Park Elektrik Üretim - PowerPoint Presentation

1. Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.January 2014

2. 2ContentsI. Company & Operations 3Planned Investments 18Ownership Structure & Participation 22Ciner Group 25V. Financial Structure 28VI. Evaluation of The Latest Financial Tables 37VII. Corporate Governance Rating 43Park ElektrikJanuary 2014Park Elektrik Madencilik

3. Park Elektrik3I. Company & Operations3January 2014Park Elektrik Madencilik

4. Park Elektrik4IntroductionInitially 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. 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. 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. 5Park Elektrik’s Existing & Planned FacilitiesAsphaltite MineSırnakNatural Gas Power PlantAdanaCopper MineSiirtHPPDiyarbakırNatural Gas Power PlantEdirneJanuary 2014Park Elektrik Madencilik

6. 6I) Madenköy Copper ZonePark 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 7 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 a reserve report issued by Micromine Consulting Services in November 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

7. Park Elektrik7Micromine Reserve Report Based On JORCAccording 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 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. Current grade in the zone is lower, at 1.8-1.9% levels in average. Source: JORC Resource Estimate Report by Micromine7January 2014Park Elektrik Madencilik

8. Park Elektrik8Capacity Expansion & CondemnationIn parallel with growing reserves in the Madenkoy copper zone, the company increased its concentration facility’s capacity from 750k to 1.2 mn tons of ore processing as of October 2011. Total capex for this investment was Euro 3.5mn. Furthermore, Park Elektrik has completed it’s second phase of capacity expansion project to 1.8 mn tons of ore processing by December 2012 with an investment amount of Euro 3.5 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. 8January 2014Park Elektrik MadencilikConcentration Facility201120122013Ore Processing Capacity (ton)750,0001,200,0001,800,000* Capacity increase to 1,2 mn tons was realized in October 2011.

9. Park Elektrik9Production Volumes & Targets9January 2014Park Elektrik Madencilik201120122013E2014 E2015EOre (tons, wet) 973,6281,213,0131,500,0001,600,0001,500,000Growth%9625%24%%7-%6Concentrated Copper (wmt)77,51089,253105,000105,000115,000Growth107%15%18%-%10

10. Park Elektrik10Shift To Open Pit Mining & Stripping ExpensesHaving being operated 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 2013-2030 for 17 years. Regarding this shift, the company started pre-stripping in Madenköy copper zone by subcontractors. Pre-stripping of 13 mn m3 from mid of 2012 until mid of 2013 costed TL65 mn. Including pre-stripping, total planned stripping cost for 2013 is TL 82mn. 10January 2014Park Elektrik Madencilik

11. Park Elektrik112013 Estimated Expenses In Copper Zone 11January 2014Park Elektrik MadencilikExpensesTL mn ORE PRODUCTION88- Stripping 82- Others 6FACILITY30OTHER26TOTAL 144

12. 12January 2014Park Elektrik MadencilikOpen Pit Site View

13. 13January 2014Park Elektrik MadencilikMain Ore BodyTopographyOpen Pit Topographic View – I

14. 14January 2014Park Elektrik MadencilikOpen Pit Topographic View - IIMain Ore Body

15. 15January 2014Park Elektrik MadencilikOpen Pit Site Intersection

16. 16II) Silopi Asphaltite ZoneAsphaltite 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

17. 17Open-Pit Mining in SilopiJanuary 2014Park Elektrik Madencilik

18. 18II. Planned InvestmentsJanuary 2014Park Elektrik Madencilik

19. 19Diyarbakır HPPJanuary 2014Park Elektrik MadencilikInstalled 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.

20. 20Ceyhan Natural Gas Power PlantPark 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.

21. Park Elektrik21Edirne Natural Gas Power PlantPark 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.21January 2014Park Elektrik Madencilik

22. 22III. Ownership Structure & ParticipationPark ElektrikJanuary 2014Park Elektrik Madencilik

23. Park Elektrik23Ownership Structure23January 2014Park Elektrik Madencilik

24. Park Elektrik24Participation, Park TermikPark 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.24January 2014Park Elektrik Madencilik

25. 25IV. Ciner GroupPark ElektrikJanuary 2014Park Elektrik Madencilik

26. Park Elektrik26Ciner Group, Main Line of Businesses Energy & Mining Group Ciner GroupMediaGroupCommerce, Industry & Services GroupMajor Companies & BrandsHaberturk NewspaperHaberturk TV, Radio,Haberturk Web SiteBloomberg HT, Aks TV (Show TV) Major CompaniesCiner Marine,Ciner Aviation,Lares Park Hotels,Park Insurance,Denmar Logistics,UCZ Retail ChainPark HoldingCiner Yayın HoldingMajor CompaniesPark Elektrik, Park Termik, Silopi Elektrik, Park Teknik, Park Toptan, Eti Soda, Rio Tur Soda, Park Cam26January 2014Park Elektrik Madencilik

27. 27Ciner 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

28. 28V. Financial StructureJanuary 2014Park Elektrik Madencilik

29. Park Elektrik29Annual Concentrated Copper Production (wmt) * Annual production declined due to production halt of four-month in 2010. 29January 2014Park Elektrik Madencilik

30. 30Annual 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

31. Park Elektrik31Annual Asphaltite Sales (ton)* Asphaltite operations started in mid 2009.31January 2014Park Elektrik Madencilik

32. 32Total Sales Revenues (TL) January 2014Park Elektrik Madencilik

33. Park Elektrik33Net Earnings (TL mn)33January 2014Park Elektrik Madencilik

34. 34Breakdown of COGS, as of YE12January 2014Park Elektrik Madencilik

35. 35Annual Margin Comparison(TL mn)20082009201020112012Sales1117984173265Gross Profit733244107134Gross Margin66%41%52%62%51%EBITDA622442112165EBITDA Margin56%30%50%65%62%Net Earnings751937101107Net Margin68%25%44%58%40%January 2014Park Elektrik Madencilik

36. 36Sources of Financing (TL mn)* Park Elektrik has no financial debt. January 2014Park Elektrik Madencilik

37. 37VI. Evaluation of 9M13 Financial ResultsJanuary 2014Park Elektrik Madencilik

38. 38Evaluation 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

39. 39Production & Sales AmountProduction9M129M13%Concentrated Copper (wmt)68.06075.08410.3%Cathode Copper (MT)902*-nm.Asphaltite (ton)226.256249.14210.1%Sales9M129M13%Concentrated Copper (dmt)54.22574.26137%Cathode Copper (MT)2.521**-nmAsphaltite (ton)226.256249.14210.1%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.

40. 40Sales Breakdown (TL) & Gross Margin by Products9M129M13%Copper Sales 175.925.695175.484.942-0,3%Gross Margin of Copper 57%34% Asphaltite Sales 18.707.41625.626.49837,0%Gross Margin of Asphaltite 14%13% Other Sales 4.650.991684.421-85,3%Total Sales Revenues 199.284.102201.795.8611,3%Overall Gross Margin 52%31% January 2014Park Elektrik Madencilik

41. 41Income Statement (TL) January 2014Park Elektrik Madencilik9M12 9M13Chg. Sales199.284.102201.795.8611%COGS-95.927.254-139.318.97245%Gross Profit103.356.84862.476.889-40%Gross Margin52%31%R&D Expenses0-58.550-Marketing, Sales, Distribution Exp.-9.689.055-10.399.6027%General Adm. Expenses-11.790.410-14.638.26824%Other Operating Income30.244.25439.194.22430%Other Operating Expenses-9.466.270-11.393.36220%Operating Income102.655.36765.181.331-37%Operating Margin52%32%Financial Income5.140.4296.104.74719%Financial Expenses-117.349-437.276273%Profit Before Tax107.678.44770.848.802-34%Tax-19.988.158-12.960.720-35%Net Profit87.690.28957.888.082-34%Net Margin44%29%EBITDA140.001.432118.106.163-16%EBITDA Margin70%59%

42. 42Summary Balance Sheets (TL)20129M13Current Assets296,579,212321,597,173Fixed Assets206,692,571252,187,794TOTAL ASSETS503,271,783573,784,967Short Term Liabilities32,226,89243,756,302Long Term Liabilities20,574,73421,168,700Shareholders Equity450,470,157508,859,965TOTAL LIABILITIES503,271,783573,784,967January 2014Park Elektrik Madencilik

43. 43VII. Corporate Governance RatingJanuary 2014Park Elektrik Madencilik

44. 44Corporate 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

45. 45T H A N K Y O U. CONTACTSYesim Bilginturan Selim ErdoganIR Manager IR ManagerPhone: +90 216 531 25 33 +90 216 531 25 35y.bilginturan@cinergroup.com.tr s.erdogan@cinergroup.com.tr www.parkelektrik.com.tr www.cinergroup.com.tr January 2014Park Elektrik Madencilik