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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

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

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

2 Contents I. Company & Operations 3 Planned Investments 18
Ownership Structure & Participation 22 Ciner Group V. Financial Structure VI. Evaluation of The Latest Financial Tables 37 VII. Corporate Governance Rating 43 Park Elektrik Madencilik Park Elektrik January 2014 Park Elektrikjkljklşj

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

4 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 Elektrik’s 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 2006. 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, company’s total work force is 577 as of year end 2013. Park Elektrik Madencilik Park Elektrik January 2014 4

5 Park Elektrik’s Existing & Planned Facilities
jopjp Park Elektrik’s Existing & Planned Facilities Natural Gas Power Plant Edirne Copper Mine Siirt HPP Diyarbakır Natural Gas Power Plant Adana Asphaltite Mine Sırnak Park Elektrik Madencilik January 2014 jkljklşj Park Elektrikjkljklşj

6 I) Madenköy Copper Zone
jopjp 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. Park Elektrik Madencilik January jkljklşj Park Elektrikjkljklşj

7 Micromine Reserve Report Based On JORC
jopjp 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 Park Elektrik Park Elektrik Madencilik January 2014 7 Park Elektrikjkljklşj jkljklşj 7

8 Capacity Expansion & Condemnation
jopjp Capacity Expansion & Condemnation Concentration Facility 2011 2012 2013 Ore Processing Capacity (ton) 750,000 1,200,000 1,800,000 * Capacity increase to 1,2 mn tons was realized in October 2011. In parallel with growing reserves in the Madenkoy copper zone, the company increased its concentration facility’s 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 it’s 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 mine’s developmental needs. Company paid TL12mn in 2012 and TL11mn in 2013 for condemnation expenses. Park Elektrik Madencilik Park Elektrik January 8 jkljklşj Park Elektrikjkljklşj 8

9 Production Volumes & Targets
2011 2012 2013E 2014 E 2015E Ore (tons, wet) 973,628 1,213,013 1,500,000 1,600,000 Growth %96 25% 24% %7 -%6 Concentrated Copper (wmt) 77,510 89,253 105,000 115,000 107% 15% 18% - %10 Park Elektrik Park Elektrik Madencilik January 2014 9

10 Shift To Open Pit Mining & Stripping Expenses
jopjp 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 2013. 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 m3 from mid of 2012 until mid of 2013 costed TL65 mn. Including pre-stripping, total planned stripping cost for 2013 is TL 82mn. Park Elektrik Park Elektrik Madencilik January 10 Park Elektrikjkljklşj jkljklşj 10

11 2013 Estimated Expenses In Copper Zone
TL mn ORE PRODUCTION 88 - Stripping 82 - Others 6 FACILITY 30 OTHER 26 TOTAL 144 Park Elektrik Park Elektrik Madencilik January 11

12 Open Pit Site View Park Elektrik Madencilik January

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

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

15 Open Pit Site Intersection
Park Elektrik Madencilik January

16 II) Silopi Asphaltite Zone
jopjp 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%”. Park Elektrik Madencilik January jkljklşj Park Elektrikjkljklşj

17 Open-Pit Mining in Silopi
Park Elektrik Madencilik January

18 II. Planned Investments
Park Elektrik Madencilik January

19 Diyarbakır HPP 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. Park Elektrik Madencilik January

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. *The technological advances took place since the application to EMRA allow us to reach max. 570 MW in one unit. Park Elektrik Madencilik January

21 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. Park Elektrik Madencilik Park Elektrik January 21

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

23 Ownership Structure jopjp 01.04.2017 Park Elektrikjkljklşj jkljklşj 23
Park Elektrik Madencilik January 23 Park Elektrikjkljklşj jkljklşj 23

24 Participation, Park Termik
jopjp 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. Park Elektrik Park Elektrik Madencilik January 24 Park Elektrikjkljklşj jkljklşj 24

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

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

27 jopjp 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 Group’s history goes back to 1978 when it was founded. The Group has a diversified business portfolio. However, the Group’s 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 Group’s 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. Park Elektrik Madencilik January jkljklşj Park Elektrikjkljklşj

28 V. Financial Structure Park Elektrik Madencilik January

29 Annual Concentrated Copper Production (wmt)
* Annual production declined due to production halt of four-month in 2010. Park Elektrik Madencilik Park Elektrik January 29

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. Park Elektrik Madencilik January

31 Annual Asphaltite Sales (ton)
* Asphaltite operations started in mid 2009. Park Elektrik Madencilik Park Elektrik January 31

32 Total Sales Revenues (TL)
Park Elektrik Madencilik January

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

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

35 Annual Margin Comparison
(TL mn) 2008 2009 2010 2011 2012 Sales 111 79 84 173 265 Gross Profit 73 32 44 107 134 Gross Margin 66% 41% 52% 62% 51% EBITDA 62 24 42 112 165 EBITDA Margin 56% 30% 50% 65% Net Earnings 75 19 37 101 Net Margin 68% 25% 44% 58% 40% Park Elektrik Madencilik January

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

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

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. Park Elektrik Madencilik January

39 Production & Sales Amount
% Concentrated Copper (wmt) 68.060 75.084 10.3% Cathode Copper (MT) 902* - nm. Asphaltite (ton) 10.1% Sales Concentrated Copper (dmt) 54.225 74.261 37% 2.521** nm * 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. Park Elektrik Madencilik January

40 Sales Breakdown (TL) & Gross Margin by Products
% Copper Sales -0,3% Gross Margin of Copper 57% 34% Asphaltite Sales 37,0% Gross Margin of Asphaltite 14% 13% Other Sales -85,3% Total Sales Revenues 1,3% Overall Gross Margin 52% 31% Park Elektrik Madencilik January

41 Income Statement (TL) 9M12 9M13 Chg. Sales 199.284.102 201.795.861 1%
COGS 45% Gross Profit -40% Gross Margin 52% 31% R&D Expenses - Marketing, Sales, Distribution Exp. 7% General Adm. Expenses 24% Other Operating Income 30% Other Operating Expenses 20% Operating Income -37% Operating Margin 32% Financial Income 19% Financial Expenses 273% Profit Before Tax -34% Tax -35% Net Profit Net Margin 44% 29% EBITDA -16% EBITDA Margin 70% 59% Park Elektrik Madencilik January

42 Summary Balance Sheets (TL)
2012 9M13 Current Assets 296,579,212 321,597,173 Fixed Assets 206,692,571 252,187,794 TOTAL ASSETS 503,271,783 573,784,967 Short Term Liabilities 32,226,892 43,756,302 Long Term Liabilities 20,574,734 21,168,700 Shareholders Equity 450,470,157 508,859,965 TOTAL LIABILITIES Park Elektrik Madencilik January 2014

43 VII. Corporate Governance Rating
Park Elektrik Madencilik January 2014

44 Corporate Governance Rating
Park Elektrik’s 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 Board’s 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 company’s performance is considered to represent best practice, and it had no deficiencies in any of the areas rated. Park Elektrik Madencilik January 2014

45 T H A N K Y O U. CONTACTS Yesim Bilginturan Selim Erdogan
IR Manager IR Manager Phone: Park Elektrik Madencilik January 2014


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