this loss, of which we will be recovering in the second quarter through the sales of inventories counterbalancing as natural hedge. Income loss from equity pickup was recorded at around minus TRY 49 million, mainly due to FX losses from Opet. In the first quarter of 2025, we recorded lower financial income of TRY 700 million, mainly due to the decreased net interest income. The monetary loss of TRY 2 billion was much lower than the previous quarter as the gap between inflation and interest rates closed. As a conclusion of this, we have recorded TRY 2.5 billion of profit before tax in the first quarter of 2025.
Deferred tax created the majority of the difference between the profit before tax and the net income. Below PBT, we have recorded around TRY 2 billion tax expense as the revelation of deferred tax creates a negative impact on the tax line item. As a result, we have recorded TRY 97 million in the net income in the first quarter. Now, for the EBITDA, our reported EBITDA materialized at TRY 9.6 billion. We recorded TRY 3.2 billion positive inventory effect. Our EBITDA CCS materialized at TRY 6.3 billion, and TRY 0.2 billion of this EBITDA was recorded from our electricity production company, ENTEC. Now, let us take a look at the profit before tax bridge. As you can see from the waterfall chart, the dominant negative impact comes from the weakening of crack margins due to the high base of the first quarter in the last year.
TRY 2.7 billion negative impact comes from narrow differentials compared to last year as well. With improved energy efficiency, we have recorded TRY 1.6 billion positive impact this year. Improved wide product yield with the completed maintenances and improved efficiency has led us to TRY 2.8 billion positive impact. Our lower net interest income decreased as a result of cash outflows and FX losses due to the sharp Turkish lira depreciation had a negative impact of TRY 1.6 billion. There is a TRY 5.7 billion positive impact coming from much lower monetary loss based on the decreased gap between inflation and interest rate. All in all, 2025 first quarter profit before tax is materialized at TRY 2.5 billion. Now, let's take a look at the financial highlights. Our net debt to EBITDA materialized at negative 0.5 times as of the end of the first quarter.
Cash and cash equivalents and financial liabilities at the end of the first quarter stood at TRY 47 billion and TRY 21.1 billion respectively. We ended the quarter with TRY 25.5 billion of net cash, preserving our strong cash position. Our working capital requirement stood at TRY 19.6 billion due to delayed trade receivables as the end of the first quarter with the Eid break, less factoring, and change in our supply mix. We believe the majority of these forces are transitionary and one-off. Now, looking at the maintenance calendar for 2025. Looking at the maintenance plan, we are on track with our maintenance schedule. The crude oil and vacuum maintenances in Batman have been postponed from the previous year, and one of them is already completed. The FCC revamp at Izmir refinery is still ongoing.
Overall, there are no major maintenance operations this year that would significantly impact our production capacity. On this slide, we have our unchanged expectations for 2025. Now, looking into the details, based on our operational performance in the first quarter and ongoing developments, we haven't changed the $5-$6 per barrel net refining margin guidance. Regarding production and sales figures, there is also no change in our expectations as well. We expect approximately 26 million tons of production and approximately 30 million tons of sales. We expect capacity utilization to be within a range of 90-95%. Our consolidated CAPEX target for 2025 is around $600 million. On this slide, we would like to sum up some key figures for the first quarter and compare them with our 2025 guidance.
The net refining margin was $4.1 per barrel, lower than our guidance reflecting the seasonal pattern of our business. Our quarterly capacity utilization rate was 82.8%, below our guidance range of 90-95%, again due to low season. Our quarterly production and sales reached respectively 5.9 million tons and 6.4 million tons. We have spent $83 million in the first quarter in CAPEX. Now, this slide concludes our presentation, and we can now proceed with the Q&A session. The first question comes from the line of Kishmaria Anna with UBS. Please go ahead. Good day. Thank you very much for taking my question. I have several. First, around the differentials. There were reports, and you confirmed with first quarter that you stopped Urals purchases early in the year, but now we saw media report that as Urals dropped below the price cap, you restarted the purchases.
Maybe you can comment on how you expect a differential to evolve in the second quarter and maybe later in the year? To the same topic around your trading volumes, as you mentioned, in the first quarter, there were lower volumes you traded on top of your production. Do you plan for this to change over the next quarters? Another comment around the working capital. You said that the majority of this build was a one-off. Can you comment on what percentage you would expect to be released already in the second quarter, or should we expect a more gradual release of this build? Thank you very much. Hi. Thank you for your question. This is Levent speaking. As to your first question, in the first quarter, the existing trades were brought in until February 27, as you know, when we processed all those cargoes in the first quarter.
Given the diplomatic nature of secondary sanctions since January 10, we have closely monitored U.S.-Russia relations and the related, obviously, positive political developments. We were also in constant communication with the relevant authorities. Meanwhile, the crude oil prices have come down and are currently below the price cap. At the same time, we did not have any term contracts with Russian-sourced crude or semi-products. Therefore, we are still very flexible in our purchases. Our refinery structure provides flexibility to process a wide range of APIs, which leads to a diversified range of supply sources. With the ability to source crude oil from various global regions, we can sustain our operations even if there is a requirement to shift our supply origins, as we did in the first quarter. We evaluated around 100 different grades for each and every month.
Obviously, the priority, as always, remains to ensure full compliance with all applicable regulations while maintaining the stability and efficiency of our operations. At the moment, we decide on a cargo-by-cargo basis, considering, obviously, the price, the valid regulation, and our needs at the time. I believe the ongoing differentials would be slightly better than what we have experienced in the first quarter, owing to different reasons, obviously, the mix, OPEC decisions, and as we get closer to the season, I guess there will be a bit of more stability in the supply side of things. Your second question in regards to the trade volumes, mind you, while we are trading, we are obviously supplying the domestic market with the additional products, but it does not mean that we are making the same profit, i.e., the cracks from those sales. Those are obviously transitionary benefits to the business.
While you're seeing the difference on the sales slide, it hasn't got a major impact on our profitability. Opportunistically, if we see an opportunity there, we would definitely keep on increasing our trade volumes, but we haven't seen that in the first quarter as we did last year. Your last question was on the working capital requirement. The Eid holiday at the end of the first quarter created rightful delays in our receivables due to those days falling into non-business days, which caused around TRY 6 billion of delay in our receivables, quite a technical issue, which has been collected in the following day after the period end. On top of that, obviously, having this much cash in hand, we are opportunistic in our factoring operations and in our current market.
You see time to time opportunities where you're having an arbitrage by increasing your factoring amount. In this instance, the difference on the factoring balance at the end of this period is TRY 2.4 billion, less than what we had seen in the comparable quarter of last year. That is TRY 6 billion for the holiday business days issue and TRY 2.5 billion on the top of that, which makes TRY 8.5 billion. The supply composition, the mix, the change in the supply in the first quarter caused us another TRY 4.5 billion. As I mentioned, we are expecting a different mix in the second quarter, which might help with increased payment terms. Most of these are technical and one-offs, and I believe our working capital requirement would go back to the levels that we are used to from previous periods. Thank you. Thank you.
The next question comes from the line of Dilara Giuseppe with Morgan Stanley. Please go ahead. Mr. Dilara, can you hear us? Hi. Am I as well? Yes, we can hear you. Sorry, some issues with the audio. Oh, okay. Thank you for the presentation and for taking our questions. We have some quick ones, if we may. Firstly, on margins and utilization rates, how are you seeing the environment in the second quarter? How is that seasonality developing? Secondly, for CAPEX distribution, what kind of level of investments should we expect for the second quarter? Let me take this one. As we have discussed during the call, margins have already started to show improvements even as of this week. In terms of utilization, we are reaching the high season. The utilization rates are going to be going up as usual.
Since there are no maintenances left, we are going to be operating at very high levels. The second question regarding the CAPEX distribution, we do not disclose quarterly distribution, but as discussed in the previous call, half of the CAPEX was for the refining investments, whereas one quarter was for ENTEC electricity business and one quarter was for tanker purchases, roughly. Okay. Cool. Maybe a quick follow-up. What's your difference in margins, profitability on the trading volumes that you're seeing now? What's the level of profitability for trading volumes? I mean, given the fact that it's a part of the existing business, we do not disclose separate margin of the trading activity. Okay. That's good. Thank you very much. Sure. The next question comes from the line of Kazif Ildar with HSBC. Please go ahead. Hi. Thank you very much.
Just a quick question about a middle chart on page three of the presentation where you show an evolution of the OPEX per barrel. Can you just clarify, please, whether this OPEX number is for refining business only and what it includes exactly? Does it include SG&A or other costs, or is it only refining? Thank you. Sure. This actually composes of one of the components of the net refining margin calculation, inclusive of energy costs, logistics, and then some staff and such, not different from the figures that we have disclosed previously. And it's refining only. Thank you. Sure. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you. Thank you for joining us this evening for the first quarter call of 2025.
Before we conclude, I'd like to share a few closing remarks. This quarter was shaped by a complex mix of macroeconomic and geopolitical developments. Ongoing global uncertainties, including trade dynamics and regional tensions, have continued to influence the overall macro environment. Prolonged disputes have fueled concerns around supply security, while volatile trade and trade dynamics further shaped sentiment across commodity markets. In the oil market, OPEC Plus's announcement of a production increase for April and May is expected to ease some of the supply-side limitations. Looking ahead, we expect a more balanced and healthy market environment supported by high-season demand dynamics. Crack margins gradually normalized, yet they remain above the pre-COVID era. We are already seeing signs of further increases as we get closer to the driving season.
On the operational side, our white-product yield reached its highest level since the first quarter of 2021, and we are entering the second quarter with strong operational momentum. From a financial strength standpoint, we continue to deliver resilient results supported by disciplined cash management, operational efficiency, and strategic flexibility. As we move into the high season, we remain well-positioned to capture margin opportunities. Today, we have another important announcement following the results. As you all know, we have been building a strong track record of timely and well-aligned investments since rolling out our strategic transition plan. Thanks to our high adaptability to the evolving energy landscape and the significant emission reductions we have already achieved, we are ready to meet emerging expectations around energy security as well as sustainability and decarbonization.
In this context, the feasibility changes in low-carbon alternative energy technologies and shifts in the expected life of conventional energy usage globally require a review and update to our strategic transformation plan, which was launched back in 2021. Accordingly, we are publishing our revised plan today as a public disclosure as well as on our website. We will be available for any comments or questions as usual. Looking ahead, we are well-prepared to benefit from the opportunities that lie ahead thanks to our existing operational excellence, prudent financial management, and revised plan, which is built on current realities and priorities of the energy space that will further enhance our operational footprint and performance. We appreciate your time and trust in our company. Thank you all for listening to us today and wish you a great day ahead.