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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. December 2010.

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Presentation on theme: "Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. December 2010."— Presentation transcript:

1 Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. December 2010

2 Park ElektrikDecember Contents  Introduction3  Ciner Group in Brief7  Operations10  Planned Investments23  Financial Structure25  Evaluation of The Latest Financial Tables40  Recent Developments 47  Future Prospects50  Market Data53

3 Park ElektrikDecember I.Introduction

4 Park ElektrikDecember The Company  Established in  Initially offered to public in  Changed its commercial title in  Commenced copper operations in late  Gathered electricity production license in 2008 for establishment of a hydro electricity power plant.  Merged with ISE-listed Group company, Ceytas, in May  Currently operating a copper and an asphaltite mine and plans to establish an HPP.

5 Park ElektrikDecember Ownership Structure

6 Park ElektrikDecember Participations, Park Termik  Park Elektrik has a 10% participation in Park Termik Elektrik San. ve Tic. A.S., a Ciner Group company which is involved in thermal power generation in Ankara province.  Park Termik operates Cayirhan Thermal Power Plant which has a total production capacity of 630 MW in four units.  Cayirhan TPP is the first thermal power plant that was privatized by the Turkish government. Right after the privatization, the CUR in the plant was increased from 48% to 81%, while also the coal production amount of the related coal fields was increased from 500 tons to 7,000 tons level.  The plant is an integrated power generator which procures coal through its own lignite mines.

7 Park ElektrikDecember II.Ciner Group in Brief

8 Park ElektrikDecember Ciner Group, Introduction  Park Holding 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 high- speed growth.  As of 1H10, The Group has a total asset size of US$3.2 bn, shareholder’s equity of US$1.6 bn, consolidated revenues of US$490 mn and consolidated EBITDA of US$133 mn with a sound EBITDA margin of 27%.

9 Park ElektrikDecember 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 Park Enerji Ekipmanları Major Companies & Brands Ciner Yayın Holding Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT, FHM, Marie Claire, Newsweek Major Companies Park Construction Park Marine Park Aviation Lares Park Hotels Park Insurance Park Foreign Trade Denmar Logistics

10 Park ElektrikDecember III.Operations

11 Park ElektrikDecember Park Elektrik’s Existing & Planned Facilities (Cu) (As) Park Elektrik & Ciner Group Headquarters (HPP) (Nat. Gas PP)

12 Park ElektrikDecember I) Madenköy Copper Zone

13 Park ElektrikDecember I) Madenköy Copper Zone  License of copper mine in Madenköy zone was acquired from Eti Holding, a state-owned company, for YTL9.4 mn in January  The company sells concentrated copper that includes 20-24% copper content.  Selling price is determined based on the spot price at the day of transaction in London Metal Exchange.

14 Park ElektrikDecember II) Silopi Asphaltite Zone  Park Elektrik has the operational rights of an asphaltite mine in Silopi until the end of Asphaltite is a petroleum-origin hydrocarbon with higher thermal value. Calorie of asphaltite varies between 5,500 and 5,800 kcal/kg.  The mine will be open-pit for the first years of operation. Later on, underground mining will be applied by the method of “Cut and Fill Block Caving”.  According to Turkish Coal Enterprise (TKI) reports, estimated asphaltite reserve in Silopi is around 25 mn tons.  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 a starting capacity of 135 MW.  Annual production amount in Silopi zone is 400,000 tons and sale price of asphaltite per ton is determined as TL 40.5 for 2009 and 2010.

15 Park ElektrikDecember IV.Planned Investments

16 Park ElektrikDecember Diyarbakır HPP  Installed capacity will be 50.5 MW.  Production license is valid for 49 years.  Estimated investment amount is US$ 60 mn.  Estimated start-up for the investments is early  The plant is estimated to be operational by the end of 2013.

17 Park ElektrikDecember Ceyhan Natural Gas CCPP  Installed capacity will be 423 MW.  Production license will be valid for 49 years.  Estimated investment amount is around 250 mn Euros.  Decision was taken to make application to Energy Market Regulatory Authority.

18 Park ElektrikDecember V.Financial Structure

19 Park ElektrikDecember Quarterly Copper Sales Since The Beginning (dmt)

20 Park ElektrikDecember Annual Copper Sales (dmt)

21 Park ElektrikDecember Total Sales Revenues* (TL) * Ignores other sales & discounts.

22 Park ElektrikDecember Main Determinant; LME Price

23 Park ElektrikDecember Average Product Price

24 Park ElektrikDecember COGS, as of YE09

25 Park ElektrikDecember Per Unit Cash Costs For Con. Copper (TL/dmt)

26 Park ElektrikDecember Net Earnings (TL mn)

27 Park ElektrikDecember Margins

28 Park ElektrikDecember Sales, EBITDA (TL mn) & EBITDA Margin

29 Park ElektrikDecember Margins

30 Park ElektrikDecember Sources of Financing (TL mn)

31 Park ElektrikDecember Working Capital (TL)

32 Park ElektrikDecember VI.Evaluation of 3Q10 Financial Results

33 Park ElektrikDecember Evaluation of 3Q10 Results  Despite no copper concentrate sales due to strike in copper zone in the third quarter, the company’s sales and margins did not deteriorate thanks to higher copper prices throughout the year 2010, compared to same period of last year.  Due to the strike in the copper concentrate facility, the Company suffered operational loss in 3Q.  Although no copper concentrate sales was made in 3Q10, total sales revenues reflected only 17% decrease, y-o-y, in 3Q10 thanks to the higher copper prices and increased asphaltite sales.  Asphaltite sales also reflected a record rise due to base term effect. Recall that the company had initiated its asphaltite sales in June  Benefiting from higher copper prices, the company’s margins also increased despite lower copper sales.  The company also benefited from financial income on its interest bearing huge cash lent to parent Park Holding A.S.  The company recorded TL18.6mn of net income in 9M10, with a strong 67% increase, y-o-y.

34 Park ElektrikDecember Sales Amount 9M099M10% Concentrated Copper (dmt)46,35816,980-63% Asphaltite (ton)136,856347,822154% 1H091H10% Concentrated Copper (dmt)31,60016,980-46% Asphaltite (ton)46,245217,593371%

35 Park ElektrikDecember Sales Breakdown (TL) & Gross Margin by Products 9M099M10% Concentrated Copper Sales ,8% Gross Margin of Copper42,4%54,6% Asphaltite Sales ,3% Gross Margin of Asphaltite29,1%32,6% Other Sales ,5% Total Sales Revenues ,0% Overall Gross Margin40,9%47,8%

36 Park ElektrikDecember Income Statement (TL) 9M099M10% Sales ,0% COGS ,7% Gross Profit ,0% Gross Margin 40,9%47,8% Operational Expenses ,1% Operational Profit ,6% Operating Margin 15,2%17,5% Net Fin. Income/Exp ,9% Tax ,1% Net Profit ,5% Net Margin 20,2%40,4%

37 Park ElektrikDecember Margins 9M099M10 Gross Profit Margin4148 Operational Profit Margin1518 EBITDA Margin2733 Net Profit Margin2040

38 Park ElektrikDecember Summary Balance Sheets (TL) YE20099M10% Current Assets235,938,117242,569,5832,7 Fixed Assets95,825,46894,045,475-2 Short Term Liabilities25,745,00512,374, Long Term Liabilities4,228,1323,828,374-9 Shareholders Equity301,790,448320,412,6396

39 Park ElektrikDecember VII.Recent Developments

40 Park ElektrikDecember Recent Developments, Corporate Governance Rating  Park Elektrik was rated with 8.65 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.

41 Park ElektrikDecember Recent Developments, Strike  On May 15, Park Elektrik’s copper production was halted temporarily following the dispute between the Workers’ Union in Siirt Copper Mine and the company over salary increase issues.  The production started again on September 15th, following the agreement with the Workers Union and the company.  However, the company’s 3Q10 financial results have not reflected tremendous revenue decrease thanks to higher product prices and also due to higher asphaltite revenues.

42 Park ElektrikDecember VIII.Future Prospects

43 Park ElektrikDecember Future Prospects  In the very near future, Park Elektrik is going to start construction of its HPP. The company will call for a tender for the construction of the HPP in the coming months. It is estimated that HPP will become operational by the end of 2013 or in 2014, at the latest.  Being cash rich, Park Elektrik looks for new investment opportunities. Electricity production tenders which are expected to be opened in 2011, are among the target areas of the company.  The company continues its exploratory drilling in this copper rich area, targeting to increase its proven copper reserves above its initial level of 13.6 mn tons up until the probable reserves of 23 mn tons level. These studies are estimated to increase Park Elektrik’s life period considerably. The company also aims to increase its tenor rate through these drillings.  As Silopi Elektrik’s capacity will be tripled by 2014, at the latest, Park Elektrik’s asphaltite sales will be also tripled after 2014 which means our production volume will increase to mn tons.

44 Park ElektrikDecember IX.Market Data

45 Park ElektrikDecember Market Data Price Data TickerPRKTE.IS Paid In Capital (TL)148,867,243 Current Price (TL, Oct. 28, 10) Week Range (TL) MCap (US$mn)266 Net Cash (US$mn, 3Q10)153 Shareholders’ Eq. (US$mn, 3Q10)222 3M Av. Tr. Vol. (US$mn)4.6 Price Performance 1M3MYTD US$-15%12%-6% ISE Rel.-4%-1%-25%

46 Park ElektrikDecember T H A N K Y O U. Please us at for any additional questions you might You can also visit our company’s web site and Ciner Group’s web site

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