Presentation on theme: "Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. September 2012 BGC Partners Conference London."— Presentation transcript:
Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. September 2012 BGC Partners Conference London
2 Contents I. Park Elektrik Overview3 II.Ciner Group in Brief 7 III.Operations 10 IV.Reserves13 V.Planned Investments20 VI.Financial Structure23 VII.Evaluation of The Latest Financial Tables32 VIII.Corporate Governance Rating38 Park ElektrikSeptember 2012
Park Elektrik3 I.Park Elektrik Overview September 2012
Park Elektrik4 The Company Park Elektrik was established as a textile company in 1994. Initially offered to public in 1997, Park Elektrik is the sole listed company within Ciner Group. Changed its commercial title and main line of activity in 2000. Took over operational rights of copper mine in Siirt in 2004. Commenced copper mining operations in late 2006. Merged with ISE-listed Group company, Ceytas, in May 2009 and added asphaltite mining into its operation line following Ceytas merger. September 2012
Park Elektrik5 Ownership Structure September 2012
Park Elektrik6 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 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. In June 2012, Park Termik paid TL5.2 mn dividends to Park Elektrik & Madencilik. September 2012
Park Elektrik7 II.Ciner Group in Brief Park ElektrikSeptember 2012
Park Elektrik8 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 Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT News Channel, FHM, Marie Claire, Newsweek Major Companies Park Marine Park Aviation Lares Park Hotels Park Insurance Park Foreign Trade Denmar Logistics September 2012 Park Holding Ciner Yayın Holding
Park Elektrik9 Ciner Group, Introduction 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 including companies in construction, insurance, logistics, media and broadcasting sectors. 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 2011, Park Holding has TL1.3 bn of consolidated sales and TL3.2 bn of total assets. September 2012
Park Elektrik11 Park Elektrik’s Existing & Planned Facilities Asphaltite Mine Sırnak Natural Gas Power Plant Adana Copper Mine Siirt HPP Diyarbakır September 2012
Park Elektrik12 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 4 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 the recent report issued by Micromine Consulting Services, total reserves in the zone was determined as 39.8 mn tons of ore, 31.2 mn tons of which was classified as measured. The company has a concentration facility and it produces and sells concentrated copper that includes copper content of around 19-20% levels. Park Elektrik exports all of its concentrated copper production to international commodity brokers. September 2012
Park Elektrik13 Micromine Reserve Report Based On JORC According to a JORC (Joint Ore Resources Code) compliant reserve report issued by Micromine Consulting Services in October 2011, 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 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 1.8-1.9% levels in average. Source: JORC Resource Estimate Report by Micromine September 2012
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 term. The company plans to complete this second phase capacity expansion by December 2012 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 90k production in 2012. For 2013, Park Elektrik expects production volume to be in a band of 130k-150k levels, with the assumptions of 1,8% and 2% grades respectively. September 2012 * 2012 production targets have been revised as 90k from 95k due to an unexpected delay in delivery of new production line equipment in the capacity expansion process. ** Production targets for 2013 have been revised within the context of budget revision and new grade assumptions.
Park Elektrik15 2012 Production Targets & Realizations by 1H12 September 2012 As of 1H12, Park Elektrik exceeded its first half production targets by producing 46,852 wmt of concentrated copper, 9% over its target of 43k. The company revised its year-end production target from 95k to 90k due to an unexpected delay in delivery of new production line equipment. There might also be a few daily production shortages in the second half of the year in line with ongoing capacity expansion process in the current concentration center.
Park Elektrik16 Current Underground Zone Plan September 2012
Park Elektrik17 Shift To Open Pit Mining in 2013 Park Elektrik plans to shift its copper mining operations from underground to open-pit mining by the mid of 2013. Based on projections, production through open pit mining will continue until the end of 2025 for thirteen years in two different phases. Regarding this shift, the company started stripping in the copper zone by assigning two subcontractors. The initial stripping of 13 mn m 3,which will take one year from mid of 2012 to mid of 2013, will cost TL65mn with an average stripping cost of TL5 per m 3. The company plans to excavate 198 mn m 3 soil to produce 19.75 mn tons of ore in thirteen years period of open pit mining, including initial stripping of 13 mn m 3. The compulsory purchase process which has started in line with Park Elektrik’s shift to open pit mining has completed recently with a total expense of TL11 mn. September 2012
Park Elektrik18 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 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%”. Asphaltite 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”. September 2012
Park Elektrik19 Open-Pit Mining in Silopi September 2012
Park Elektrik20 IV.Planned Investments September 2012
Park Elektrik21 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. September 2012
Park Elektrik22 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. September 2012
Park Elektrik23 V.Financial Structure September 2012
Park Elektrik24 Annual Concentrated Copper Production (wmt) September 2012 * Annual production declined due to production halt of four-month in 2010. ** To be on the conservative side, production estimation of 130k for 2013 has been used in the graph.
Park Elektrik25 Annual Con. Copper (dmt) & Cathode (ton) Sales September 2012 * In 2010, there was a production halt of four months. ** 6,613 wmt of concentrated copper were used to produce 1,210 mt copper cathode. This pushes 2011 total sales up to 61,667 dmt.
Park Elektrik26 Annual Asphaltite Sales (ton) September 2012 * Asphaltite operations started in mid 2009.
Park Elektrik27 Total Sales Revenues (TL) September 2012 * Revenues from other sales is 1,616,016.
Park Elektrik28 Net Earnings (TL mn) September 2012
Park Elektrik29 Breakdown of COGS, as of YE11 September 2012
Park Elektrik30 Annual Margin Comparison September 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%
Park Elektrik31 Sources of Financing (TL mn) September 2012 * Park Elektrik has no financial debt.
Park Elektrik32 VI. Evaluation of 1H12 Financial Results September 2012
Park Elektrik33 Evaluation of 1H2012 Financial Results In the first half of 2012, total copper concentrate production was realized as 46,852 wmt, indicating 27% increase. Total sales for copper products was realized as 38,488 dmt for concentrate copper and 2,521 mt for cathode copper. Total revenues increased by 86% due to the capacity expansion in the concentration center. Although 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, they showed significant improvement from 1Q to 2Q despite the fact that falling copper prices through the years 2011-2012. The production and sales of asphaltite decreased as 40% due to the operational halt caused by a technical failure in the Silopi Elektrik A.Ş. Park Elektrik distributed TL100 mn dividends out of 2011 earnings in May 2012. September 2012
Park Elektrik34 Production & Sales Amount September 2012 Production1H111H12% Concentrated Copper (wmt)37,02146,85227% Cathode Copper (MT)852*902*6% Asphaltite (ton)204,069122,594-40% * 852 mt cathode equals to 5,015 wmt con. copper. 902 mt cathode equals to 5,540 wmt of con. copper. Sales1H111H12% Concentrated Copper (dmt)29,68138,48830% Cathode Copper (MT)-2,521**- Asphaltite (ton)204,069122,594-40% ** 2,521 mt cathode equals to 14,032 dmt of con. copper which push up total sales to 52,520 dmt, with a 77% y-o-y growth.
Park Elektrik35 Sales Breakdown (TL) & Gross Margin by Products September 2012 1H111H12% Copper Sales68,387,080132,234,15293% Gross Margin of Copper71%55%- Asphaltite Sales8,842,0489,515,6438% Gross Margin of Asphaltite18%14%- Other Sales390,5762,932,976625% Total Sales Revenues77,619,904144,682,77186% Overall Gross Margin64%51%-
Park Elektrik36 Income Statement (TL) September 2012 1H111H12% Sales 77,619,704144,682,771 86% COGS -27,581,165-70,931,733 157% Gross Profit50.038.53973,751,03847% Gross Margin64%51%- Marketing Selling & Dist. Exp. -4,286,574-6,447,206 50% General Adm. Expenses -7,329,810-7,810,182 7% Other Operating Income 5,331,28510,448,793 96% Other Operating Expenses -1,537,688-2,498,127 62% Operating Income42,215,75267,444,31660% Operating Margin54%47%- Financial Income 15,065,03119,587,033 30% Financial Expenses -3,224,718-5,491,655 70% Profit Before Tax54,056,06581,539,69451% Tax-10,632,392-14,880,19340% Net Profit43,423,67366,659,50154% Net Margin56%46%- EBITDA49,918,85896,706,41894% EBITDA Margin64%67%-
Park Elektrik37 Summary Balance Sheets (TL) 1H111H12 Current Assets310,062,557290,575,782 Fixed Assets112,209,004176,806,617 TOTAL ASSETS422,271,561467,382,399 Short Term Liabilities29,745,36851,258,531 Long Term Liabilities6,541,6796,007,815 Shareholders Equity385,984,514410,116,053 TOTAL LIABILITIES422,271,561467,382,399 September 2012
Park Elektrik38 Corporate Governance Rating Park Elektrik was rated with 8.82 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. September 2012
Park Elektrik39 T H A N K Y O U. CONTACTS Yesim BilginturanSelim ErdoganIR Manager Phone: +90 216 531 25 33+90 216 531 25 35 email@example.com@cinergroup.com.tr www.parkelektrik.com.trwww.parkelektrik.com.tr www.cinergroup.com.trwww.cinergroup.com.tr September 2012