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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. January 2014.

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Presentation on theme: "Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. January 2014."— Presentation transcript:

1 Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. January 2014

2 2 Contents I. Company & Operations3 Planned Investments18 Ownership Structure & Participation22 Ciner Group 25 V.Financial Structure28 VI.Evaluation of The Latest Financial Tables37 VII.Corporate Governance Rating43 Park Elektrik January 2014 Park Elektrik Madencilik

3 Park Elektrik3 I.Company & Operations 3 January 2014 Park Elektrik Madencilik

4 Park Elektrik4 Introduction Initially offered to public in 1997, Park Elektrik is the sole copper mining company on the ISE. The company currently operates two mines namely; a copper mine in Siirt and an asphaltite (a kind of hydrocarbon) mine in Sırnak. Making up 90% of total sales revenues, concentrated copper is the main product of the company. Park Elektriks end product is concentrated copper which involves around 20% copper content. Park Elektrik sells all of its concentrated copper production to international commodity brokers. Park Elektrik took over operational rights of copper mine in 2004 and commenced copper mining operations in late In mid 2009, following its merger with ISE-listed Group company Ceytas, Park Elektrik added asphaltite mining into its operation line. Asphaltite is sold to a sister company with a long term cost plus contract. As of YE2013, employees working in copper and asphaltite mines are 430 and 87, respectively. With remaining administrative staff, companys total work force is 577 as of year end January 2014 Park Elektrik Madencilik

5 5 Park Elektriks Existing & Planned Facilities Asphaltite Mine Sırnak Natural Gas Power Plant Adana Copper Mine Siirt HPP Diyarbakır Natural Gas Power Plant Edirne January 2014 Park Elektrik Madencilik

6 6 I) Madenköy Copper Zone Park Elektrik acquired operation license of Madenkoy copper mine in 2004 from Eti Holding, a state-owned entity engaged in mining businesses, for TL9.4 mn. Mine operations started in late 2006 in the copper zone. So far, around 7 mn tons of ore was extracted in the copper zone. According to initial reports, proven reserves in the zone was determined as 13 mn tons of ore. However, according to a reserve report issued by Micromine Consulting Services in November 2011, total reserves in the zone was determined as 39.8 mn tons of ore, 31.2 mn tons of which was measured. The company has a concentration facility and it produces and sells concentrated copper that includes copper content of around 20% level. Park Elektrik exports all of its concentrated copper production to an international commodity broker namely Traxys, while the end customer is China. January 2014 Park Elektrik Madencilik

7 Park Elektrik7 Micromine Reserve Report Based On JORC According to a JORC (Joint Ore Resources Code) compliant reserve report issued by Micromine Consulting Services in November 2011, based on the drilling and sampling works done by different companies since 1981, the total reserves of Madenköy project was determined as 39,821,000 tons of ore, 31,182,000 tons of which was measured. According to the same report, average grade in Madenkoy copper mine is 2.4% for the whole zone. Current grade in the zone is lower, at % levels in average. Source: JORC Resource Estimate Report by Micromine 7 January 2014 Park Elektrik Madencilik

8 Park Elektrik8 Capacity Expansion & Condemnation In parallel with growing reserves in the Madenkoy copper zone, the company increased its concentration facilitys capacity from 750k to 1.2 mn tons of ore processing as of October Total capex for this investment was Euro 3.5mn. Furthermore, Park Elektrik has completed its second phase of capacity expansion project to 1.8 mn tons of ore processing by December 2012 with an investment amount of Euro 3.5 mn. Condemnation process due to expanding area of open pit mine continued in 2013 in line with the mines developmental needs. Company paid TL12mn in 2012 and TL11mn in 2013 for condemnation expenses. 8 January 2014 Park Elektrik Madencilik Concentration Facility Ore Processing Capacity (ton)750,0001,200,0001,800,000 * Capacity increase to 1,2 mn tons was realized in October 2011.

9 Park Elektrik9 Production Volumes & Targets 9 January 2014 Park Elektrik Madencilik E2014 E2015E Ore (tons, wet)973,6281,213,0131,500,0001,600,0001,500,000 Growth%9625%24%7-%6 Concentrated Copper (wmt)77,51089,253105, ,000 Growth107%15%18%-%10

10 Park Elektrik10 Shift To Open Pit Mining & Stripping Expenses Having being operated underground mining since the beginning of operations in the Madenköy copper zone, Park Elektrik recently shifted its copper mining operations from underground to open-pit mining by the mid of Based on projections, the company plans to continue open pit mining between for 17 years. Regarding this shift, the company started pre-stripping in Madenköy copper zone by subcontractors. Pre-stripping of 13 mn m 3 from mid of 2012 until mid of 2013 costed TL65 mn. Including pre-stripping, total planned stripping cost for 2013 is TL 82mn. 10 January 2014 Park Elektrik Madencilik

11 Park Elektrik Estimated Expenses In Copper Zone 11 January 2014 Park Elektrik Madencilik ExpensesTL mn ORE PRODUCTION88 - Stripping82 - Others6 FACILITY30 OTHER26 TOTAL144

12 12 January 2014 Park Elektrik Madencilik Open Pit Site View

13 13 January 2014 Park Elektrik Madencilik Main Ore Body Topography Open Pit Topographic View – I

14 14 January 2014 Park Elektrik Madencilik Open Pit Topographic View - II Main Ore Body

15 15 January 2014 Park Elektrik Madencilik Open Pit Site Intersection

16 16 II) Silopi Asphaltite Zone Asphaltite is a petroleum-origin hydrocarbon with a thermal value of 5,500-5,800 kcal/kg. Park Elektrik has the operational rights of Silopi asphaltite mine until Estimated asphaltite reserve in Silopi is around 35 mn tons based on Turkish Coal Enterprise (TKI) reports. Operations in the asphaltite zone started in June The company provides asphaltite to Silopi Elektrik Üretim A.Ş., a group company which is involved in electricity production in Silopi with fluidized bed technology and has a starting capacity of 135MW. Annual production amount in Silopi is around 450,000 tons and is subject to increase from 2014 onwards in line with capacity expansion of Silopi EUAS from 135MW to 405MW. With the expansion, annual asphaltite production of Park Elektrik is also estimated to be tripled. Based on recently renewed contract by two companies, sale price of asphaltite is determined as Costs + 15%. January 2014 Park Elektrik Madencilik

17 17 Open-Pit Mining in Silopi January 2014 Park Elektrik Madencilik

18 18 II.Planned Investments January 2014 Park Elektrik Madencilik

19 19 Diyarbakır HPP January 2014 Park Elektrik Madencilik Installed capacity will be 50.5 MW. Production license is valid for 49 years. According to recent feasibility studies, estimated investment amount is US$ 100 mn. The compay plans to start HPP investment in the second half of 2013 with an estimated investment amount of TL27mn for 2013.

20 20 Ceyhan Natural Gas Power Plant Park Elektrik applied to Energy Market Regulatory Authority for a license to establish a NGPP in Ceyhan, Adana. Installed capacity will be 423 MW*. Production license will be valid for 49 years. Estimated investment amount is Euro 250 mn. January 2014 Park Elektrik Madencilik *The technological advances took place since the application to EMRA allow us to reach max. 570 MW in one unit.

21 Park Elektrik21 Edirne Natural Gas Power Plant Park Elektrik applied to Energy Market Regulatory Authority for a license to establish a NGPP in Edirne. Installed capacity will be 423 MW. Estimated investment amount is Euro 250 mn. 21 January 2014 Park Elektrik Madencilik

22 22 III.Ownership Structure & Participation Park Elektrik January 2014 Park Elektrik Madencilik

23 Park Elektrik23 Ownership Structure 23 January 2014 Park Elektrik Madencilik

24 Park Elektrik24 Participation, Park Termik Park Elektrik has 10% stake in Park Termik Elektrik San. ve Tic. A.S., a Ciner Group company which is involved in thermal power generation in Çayırhan, Ankara. Park Termik has operating rights of Çayırhan Thermal Power Plant which has a total production capacity of 620 MW, in four units. The plant is an integrated power generator which procures coal through its own lignite mines. In June 2012, Park Termik paid TL5.2 mn dividends to Park Elektrik & Madencilik. 24 January 2014 Park Elektrik Madencilik

25 25 IV.Ciner Group Park Elektrik January 2014 Park Elektrik Madencilik

26 Park Elektrik26 Ciner Group, Main Line of Businesses Energy & Mining Group Ciner Group Media Group Commerce, Industry & Services Group Major Companies & Brands Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT, Aks TV (Show TV) Major Companies Ciner Marine, Ciner Aviation, Lares Park Hotels, Park Insurance, Denmar Logistics, UCZ Retail Chain Park Holding Ciner Yayın Holding Major Companies Park Elektrik, Park Termik, Silopi Elektrik, Park Teknik, Park Toptan, Eti Soda, Rio Tur Soda, Park Cam 26 January 2014 Park Elektrik Madencilik

27 27 Ciner Group Park Holding, the main shareholder of Park Elektrik with 61% share, is solely owned by Mr. Turgay Ciner. Ranking among the largest Groups of Turkey, Ciner Groups history goes back to 1978 when it was founded. The Group has a diversified business portfolio. However, the Groups main line of businesses are mining and energy in which it has a wide expertise. Ciner Group is a pioneering actor in energy and mining sector given its new and initial steps since early 1990s. In line with accelerated privatization efforts in 1990s, the Group successfully involved in mining and energy sectors which are the underlying sectors of the Groups fast growth in recent years. As of year-end 2012, Park Holding has TL1.4 bn of consolidated sales and TL5 bn of total assets. Total number of employees within the Group is 6,000. January 2014 Park Elektrik Madencilik

28 28 V.Financial Structure January 2014 Park Elektrik Madencilik

29 Park Elektrik29 Annual Concentrated Copper Production (wmt) * Annual production declined due to production halt of four-month in January 2014 Park Elektrik Madencilik

30 30 Annual Con. Copper (dmt) & Cathode (ton) Sales * In 2010, there was a production halt of four months. ** 6,613 dmt of concentrated copper were used to produce 1,210 mt copper cathode. This pushes 2011 total sales up to 61,667 dmt. *** 14,296 dmt of concentrated copper were used to produce 2,521 mt copper cathode, that is increasing 2012 total sales volume up to 87,663 dmt. January 2014 Park Elektrik Madencilik

31 Park Elektrik31 Annual Asphaltite Sales (ton) * Asphaltite operations started in mid January 2014 Park Elektrik Madencilik

32 32 Total Sales Revenues (TL) January 2014 Park Elektrik Madencilik

33 Park Elektrik33 Net Earnings (TL mn) 33 January 2014 Park Elektrik Madencilik

34 34 Breakdown of COGS, as of YE12 January 2014 Park Elektrik Madencilik

35 35 Annual Margin Comparison (TL mn) Sales Gross Profit Gross Margin66%41%52%62%51% EBITDA EBITDA Margin56%30%50%65%62% Net Earnings Net Margin68%25%44%58%58%40% January 2014 Park Elektrik Madencilik

36 36 Sources of Financing (TL mn) * Park Elektrik has no financial debt. January 2014 Park Elektrik Madencilik

37 37 VI. Evaluation of 9M13 Financial Results January 2014 Park Elektrik Madencilik

38 38 Evaluation of 9M13 Financial Results In 9M13, total copper concentrate production has been realized as wmt, indicating 10.3% increase compared to 9M13. In 9M13, copper concentrate sales increased by 37%, y-o-y. However, taking into account 2,521 mt ton of cathode copper sales in 9M12 period which corresonds roundly DMT of concentrate sales, volume growth deteriorates to around 9%, y-o-y. In 9M13, asphaltite production and sales were realized as tons along with the demand by Silopi Elektrik, indicating %10 increase. Despite increase in volume sales, total revenues increased by only 1.2% due to decline in the average copper prices. Profit margins of the company dropped significantly due to utilizing very low grade stockpile as well as low grade ore in the early stages of the open pit in the transition period. January 2014 Park Elektrik Madencilik

39 39 Production & Sales Amount Production9M129M13% Concentrated Copper (wmt) % Cathode Copper (MT)902*-nm. Asphaltite (ton) % Sales9M129M13% Concentrated Copper (dmt) % Cathode Copper (MT)2.521**-nm Asphaltite (ton) % January 2014 Park Elektrik Madencilik * 5,010 dmt of concentrated copper is used for production of 902 mt cathode. ** 14,000 dmt of concentrated copper is used for production of 2,521 mt of cathode.

40 40 Sales Breakdown (TL) & Gross Margin by Products 9M129M13% Copper Sales ,3% Gross Margin of Copper57%34% Asphaltite Sales ,0% Gross Margin of Asphaltite14%13% Other Sales ,3% Total Sales Revenues ,3% Overall Gross Margin52%31% January 2014 Park Elektrik Madencilik

41 41 Income Statement (TL) January 2014 Park Elektrik Madencilik 9M129M13Chg. Sales % COGS % Gross Profit % Gross Margin52%31% R&D Expenses Marketing, Sales, Distribution Exp % General Adm. Expenses % Other Operating Income % Other Operating Expenses % Operating Income % Operating Margin52%32% Financial Income % Financial Expenses % Profit Before Tax % Tax % Net Profit % Net Margin44%29% EBITDA % EBITDA Margin70%59%

42 42 Summary Balance Sheets (TL) 20129M13 Current Assets296,579,212321,597,173 Fixed Assets206,692,571252,187,794 TOTAL ASSETS503,271,783573,784,967 Short Term Liabilities32,226,89243,756,302 Long Term Liabilities20,574,73421,168,700 Shareholders Equity450,470,157508,859,965 TOTAL LIABILITIES503,271,783573,784,967 January 2014 Park Elektrik Madencilik

43 43 VII. Corporate Governance Rating January 2014 Park Elektrik Madencilik

44 44 Corporate Governance Rating Park Elektriks corporate governance rating increased to 8.98 according to a recent report conducted by SAHA Corporate Rating Agency in June Based on the report, the rating means that the company performs very good in terms of Capital Markets Boards corporate governance principles. It has, to varying degrees, identified and actively managed all significant corporate governance risks through comprehensive internal controls and management systems. The companys performance is considered to represent best practice, and it had no deficiencies in any of the areas rated. January 2014 Park Elektrik Madencilik

45 45 T H A N K Y O U. CONTACTS Yesim BilginturanSelim ErdoganIR Manager Phone: January 2014 Park Elektrik Madencilik


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