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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. November 15 th – 16 th , 2012 Ak Investment Investor Conference Istanbul. Contents. I. Park Elektrik Overview 3 II. Ciner Group in Brief 7 III. Operations 10 IV. Reserves 13 V. Planned Investments 20

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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

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  1. Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. November 15th – 16th, 2012 Ak Investment Investor Conference Istanbul

  2. Contents I. Park Elektrik Overview 3 II. Ciner Group in Brief 7 III. Operations 10 IV. Reserves 13 V. Planned Investments 20 VI. Financial Structure 24 VII. Evaluation of The Latest Financial Tables 33 VIII. Corporate Governance Rating 39 Park Elektrik November 2012

  3. I. Park Elektrik Overview Park Elektrik November 2012 3

  4. The Company 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. Park Elektrik took over operational rights of copper mine in 2004 and commenced copper mining operations in late 2006. Copper revenues make up around 90% of the company’s total sales revenues. 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. 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. Employees working in copper and asphaltite mines are 486 and 93, respectively. With remaining administrative staff, company’s total work force is 627. Park Elektrik November 2012 4

  5. Ownership Structure Park Elektrik November 2012 5

  6. 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 ÇayırhanThermal 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 November 2012 6

  7. II. Ciner Group in Brief Park Elektrik November 2012

  8. Ciner Group, Main Line of Businesses Ciner Group Park Holding Ciner Yayın Holding Commerce, Industry & Services Group Energy & Mining 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 Major Companies Park Elektrik, Park Termik, Silopi Elektrik, Park Teknik, Park Toptan, Eti Soda, Kazan Soda, Park Cam, TMC Park Elektrik November 2012 8

  9. 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 2011, Park Holding has TL1.3 bn of consolidated sales and TL3.2 bn of total assets. Total number of employees within the Group is 5,700. Ciner Group, Introduction November 2012

  10. III. Operations November 2012

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

  12. 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. November 2012

  13. 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 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 Park Elektrik November 2012 13

  14. 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. * 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 Elektrik November 2012 14

  15. 2012 Production Targets & Realizations by 9M12 • 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 last quarter of the year in line with ongoing capacity expansion process in the current concentration center. Park Elektrik November 2012 15

  16. Current Underground Zone Plan November 2012

  17. 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 m3,which will take one year from mid of 2012 to mid of 2013, will cost TL65mn with an average stripping cost of TL5 per m3. • The company plans to excavate 198 mn m3 soil to produce 19.75 mn tons of ore in thirteen years period of open pit mining, including initial stripping of 13 mn m3. • 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. Park Elektrik November 2012 17

  18. 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”. November 2012

  19. Open-Pit Mining in Silopi November 2012

  20. IV. Planned Investments November 2012

  21. 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. November 2012

  22. 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. November 2012

  23. 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 November 2012 23

  24. V. Financial Structure November 2012

  25. Annual Concentrated Copper Production (wmt) * 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 Elektrik November 2012 25

  26. Annual Con. Copper (dmt) & Cathode(ton) Sales * 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. November 2012

  27. Annual Asphaltite Sales (ton) * Asphaltite operations started in mid 2009. Park Elektrik November 2012 27

  28. Total Sales Revenues (TL) * Revenues from other sales is 1,616,016. November 2012

  29. Net Earnings (TL mn) Park Elektrik November 2012 29

  30. Breakdown of COGS, as of YE11 November 2012

  31. Annual Margin Comparison November 2012

  32. Sources of Financing (TL mn) * Park Elektrik has no financial debt. November 2012

  33. VI. Evaluation of 9M12 Financial Results November 2012

  34. Evaluation of 9M2012 Financial Results • 9M12, total copper concentrate production was realized as 68,060 wmt, indicating 19% increase compared to the same period of 2011. Total sales for copper products was realized as 54,225 dmt for concentrate copper and 2,521 mt for cathode copper. • Total revenues increased by 44% due to the capacity expansion in the concentration center. 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 and falling copper prices. Net revenues from fx positions also diminished. However, EBITDA margin rose 1 bsp in the same period to 64%. • The production and sales of asphaltite decreased as 29% 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. November 2012

  35. Production & Sales Amount November 2012

  36. Sales Breakdown (TL) & Gross Margin by Products November 2012

  37. Income Statement (TL) November 2012

  38. Summary Balance Sheets (TL) November 2012

  39. Corporate Governance Rating Park Elektrik was rated with 8.82as a result ofthe 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. November 2012

  40. T H A N K Y O U. CONTACTS Yesim Bilginturan Selim Erdogan IR Manager IR Manager Phone: +90 216 531 25 33 +90 216 531 25 35 y.bilginturan@cinergroup.com.trs.erdogan@cinergroup.com.tr www.parkelektrik.com.trwww.cinergroup.com.tr November 2012

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