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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. May 8, 2012.

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Presentation on theme: "Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. May 8, 2012."— Presentation transcript:

1 Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. May 8, 2012

2 2 Contents I. Ciner Group in Brief3 II.Park Elektrik Overview6 III.Operations 10 IV.Micromine Reserve Report13 V.Planned Investments19 VI.Financial Structure22 VII.Evaluation of The Latest Financial Tables31 VIII.Corporate Governance Rating38 Park ElektrikMay 2012

3 Park Elektrik3 I.Ciner Group in Brief Park ElektrikMay 2012

4 Park Elektrik4 Ciner Group, Introduction  Park Holding, the main shareholder of Park Elektrik, is controlled by Ciner Group, which is solely owned by Mr. Turgay Ciner. Ciner Group’s history goes back to 1978 when it was founded.  Ranking among the largest Groups of Turkey, Ciner Group diversified its operations from the energy and mining sectors to tourism, media and broadcasting sectors.  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. May 2012

5 Park Elektrik5 Ciner Group, Main Line of Businesses Energy & Mining Group Ciner Group Media Group Commerce, Industry & Services Group Major Companies Park Elektrik Park Termik Park Teknik Eti Soda Silopi Elektrik Major Companies & Brands Ciner Yayın Holding Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT, FHM, Marie Claire, Newsweek Major Companies Park Marine Park Aviation Lares Park Hotels Park Insurance Park Foreign Trade Denmar Logistics May 2012

6 Park Elektrik6 II.Park Elektrik Overview May 2012

7 Park Elektrik7 The Company  Established in 1994.  Initially offered to public in 1997. Park Elektrik is the sole listed company within Ciner Group.  Changed its commercial title in 2000.  Commenced copper mining operations in late 2006.  Merged with ISE-listed Group company, Ceytas, in May 2009.  Added asphaltite mining into its operation line following Ceytas merger.  Currently operating a copper and an asphaltite mine and plans to establish an HPP (Hydroelectricity Power Plant) in the medium term, and a NGPP (Natural Gas Power Plant) in the long term. May 2012

8 Park Elektrik8 Ownership Structure May 2012

9 Park Elektrik9 Participations, 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 operates Cayirhan 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. May 2012

10 Park Elektrik10 III.Operations May 2012

11 Park Elektrik11 Park Elektrik’s Existing & Planned Facilities Asphaltite Mine Sırnak Natural Gas Power Plant Adana Copper Mine Siirt HPP Diyarbakır May 2012

12 Park Elektrik12 I) Madenköy Copper Zone  Park Elektrik acquired operation license of Madenkoy copper mine from Eti Holding, a state-owned entity engaged in mining businesses, in 2004 for TL9.4 mn.  Mine operations started in late 2006 in the copper zone. So far, around 3 mn tons of ore was extracted in the copper zone.  According to initial reports, proven reserves in the zone was determined at 13 mn tons of ore. However, based on a recent report conducted by Micromine Consulting Services, total reserves in the zone was determined at 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 a varying rate of copper. Currently, copper content in the concentrate varies between 19-20% levels.  Although the Company does not posses a smelting facility, it recently initiated a trial production through a domestic subcontractor to produce A grade cathode copper that includes 99.9% copper content.  Park Elektrik exports all of its concentrated copper and cathode copper production. May 2012

13 Park Elektrik13 Micromine Reserve Report Based On JORC  According to a JORC compliant recent reserve estimation made by Micromine Consulting Services, based on the drilling and sampling works by Eti Holding (1981), Preussag AG Metall (1988) and Park Elektrik, the total reserves of Madenköy project was determined 39,821,000 tons of ore, 31,182,000 tons of which was set to be measured.  Based on the same report, average tenor rate in Madenkoy copper mine is determined as 2.4% for the whole zone. Current tenor in the zone is lower at 1.9- 2.0% levels. Source: JORC Resource Estimate Report by Micromine May 2012

14 Park Elektrik14 Capacity Expansion  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 as of October 2011. Total capex for this investment was Euro 3.5mn.  Furthermore, Park Elektrik plans to increase its concentration capacity to 1.8 mn tons in the short-mid term. The company plans to complete this second phase capacity expansion in 2013 with a planned investment amount of Euro 3.5-4mn.  In line with increasing capacity, Park Elektrik revised its production targets for the coming two years. The company expects 95k and 150k wmt of production for 2012 and 2013, respectively. May 2012

15 Park Elektrik15 2012 Production Targets May 2012

16 Park Elektrik16 Zone Plan May 2012

17 Park Elektrik17 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 2033. 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 2009. 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 135 MW.  Annual production amount in Silopi is around 450,000 currently and is subject to increase from 2014 onwards in line with capacity expansion of Silopi EUAS. With the expansion, annual asphaltite production will be tripled.  Park Elektrik has a profit margin of 15% on its asphaltite sales based on recently renewed contract by two companies. The contract will be valid as long as Silopi Elektrik runs the operations.  The mine will be open-pit for the first years of operation. Later on, underground mining will be done by the method of “Cut and Fill Block Caving”. May 2012

18 Park Elektrik18 Open-Pit Mining in Silopi May 2012

19 Park Elektrik19 IV.Planned Investments May 2012

20 Park Elektrik20 Diyarbakır HPP  Installed capacity will be 50.5 MW.  Production license is valid for 49 years.  Estimated investment amount is US$ 60 mn according to initial feasibility studies. May 2012

21 Park Elektrik21 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. May 2012

22 Park Elektrik22 V.Financial Structure May 2012

23 Park Elektrik23 Annual Concentrate (dmt) & Cathode (ton) Sales May 2012 * In 2010, there was a production halt of four months. ** Cathode copper sales realized for the first time in 3Q11. *** 17.268 wmt concentrated copper were used to produce 2829 mt copper cathode.

24 Park Elektrik24 Annual Asphaltite Sales (ton) May 2012 * Asphaltite operations started in mid 2009.

25 Park Elektrik25 Total Sales Revenues* (TL) *Revenues from other sales is 1.676.016 TL May 2012

26 Park Elektrik26 Net Earnings (TL mn) May 2012

27 Park Elektrik27 Breakdown of COGS, as of YE11 May 2012

28 Park Elektrik28 Annual Margin Comparison May 2012 (TL mn)20072008200920102011 Sales801117984173 Gross Profit47733244107 Gross Margin59%59%66%41%52%62% EBITDA4343622442112 EBITDA Margin52%56%30%50%65% Net Earnings20751937101 Net Margin25%68%25%44%58%58%

29 Park Elektrik29 Sources of Financing (TL mn) May 2012 * Park Elektrik has no financial debt.

30 Park Elektrik30 VI. Evaluation of 1Q12 Financial Results May 2012

31 Park Elektrik31 Evaluation of 1Q2012 Financial Results  In the first quarter of 2012, total copper concentrate production was realized as 22,646 wmt, indicating 16% increase. Total sales for copper products was realized as 14,481 dmt for concentrate copper and 1,600 mt for cathode copper. Note that 8,991 dmt concentrate copper was spent to produce the cathode sold.  Revenues from total sales increased by 52% due to the capacity expansion in the concentration center. However, profit margins of the company did not realize as high as the previous year due to the depreciation costs of an open pit copper site in which the operations ended. Based on this fact, all of the profit margins deteriorated except EBITDA margin.  The production and sales of asphaltite decreased as 37% due to the operational halt caused by a failure in the Silopi Elektrik A.Ş. May 2012

32 Park Elektrik32 Production & Sales Amount May 2012

33 Park Elektrik33 Sales Breakdown (TL) & Gross Margin by Products May 2012 1Q111Q12% Copper Sales38,986,23260,225,58454% Gross Margin of Copper73%56% Asphaltite Sales4,784,8325,084,6426% Gross Margin of Asphaltite17%13% Other Sales106,7611,368,8171182% Total Sales Revenues43,877,82566,679,04352% Overall Gross Margin67%52%

34 Park Elektrik34 Income Statement (TL) May 2012

35 Park Elektrik35 Margins 1Q111Q12 Gross Profit Margin67%52% Operational Profit Margin63%40% EBITDA Margin73%74% Net Profit Margin54%33% May 2012

36 Park Elektrik36 Summary Balance Sheets (TL) 1Q20111Q2012 Current Assets297,678,924334,187,594 Fixed Assets186,424,631167,971,525 TOTAL ASSETS484,103,555502,159,119 Short Term Liabilities34,255,80731,335,792 Long Term Liabilities6,391,1965,693,572 Shareholders Equity443,456,552465,129,755 TOTAL LIABILITIES484,103,555502,159,119 May 2012

37 Park Elektrik37 Corporate Governance Rating  Park Elektrik was rated with 8.67 as a result of the Corporate Governance study done by SAHA Kurumsal Rating Agency. According to report done by SAHA, 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. May 2012

38 Park Elektrik38 T H A N K Y O U. CONTACTS Yesim BilginturanSelim ErdoganIR Manager Phone: +90 216 531 25 33+90 216 531 25 35 May 2012

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