Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. BNP PARIBAS/TEB INVESTMENT CONFERENCE...
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Transcript of Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. BNP PARIBAS/TEB INVESTMENT CONFERENCE...
Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.
BNP PARIBAS/TEB INVESTMENT CONFERENCEFRANKFURT
JANUARY 16-17, 2014
2
Contents
I. Company & Operations 3II. Planned Investments
18III. Ownership Structure & Participation
22IV. Ciner Group 25V. Financial Structure 28VI. Evaluation of The Latest Financial Tables
37VII. Corporate Governance Rating
43
Park Elektrik January 2014Park Elektrik Madencilik
Park Elektrik 3
I. Company & Operations
3January 2014Park Elektrik Madencilik
Park Elektrik 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.
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.
4January 2014Park Elektrik Madencilik
5
Park Elektrik’s Existing & Planned Facilities
Asphaltite Mine
Sırnak
Natural Gas Power Plant
Adana
Copper Mine
Siirt
HPP
Diyarbakır
Natural Gas Power Plant
Edirne
January 2014Park Elektrik Madencilik
6
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.
Copper mine operations started in late 2006 in Madenköy copper zone. So far, 6,4 mn tons of ore have been extracted in the copper zone, while the remaining resources is 33.4 mn tons of ore as of YE2013.
According to initial reports, proven reserves in the zone was determined as 13 mn tons of ore when Park Elektrik commenced its operations in 2006. However, according to a reserve report issued by Micromine Consulting Services in September 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.
January 2014Park Elektrik Madencilik
Park Elektrik 7
Micromine Reserve Report Based On JORC
According to a JORC (Joint Ore Resources Code) compliant reserve report issued by Micromine Consulting Services in September 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 and average grade of the measured resources is 2,26%.
Source: JORC Resource Estimate Report by Micromine
Resource Category Tonnes Cu (%)
Measured 31,182,000 2.26Indicated 6,433,000 2.79Total Measured & Indicated 37,615,000 2.34Inferred 2,206,000 3.38Project's Total Resources 39,821,000 2.40
7January 2014Park Elektrik Madencilik
Park Elektrik 8
Capacity Expansion & Condemnation
In parallel with growing reserves in Madenkoy copper zone, the company increased its concentration facility’s capacity from 750k to 1.8 mn tons of ore processing in two phases with a total investment amount of €7 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. For 2014, TL10mn of condemnation expense is included in the Company’s investment plan.
8January 2014Park Elektrik Madencilik
Concentration Facility 2011 2012 2013
Ore Processing Capacity (ton) 750,000 1,200,000 1,800,000
Park Elektrik 9
Production Volumes & Targets
9January 2014Park Elektrik Madencilik
2011 2012* 2013E** 2014 E 2015E
Stripping (m3) - 4,024,000 15,000,000 9,000,000 9,000,000
Ore Production (tons, wet) 1,024,871 1,276,856 1,500,000 1,600,000 1,600,000
Ore Used In Con. Center (tons, dry) 949,731 1,138,232 1,500,000 1,500,000 1,500,000
Grade of Ore (%) 1,73 1,77 1,47 1,53 1,75
Con. Copper Production (wmt) 77,510 89,253 105,000 105,000 115,000
Con. Copper (dmt) (~92% of wmt) 71,309 82,113 96,600 96,600 105,800
Copper (mt) (~20% of dmt con. copper) 14,262 16,423 19,300 19,300 21,160
* Pre-stripping started in 2012. ** Production through open-pit started in mid of 2013.
Park Elektrik 10
Long Term Planning in Open Pit
Having being operated by 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 2013-2031 for 19 years. Throughout open pit mining operations, the company plans to produce 26.4 mn tons of ore with 246 mn m3 stripping with an average strip ratio of 9.3.
10January 2014Park Elektrik Madencilik
Period Estimated Total Stripping(m3)
Estimated Total Ore Production(ton)
Estimated Strip Ratio
Estimated Total Con. CopperProduction (wmt)
2013-2031 246,000,000 26,400,000 9,31 2,107,702
Park Elektrik 11
2014 Estimated Investments In Copper Zone
11January 2014Park Elektrik Madencilik
Investments TL mn
Open Pit 67
- Stripping 45
- Derivation Tunnel 7
-Waste Water Pool 6,5
-Other 8,5
Concentration Center 14,3
-Other 12,7
Total 94
12January 2014Park Elektrik Madencilik
Open Pit Site View
Current View From Mine
Park Elektrik Madencilik January 2014 13
Views From The Pit
Park Elektrik Madencilik January 2014 14
15January 2014Park Elektrik Madencilik
Main Ore Body
Topography
Open Pit Topographic View – I
16January 2014Park Elektrik Madencilik
Open Pit Topographic View - II
Main Ore Body
17January 2014Park Elektrik Madencilik
Open Pit Site Intersection
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%”.
January 2014Park Elektrik Madencilik
19
Open-Pit Mining in Silopi
January 2014Park Elektrik Madencilik
20
II. Planned Investments
January 2014Park Elektrik Madencilik
21
Diyarbakır HPP
January 2014Park Elektrik Madencilik
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.
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.
January 2014Park Elektrik Madencilik
*The technological advances took place since the application to EMRA allow us to reach max. 570 MW in one unit.
Park Elektrik 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.
23January 2014Park Elektrik Madencilik
24
III. Ownership Structure & Participation
Park Elektrik January 2014Park Elektrik Madencilik
Park Elektrik 25
Ownership Structure
Others32%
Turgay Ciner7%
Park Holding61%
25January 2014Park Elektrik Madencilik
Park Elektrik 26
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.
26January 2014Park Elektrik Madencilik
27
IV. Ciner Group
Park Elektrik January 2014Park Elektrik Madencilik
Park Elektrik 28
Ciner Group, Main Line of Businesses
Energy & Mining Group
Ciner Group
MediaGroup
Commerce, Industry &
Services Group
Major Companies & Brands
Haberturk NewspaperHaberturk TV, Radio,Haberturk Web Site
Bloomberg HT, Aks TV (Show TV)
Major CompaniesCiner Marine,Ciner Aviation,
Lares Park Hotels,Park Insurance,
Denmar Logistics,UCZ Retail Chain
Park Holding Ciner Yayın Holding
Major CompaniesPark Elektrik, Park
Termik, Silopi Elektrik, Park Teknik, Park
Toptan, Eti Soda, Rio Tur Soda, Park Cam
28January 2014Park Elektrik Madencilik
29
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.
January 2014Park Elektrik Madencilik
30
V. Financial Structure
January 2014Park Elektrik Madencilik
Park Elektrik 31
Annual Concentrated Copper Production (wmt)
* Annual production declined due to production halt of four-month in 2010.
31January 2014Park Elektrik Madencilik
2006 2007 2008 2009 2010 * 2011 2012 2013E
13,771
52,55464,371 63,138
37,426
77,510
89,253
105,000
32
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.
January 2014Park Elektrik Madencilik
2006 2007 2008 2009 2010 2011 2012
9,271
47,417
60,931 59,163
32,239
55,054
73,367
1,210 2,521
Park Elektrik 33
Annual Asphaltite Sales (ton)
* Asphaltite operations started in mid 2009.
33January 2014Park Elektrik Madencilik
2009 2010 2011 2012
204,856*
476,899
434,333363,848
34
Total Sales Revenues (TL)
January 2014Park Elektrik Madencilik
2007 2008 2009 2010 2011 2012
80
,04
0,6
45
11
0,7
13
,83
3
69
,85
7,0
81
64
,19
1,6
60
15
1,1
35
,66
4
22
9,2
64
,82
1
8,211,605 19,314,397
19,709,514
30,816,836
copper asphaltite
Park Elektrik 35
Net Earnings (TL mn)
35January 2014Park Elektrik Madencilik
2007 2008 2009 2010 2011 2012
19.8
74.8
19.4
37.2
100.9107.3
36
Breakdown of COGS, as of YE12
January 2014Park Elektrik Madencilik
Direct Labor Costs 24%
Materials & Machinery Replacement
15%
Fuel & Energy12%
Depreciation34%
Others10%
Rents4%
37
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% 62%
Net Earnings 75 19 37 101 107
Net Margin 68% 25% 44% 58% 40%
January 2014Park Elektrik Madencilik
38
Sources of Financing (TL mn)
* Park Elektrik has no financial debt.
January 2014Park Elektrik Madencilik
2004 2005 2006 2007 2008 2009 2010 2011 2012
88 100 130 143223
302 343443 450
814
66 53
60
3033
41 53
Shareholders' Equity Total Debt
39
VI. Evaluation of 9M13 Financial Results
January 2014Park Elektrik Madencilik
40
Evaluation of 9M13 Financial Results
In 9M13, total copper concentrate production has been realized as 75.084 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 14.000 DMT of concentrate sales, volume growth deteriorates to around 9%, y-o-y.
In 9M13, asphaltite production and sales were realized as 249.142 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.
January 2014Park Elektrik Madencilik
41
Production & Sales Amount
Production 9M12 9M13 %
Concentrated Copper (wmt) 68.060 75.084 10.3%
Cathode Copper (MT) 902* - nm.
Asphaltite (ton) 226.256 249.142 10.1%
Sales 9M12 9M13 %
Concentrated Copper (dmt) 54.225 74.261 37%
Cathode Copper (MT) 2.521** - nm
Asphaltite (ton) 226.256 249.142 10.1%
January 2014Park Elektrik Madencilik
* 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.
42
Sales Breakdown (TL) & Gross Margin by Products
9M12 9M13 %
Copper Sales 175.925.695 175.484.942 -0,3%
Gross Margin of Copper 57% 34%
Asphaltite Sales 18.707.416 25.626.498 37,0%
Gross Margin of Asphaltite 14% 13%
Other Sales 4.650.991 684.421 -85,3%
Total Sales Revenues 199.284.102 201.795.861 1,3%
Overall Gross Margin 52% 31%
January 2014Park Elektrik Madencilik
43
Income Statement (TL)
January 2014Park Elektrik Madencilik
9M12 9M13 Chg. Sales 199.284.102 201.795.861 1%COGS -95.927.254 -139.318.972 45%Gross Profit 103.356.848 62.476.889 -40%Gross Margin 52% 31%R&D Expenses 0 -58.550 -Marketing, Sales, Distribution Exp. -9.689.055 -10.399.602 7%General Adm. Expenses -11.790.410 -14.638.268 24%Other Operating Income 30.244.254 39.194.224 30%Other Operating Expenses -9.466.270 -11.393.362 20%Operating Income 102.655.367 65.181.331 -37%Operating Margin 52% 32%Financial Income 5.140.429 6.104.747 19%Financial Expenses -117.349 -437.276 273%Profit Before Tax 107.678.447 70.848.802 -34%Tax -19.988.158 -12.960.720 -35%Net Profit 87.690.289 57.888.082 -34%Net Margin 44% 29%EBITDA 140.001.432 118.106.163 -16%EBITDA Margin 70% 59%
44
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 503,271,783 573,784,967
January 2014Park Elektrik Madencilik
45
VII. Corporate Governance Rating
January 2014Park Elektrik Madencilik
46
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 2013. 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.
January 2014Park Elektrik Madencilik
Board of Directors
Stakeholders
Public Disclosure & Transparency
Shareholders
82 84 86 88 90 92 94 96 98
87.06
87.93
96.65
87.86
MAIN SECTORS AVERAGE: 89.80
47
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
[email protected]@cinergroup.com.tr
www.parkelektrik.com.tr www.cinergroup.com.tr
January 2014Park Elektrik Madencilik