Ciner Group - Erste Securities İstanbul

Ciner Group - Erste Securities İstanbul

Park Elektrik Üretim Madencilik
Sanayi ve Ticaret A.Ş.
March 2012
Erste Securities Istanbul
Turkey in Focus Conference
Contents
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Ciner Group in Brief
Park Elektrik Overview
Operations
Micromine Reserve Report
Planned Investments
Financial Structure
Evaluation of The Latest Financial Tables
Corporate Governance Rating
Park Elektrik
March 2012
3
6
10
13
19
22
31
38
2
I.
Park Elektrik
Ciner Group in Brief
March 2012
3
Ciner Group, Introduction
Park Holding, the main shareholder of Park Elektrik, 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 fast
growth in recent years.
Park Elektrik
March 2012
4
Ciner Group, Main Line of Businesses
Ciner Group
Energy & Mining
Group
Major Companies
Park Elektrik
Park Termik
Park Teknik
Eti Soda
Silopi Elektrik
Park Elektrik
Media
Group
Commerce,
Industry &
Services Group
Major Companies
& Brands
Ciner Yayın Holding
Haberturk Newspaper
Haberturk TV, Radio,
Haberturk Web Site
Bloomberg HT, FHM,
Marie Claire, Newsweek
Major Companies
Park Marine
Park Aviation
Lares Park Hotels
Park Insurance
Park Foreign Trade
Denmar Logistics
March 2012
5
II.
Park Elektrik
Park Elektrik Overview
March 2012
6
The Company
Established in 1994.
Initially offered to public in 1997. Park Elektrik is the sole listed
company within Ciner Group.
Changed its commercial title in 2000.
Commenced copper mining operations in late 2006.
Merged with ISE-listed Group company, Ceytas, in May 2009.
Added asphaltite mining into its operation line following Ceytas
merger.
Currently operating a copper and an asphaltite mine and plans to
establish an HPP (Hydroelectricity Power Plant) in the medium
term, and a NGPP (Natural Gas Power Plant) in the long term.
Park Elektrik
March 2012
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Ownership Structure
Others
32%
Park Holding
61%
Turgay Ciner
7%
Park Elektrik
March 2012
8
Participations, 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.
Park Elektrik
March 2012
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III.
Park Elektrik
Operations
March 2012
10
Park Elektrik’s Existing & Planned Facilities
Copper Mine
Siirt
HPP
Natural Gas
Power Plant
Adana
Park Elektrik
March 2012
Diyarbakır
Asphaltite
Mine
Sırnak
11
I) Madenköy Copper Zone
Park Elektrik acquired operation license of Madenkoy copper mine from Eti
Holding, a state-owned entity engaged in mining businesses, in 2004 for TL9.4
mn.
Mine operations started in late 2006 in the copper zone. So far, around 3 mn tons
of ore was extracted in the copper zone.
According to initial reports, proven reserves in the zone was determined at 13 mn
tons of ore. However, based on a recent report conducted by Micromine
Consulting Services, total reserves in the zone was determined at 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 a varying rate of copper. Currently, copper content in the
concentrate varies between 19-20% levels.
Although the Company does not posses a smelting facility, it recently initiated a
trial production through a domestic subcontractor to produce A grade cathode
copper that includes 99.9% copper content.
Park Elektrik exports all of its concentrated copper and cathode copper
production.
Park Elektrik
March 2012
12
Micromine Reserve Report Based On JORC
According to a JORC compliant recent reserve estimation made by Micromine
Consulting Services, 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 39,821,000 tons of ore, 31,182,000 tons of
which was set to be measured.
Based on the same report, average tenor rate in Madenkoy copper mine is
determined as 2.4% for the whole zone. Current tenor in the zone is lower at 1.92.0% levels.
Resource Category
Measured
Indicated
Total Measured & Indicated
Inferred
Project's Total Resources
Tonnes
Cu (%)
31,182,000
6,433,000
37,615,000
2,206,000
39,821,000
2.26
2.79
2.34
3.38
2.40
Source: JORC Resource Estimate Report by Micromine
Park Elektrik
March 2012
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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-mid term. The company plans to complete this second phase
capacity expansion in 2013 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 95k and 150k wmt of production for
2012 and 2013, respectively.
Capacity Expansion & Production Targets
Concentration Capacity (tons)
Concentrated Copper Production Estimations (wmt)
Park Elektrik
March 2012
2012
2013
1,200,000
1,800,000
95,000
150,000
14
2012 Production Targets
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Total
Ore (wmt)
91,000 87,000 91,000 91,000 94,000 91,000 94,000 94,000 91,000 94,000 91,000 91,000
1,100,000
Ore (dmt)
86,450 82,650 86,450 86,450 89,300 86,450 89,300 89,300 86,450 89,300 86,450 86,450
1,045,000
Con. Copper (wmt)
7,811
7,467
7,811
7,811
8,068
7,811
8,068
8,068
7,811
8,068
7,811
7,811
94,416
Con. Copper (dmt)
7,186
6,870
7,186
7,186
7,423
7,186
7,423
7,423
7,186
7,423
7,186
7,186
86,864
wmt= wet metric ton, dmt= dry metric ton
Park Elektrik
March 2012
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Zone Plan
Park Elektrik
March 2012
16
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 135 MW.
Annual production amount in Silopi is around 450,000 currently and is subject to
increase from 2014 onwards in line with capacity expansion of Silopi EUAS. With
the expansion, annual asphaltite production will be tripled.
Park Elektrik has a profit margin of 15% on its asphaltite sales based on recently
renewed contract by two companies. The contract will be valid as long as Silopi
Elektrik runs the operations.
The 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”.
Park Elektrik
March 2012
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Open-Pit Mining in Silopi
Park Elektrik
March 2012
18
IV.
Park Elektrik
Planned Investments
March 2012
19
Diyarbakır HPP
Installed capacity will be 50.5 MW.
Production license is valid for 49 years.
Estimated investment amount is US$ 60 mn according to initial
feasibility studies.
Park Elektrik
March 2012
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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.
Park Elektrik
March 2012
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V.
Park Elektrik
Financial Structure
March 2012
22
Annual Concentrate (dmt) & Cathode (ton) Sales
60,931
59,163
55,054
47,417
32,239
9,271
1,210
2006
2007
2008
2009
2010
2011
* In 2010, there was a production halt of four months.
** Cathode copper sales realized for the first time in 3Q11.
*** 17.268 wmt concentrated copper were used to produce 2829 mt copper cathode.
Park Elektrik
March 2012
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Annual Asphaltite Sales (ton)
476.899
434.333
204,856*
2009
2010
2011
* Asphaltite operations started in mid 2009.
Park Elektrik
March 2012
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Total Sales Revenues* (TL)
copper
asphaltite
2007
2008
2009
151.135.664
19.314.397
64.191.660
8.211.605
69.857.081
110.713.833
80.040.645
19.709.514
2010
2011*
*Revenues from other sales is 1.676.016 TL
Park Elektrik
March 2012
25
Net Earnings (TL mn)
100.8
74.8
37.2
19.8
2007
Park Elektrik
19.4
2008
2009
March 2012
2010
2011
26
Breakdown of COGS, as of YE11
Raw Materials
3%
Maintanence
5%
Machinery Rent
Costs
7%
Labor Costs
27%
Depreciation
10%
Fuel & Energy
17%
Park Elektrik
Machinery Spare
Part Repl. Costs
20%
March 2012
27
Annual Margin Comparison
(TL mn)
2007
2008
2009
2010
2011
Sales
Gross Profit
Gross Margin
EBITDA
EBITDA Margin
Net Earnings
Net Margin
80
47
59%
43
52%
20
25%
111
73
66%
62
56%
75
68%
79
32
41%
24
30%
19
25%
84
44
52%
42
50%
37
44%
173
107
62%
112
65%
101
58%
Park Elektrik
March 2012
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Sources of Financing (TL mn)
Shareholders' Equity
Total Debt
41
33
30
60
66
8
53
443
302
343
223
88
14
100
130
143
2004
2005
2006
2007
2008
2009
2010
2011
* Park Elektrik has no financial debt.
Park Elektrik
March 2012
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VI. Evaluation of 2011 Financial Results
Park Elektrik
March 2012
30
Evaluation of 2011 Financial Results
In 2011, Park Elektrik’s product composition changed by including cathode
copper into its product range for the first time. The copper cathode
production reached 2829 Mt by the end of the year. In 2011, company’s
concentrated copper production in wmt increased by 107% as compared to
the previous year. Concentrated copper sales were realized as 71% increase
in dmt, y-o-y, as some amount of concentrated copper was utilized for
cathode copper production of 2829 mt in 2011. 1210 mt of the cathode
copper has been sold by the end of 2011.
Revenues from total sales more than doubled under the effect of the capacity
expansion, previous year’s mine strike and soared copper prices.
The company also had TL15mn of other operational income due to its
realized contract in London Metal Exchange.
Park Elektrik
March 2012
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Production & Sales Amount
2010
2011
%
37,426
77,510
107%
-
2,829
nm
476,899
434,333
-9%
2010
2011
%
32,239
55,054
71%
-
1,210
nm
476,899
434,333
-9%
Production
Concentrated Copper (wmt)
Cathode Copper (MT)
Asphaltite (ton)
Sales
Concentrated Copper (dmt)
Cathode Copper (MT)
Asphaltite (ton)
Park Elektrik
March 2012
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Sales Breakdown (TL) & Gross Margin by Products
2010
2011
%
64,191,660
151,135,664
135
59%
68%
-
19,314,397
19,709,514
2
29%
20%
-
288,210
1,676,016
481
Total Sales Revenues
83,794,267
172,521,194
106
Overall Gross Margin
52%
62%
-
Copper Sales
Gross Margin of Copper
Asphaltite Sales
Gross Margin of Asphaltite
Other Sales
Park Elektrik
March 2012
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Income Statement (TL)
S a le s
COGS
G ro s s P ro fit
G ro s s M a rg in
M a rk e tin g S e llin g & D is t. E xp .
G e n e ra l A d m . E xp e n s e s
O th e r O p e ra tin g In c o m e
O th e r O p e ra tin g E xp e n s e s
O p e ra tin g In c o m e
O p e ra tin g M a rg in
N e t F in a n c ia l In c o m e /E xp
P ro fit B e fo re T a x
Tax
N e t P ro fit
N e t M a rg in
E B IT D A
E B IT D A M a rg in
Park Elektrik
2010
8 3 ,7 9 4 ,2 6 7
-4 0 ,1 7 6 ,7 7 6
4 3 ,6 1 7 ,4 9 1
52%
-5 ,4 3 8 ,0 1 4
-1 2 ,6 5 3 ,2 4 3
3 ,8 5 8 ,6 5 5
-6 ,6 3 5 ,8 6 7
2 2 ,7 4 9 ,0 2 2
27%
2 2 ,8 7 8 ,6 2 0
4 5 ,6 2 7 ,6 4 2
-8 ,4 5 9 ,2 6 5
3 7 ,1 6 8 ,3 7 7
44%
4 1 ,5 1 8 ,0 3 1
50%
March 2012
2011
1 7 2 ,5 2 1 ,1 9 4
-6 5 ,6 1 5 ,4 7 8
1 0 6 ,9 0 5 ,7 1 6
62%
-8 ,9 9 0 ,0 4 6
-1 7 ,3 4 4 ,7 3 7
1 6 ,0 4 2 ,7 8 0
-3 ,3 2 5 ,5 5 7
9 3 ,2 8 8 ,1 5 6
54%
3 2 ,9 4 6 ,8 4 5
1 2 6 ,2 3 5 ,0 0 1
-2 5 ,3 3 9 ,2 9 0
1 0 0 ,8 9 5 ,7 1 1
58%
1 1 2 ,2 7 0 ,5 2 6
65%
%
106%
63%
145%
65%
37%
316%
-5 0 %
310%
44%
177%
200%
171%
170%
34
Margins
(%)
2010
2011
Gross Profit Margin
52
62
Operational Profit Margin
27
54
EBITDA Margin
50
65
Net Profit Margin
44
58
Park Elektrik
March 2012
35
Summary Balance Sheets (TL)
2010
2011
273,410,595
297,678,924
96,996,526
186,424,631
370,407,121
484,103,555
Short Term Liabilities
23,590,464
34,255,807
Long Term Liabilities
4,255,816
6,391,196
Shareholders Equity
342,560,841
443,456,552
TOTAL LIABILITIES
370,407,121
484,103,555
Current Assets
Fixed Assets
TOTAL ASSETS
Park Elektrik
March 2012
36
Corporate Governance Rating
Park Elektrik was rated with 8.67 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.
Park Elektrik
March 2012
37
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]
[email protected]
www.parkelektrik.com.tr
www.cinergroup.com.tr
Park Elektrik
March 2012
38