Overview of Park Elektrik and Ciner Group Investments
Park Elektrik, a key player in the energy sector, transitioned from copper mining to energy production. After selling its copper mine, it invested in a thermal power plant project. The ownership structure, led by Park Holding and Turgay Ciner, highlights a strategic vision. The comprehensive Ciner Group encompasses various sectors like energy, media, and services, reflecting a diversified portfolio.
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Park Elektrik retim Madencilik Sanayi ve Ticaret A. . Investors Presentation September 2017
Contents I. II. III. IV. V. VI. Company Ciner Group Participations Financial Figures Evaluation of The Latest Financial Tables Corporate Governance Rating 3 6 9 14 20 24 June 2017 Park Elektrik 2
I. Company June 2017 Park Elektrik 3
Introduction Park Elektrik has been the sole copper mining company of Borsa Istanbul until recently. The company sold its copper mine and related assets in Siirt to Cengiz In aat for USD 195 million + VAT in March 2017 in the aftermath of a landslide occurred in the mine in November 2016. Park Elektrik was operating Madenk y copper mine for eleven years since late 2006. Following sale of copper mine, Park Elektrik invested in energy sector by purchasing 100% shares of its sister company Konya Ilg n Elektrik retim San. ve Tic. A. . for USD 150 million from Park Holding A. ., its parent company. Konya Ilg n has a strategic project and a license to establish a 500 MWe thermal power plant in Konya in central Anatolia. The company also has the operational rights of coal reserves in the same zone until 2043. There is 138 million tons of mineable lignite reserves in the zone with an average calorific value of 2069 kcal/kg. According to initial plans, estimated time for the initiation of the project is 2018 and estimated duration is 43 months. September 2017 Park Elektrik 4
Ownership Structure Ownership Structure Park Elektrik retim Madencilik San. ve Tic. A. . Ownership Structure Others 32% Share (%) Amount (TL) Park Holding A. . 61,25 91.168.622 Park Holding 61.24% Turgay Ciner 6,76 10.065.983 Turgay Ciner 6.76% Others 31,99 47.632.638 Total 100,00 148.867.243 September 2017 Park Elektrik 5
II. Ciner Group September 2017 Park Elektrik 6
Ciner Group Structure Ciner Group Park Holding Ciner Yay n Holding Commerce, Industry & Services Group Energy & Mining Group Media Group Major Companies Park Elektrik, Park Termik, Silopi Elektrik, Konya Ilg n Elektrik, Park Toptan, Park Teknik, Eti Soda, Kazan Soda, Park Cam Major Companies & Brands Haberturk Newspaper Haberturk TV, Radio, Haberturk Web Site Bloomberg HT, Aks TV (Show TV) Major Companies Ciner Navigation, Ciner Aviation, Denmar Logistics, Lares Park Hotels, Park Insurance, September 2017 Park Elektrik 7
Ciner Groups History 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 mainly in coal mining- and energy sectors which are the underlying sectors of the Group s fast growth. In recent years, Group entered a new area of mining through trona mining and soda ash production in Turkey and US. Soda ash is an essential raw material used mainly in glass, chemicals and detergents industries. The Group s total soda ash production capacity amounted to 6.9 mn tons/year including its production units in Beypazar & Kazan-Turkey and Wyoming-USA. As one of the largest and lowest cost producers of natural soda ash worldwide, Ciner Group also invested in glass production in 2013 with a 1000 ton/day capacity in two lines in Boz y k, Central Anatolia, Turkey. September 2017 Park Elektrik 8
III. Participations of Park Elektrik September 2017 Park Elektrik 9
Konya Ilgn Elektrik retim San. ve Tic. A.. (100% Subsidiary) Konya Ilg n was established to extract lignite from its coal mine to produce and sell electricity. Ilg n lignite field has an mineable 138 million tons of lignite ore with an average heat value of 2069 kcal/kg, and the ore to be extracted from the field will be used for the plant with the thermal power of 500 MWe, with a supercritical circulating fluidized bed technology. Konya Ilg n lignite field was initially discovered by drilling done by the MTA in the 1980s. With the drilling and reserve works performed by North American Coal Company that holds the operating rights of the field in subsequent years, the amount of lignite reserves in the field was found out. In 2011, Konya Ilg n took over operational rights of the field until 2043, which may be extended upon request. Since 2011, Konya Ilg n have made drillings to confirm existing mining data and have worked towards creating a safe and sustainable mine plan by examining the area's geology and reserves. In this context, confiscation process related to the land are continuing. Konya Ilg n have conducted technical studies with domestic and foreign consultant firms including Vattenfall GmbH, FugroSial, Istanbul Technical University especially for reserve calculations and mine planning. September 2017 Park Elektrik 10
Investment Facts of Ilgn Thermal Power Plant Project Investment in Konya Ilg n is estimated to start in 2018 and will take 43 months to be completed. Estimated total investment amount for Konya Ilg n thermal power plant is around USD 650 million, where EPC contract amount is USD 597million The EPC contract amount is planned to be externally financed by 85%. Estimated tax reduction for the investment is around USD 170 million due to heavy tax incentives granted for domestic coal using thermal power plants. So far, only preparation works have been done such as dewatering in the construction site, acquiring of construction and environmental licenses from local governmental agencies. September 2017 Park Elektrik 11
Projected Electricity Production of Konya Ilgn PP According to feasibility studies projected gross and net electricity production amount of the power plant will be as given in the table below. Projected Annual Electricity Production Working Hour (Hour/year) 7,600 Capacity (MWe) 500 Gross Electricity Production (kWh/year) 3,800,000,000 Primer (kWh) 19,000,000 Primer Loss 0.5% Gross Electricity Production (kWh/year) 3,781,000,000 Internal Consumption (kWh/Year) 434,815,000 Internal Con. Rate 11.5% Net Electricity Production (kWh/Year) 3,346,185,000 September 2017 Park Elektrik 12
Park Termik Elektrik San. ve Tic. A.. (10% minority share) 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 ay rhan, Ankara. Park Termik has operating rights of ay rhan 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 of its own lignite mines. In 2015, Park Elektrik gained approximately TL7mn dividend income from Park Termik. There was no dividend income from Park Termik in 2016. September 2017 Park Elektrik 13
IV. Financial Figures September 2017 Park Elektrik 14
Sales Revenues copper asphaltite 30,816,836 33,704,018 11,587,475 19,709,514 229,264,821 226,524,686 209,927,689 164,371,258 151,135,664 8,211,605 19,314,397 135,409,470 110,713,833 69,857,081 64,191,660 80,040,645 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 September 2017 Park Elektrik 15
Net Earnings 107.3 100.9 74.8 69.3 37.2 29.2 20.5 19.8 19.4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -20.5 September 2017 Park Elektrik 16
Dividend Distribution 120,000,000 Net Earnings Distributed Dividend 100,000,000 55,222,124 80,000,000 107,013,605 100,000,000 29,234,883 100,895,711 91,464,687 69,735,813 20,459,924 63,744,336 60,000,000 40,000,000 20,000,000 0 - 0 2011 2012 2013 2014 2015 2016 -20,000,000 -20,502,367 -40,000,000 2011 99% 24% 2012 0% 0% 2013 91% 15% 2014 447% 22% 2015 189% 13% 2016 0% 0% Dividend Rate Dividend Yield September 2017 Park Elektrik 17
Sources of Financing Shareholders' Equity Total Debt 64 55 93 53 62 41 33 30 520 60 499 450 445 443 437 343 53 66 302 8 223 14 143 130 100 88 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 September 2017 Park Elektrik 18
Annual Margin Comparison (TL mn) 2010 2011 2012 2013 2014 2015 2016 Sales 84 173 265 261 223 165 135 Gross Profit 44 107 134 72 24 31 1 Gross Margin 52% 62% 51% 28% 11% 19% 1% EBITDA 42 112 165 147 121 104 55 EBITDA Margin 50% 65% 62% 57% 54% 63% 41% Net Earnings 37 101 107 70 20 29 -21 Net Margin 44% 58% 40% 27% 9% 18% - September 2017 Park Elektrik 19
V. Evaluation of the Latest Financial Results September 2017 Park Elektrik 20
Evaluation of 1H17 Financial Results In 1H17, Park Elektrik announced consolidated financial statements for the first time in its history following its purchase of 100% shares of Konya Ilg n Elektrik retim A. . In this consolidated 1H results, Park Elektrik s copper related financial results were classified under the name of Discontinued Operations as it sold all of its copper assets and halted its copper operations as of March 17, 2017. As seen in deep note 21, the company had TL495mn of net profits from discontinued operations due to sale of copper assets to Cengiz Holding. Thanks to one-time gain from sale of its coppers assets, the Company recorded TL 473 million net profits in 1H17. As of 1H17 Park Elektrik has TL162 million equivalent cash in TL deposit as a result of the difference between sale of copper assets and purchase of Konya Ilg n shares. On the other hand, purchase of Konya Ilg n shares was treated as a business combination under common control and the difference between the purchase price and the net equity at the date of acquisition is classified under equity under the name of Effects of Consolidations involving Enterprises or Enterprises Subject to Joint Control . September 2017 Park Elektrik 21
Summary Income Statement 1H16* 1H17 % Operating Income Income From Investments Income Before Financial Exp. Financial Income Financial Expenses Profit Before Tax Deferred Tax Income / Expense -6.564.498 279.784 -6.284.714 1.203.512 -226.871 -5.308.073 -36.376 -6.652.461 645.731 -6.006.730 3.681.600 -19.296.408 -21.621.538 -3.689 1% 131% -4% 206% 8405% 307% -90% Net Profit/Loss From Ongoing Operations -5.344.449 -21.625.227 305% Net Profit/Loss From Discontinued Operations -1.975.560 495.021.732 -25157% Net Profit/Loss *Restated due to consolidation and discontinued operations aspect. (Deep note 2.1) -7.320.009 473.396.505 -6567% September 2017 Park Elektrik 22
Summary Balance Sheet YE2016 1H2017 Current Assets 134,474,729 201,317,354 Fixed Assets 430,365,633 279,212,771 TOTAL ASSETS 564,840,362 480,530,125 Short Term Liabilities 35,785,791 21,745,181 Long Term Liabilities 27,306,767 26,083,896 Shareholders Equity 501,747,804 432,701,048 TOTAL LIABILITIES 564,840,362 480,530,125 September 2017 Park Elektrik 23
Corporate Governance Rating VI. September 2017 Park Elektrik 24
Corporate Governance Rating Park Elektrik s corporate governance rating is determined as 9.08 according to a recent report conducted by SAHA Corporate Rating Agency in June 2017. 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. Main Sections, Average 90.79 Board of Directors 89.51% Stakeholders 87.81% Public Disclosure & Transparency 97.25% Shareholders 87.90% September 2017 Park Elektrik 25
T H A N K Y O U. CONTACT Yesim Bilginturan IR Manager Phone: +90 216 531 25 33 y.bilginturan@cinergroup.com.tr www.parkelektrik.com.tr www.cinergroup.com.tr September 2017 Park Elektrik 26
