%PDF-1.3 - Park Elektrik

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Park Elektrik Üretim Madencilik
Sanayi ve Ticaret A.Ş.
January 25, 2013
Contents
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Park Elektrik Overview
Ciner Group in Brief
Operations
Reserves
Planned Investments
Financial Structure
Evaluation of The Latest Financial Tables
Corporate Governance Rating
Park Elektrik Madencilik
January 2013
3
7
10
13
20
24
33
39
2
I.
Park Elektrik Overview
Park Elektrik Madencilik
January 2013
3
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 Madencilik
January 2013
4
Ownership Structure
Others
32%
Park Holding
61%
Turgay Ciner
7%
Park Elektrik Madencilik
January 2013
5
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 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.
Park Elektrik Madencilik
January 2013
6
II.
Ciner Group in Brief
Park Elektrik Madencilik
January 2013
7
Ciner Group, Main Line of Businesses
Ciner Group
Ciner Yayın Holding
Park Holding
Energy & Mining
Group
Commerce,
Industry &
Services Group
Major Companies
Park Elektrik, Park
Termik, Silopi Elektrik,
Park Teknik, Park
Toptan, Eti Soda,
Kazan Soda, Park
Cam, TMC
Major Companies
Ciner Marine,
Ciner Aviation,
Lares Park Hotels,
Park Insurance,
Denmar Logistics,
UCZ Retail Chain
Park Elektrik Madencilik
January 2013
Media
Group
Major Companies
& Brands
Haberturk Newspaper
Haberturk TV, Radio,
Haberturk Web Site
Bloomberg HT
8
Ciner Group, Introduction
 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.
Park Elektrik Madencilik
January 2013
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III.
Operations
Park Elektrik Madencilik
January 2013
10
Park Elektrik’s Existing & Planned Facilities
Natural Gas
Power Plant
Edirne
Copper Mine
Siirt
HPP
Natural Gas
Power Plant
Adana
Park Elektrik Madencilik
January 2013
Diyarbakır
Asphaltite
Mine
Sırnak
11
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 5.1 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 latest reserve 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 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 international
commodity brokers.
Park Elektrik Madencilik
January 2013
12
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.
R e s o u rc e C a te g o ry
M e a s u re d
In d ic a te d
T o ta l M e a s u re d & In d ic a te d
In fe rre d
P ro je c t's T o ta l R e s o u rc e s
T onnes
C u (% )
3 1 ,1 8 2 ,0 0 0
6 ,4 3 3 ,0 0 0
3 7 ,6 1 5 ,0 0 0
2 ,2 0 6 ,0 0 0
3 9 ,8 2 1 ,0 0 0
2 .2 6
2 .7 9
2 .3 4
3 .3 8
2 .4 0
Source: JORC Resource Estimate Report by Micromine
Park Elektrik Madencilik
January 2013
13
Capacity Expansion & Condemnation
Concentration Facility
Ore Processing Capacity (ton)
2011
2012
2013
750,000
1,200,000
1,800,000
* Capacity increase to 1,2 mn tons was realized in October 2011.

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 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 a
planned investment amount of Euro 3.5-4mn.

Condemnation process around open pit mine will continue in 2013 in line with the
mining technological needs.
Park Elektrik Madencilik
January 2013
14
2012 Production Targets & Realizations by 9M12
J AN .
Ac tu a l
FEB.
Ac tu a l
M AR .
Ac tu a l
AP R .
Ac tu a l
M AY
Ac tu a l
JUNE
Ac tu a l
JULY
AU G .
SEP.
O C T.
Ac tu a l
Ac tu a l
Ac tu a l
T a rg e t
NOV.
T a rg e t
DEC.
T O T AL
T a rg e t
T a rg e t
O re (w m t)
1 0 0 ,1 9 1
8 4 ,9 1 2
9 6 ,1 4 8
1 0 2 ,1 2 7
1 0 4 ,0 1 4
1 0 2 ,2 3 2
9 1 ,2 6 6
7 5 ,6 5 5
9 5 ,5 2 4
9 4 ,0 0 0
9 3 ,0 0 0
1 0 6 ,0 0 0
1 ,1 4 5 ,0 6 9
O re (d m t)
9 5 ,1 8 1
8 0 ,6 6 6
9 1 ,3 4 0
9 7 ,0 2 0
9 8 ,8 1 3
9 7 ,2 0 6
8 6 ,7 0 3
7 1 ,8 7 2
9 0 ,7 4 8
8 9 ,3 0 0
8 8 ,3 5 0
1 0 0 ,7 0 0
1 ,0 8 7 ,8 9 9
C o n . C o p p e r (w m t)
7 ,8 8 8
6 ,8 7 9
7 ,8 7 7
7 ,8 7 4
7 ,7 7 8
8 ,5 5 6
7 ,4 7 4
6 ,0 5 4
7 ,6 8 0
7 ,4 4 0
7 ,0 0 0
7 ,5 0 0
9 0 ,0 0 0
C o n . C o p p e r (d m t)
7 ,2 5 7
6 ,3 2 8
7 ,2 4 7
7 ,2 4 4
7 ,1 5 6
7 ,8 6 9
6 ,8 7 6
5 ,5 7 0
7 ,0 6 6
6 ,8 4 5
6 ,4 4 0
6 ,9 0 0
8 2 ,7 9 7
w m t: w e t m e tric to n
d m t: d ry m e tric to n

Park Elektrik Madencilik aims 90,000 wmt of concentrated copper production for
the YE2012. This amount implies 17% unit growth for 2012 as compared to
previous year’s production volume of 77,510 wmt.
Park Elektrik Madencilik
January 2013
15
Production Targets
Ore (tons)
Growth
Concentrated Copper (wmt)
Growth
Park Elektrik Madencilik
2011A
2012E
2013E
949,731
1,200,000
1,500,000
-
27%
25%
77,510
90,000
105,000
-
17%
17%
January 2013
16
Shift To Open Pit Mining & Stripping Expenses

Park Elektrik plans to shift its copper mining operations from underground to
open-pit mining by the mid of 2013, while until mid of the year underground
mining will continue.

Based on projections, production through open pit mining will continue until the
end of 2025 for thirteen years in two phases.

Regarding this shift, the company started stripping in the copper zone by
subcontractors. The planned stripping cost for 2013 is TL 82mn.
Park Elektrik Madencilik
January 2013
17
2013 Estimated Capex In Copper Zone
CAPEX
TL mn
ORE PRODUCTION
88
- Stripping
82
- Others
6
FACILITY
30
OTHER
26
TOTAL
144
Park Elektrik Madencilik
January 2013
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”.
Park Elektrik Madencilik
January 2013
19
Open-Pit Mining in Silopi
Park Elektrik Madencilik
January 2013
20
IV.
Planned Investments
Park Elektrik Madencilik
January 2013
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.

The compay plans to start HPP investment in the second half of 2013 with an
estimated investment amount of TL27mn for 2013.
Park Elektrik Madencilik
January 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.
*The technological advances took place since the application to EMRA allow us to reach max. 570 MW in one unit.
Park Elektrik Madencilik
January 2013
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 Madencilik
January 2013
24
V.
Financial Structure
Park Elektrik Madencilik
January 2013
25
Annual Concentrated Copper Production (wmt)
90,000
77,510
64,371
63,138
52,554
37,426
13,771
2006
2007
2008
2009
2010 *
2011
2012 E
* Annual production declined due to production halt of four-month in 2010.
Park Elektrik Madencilik
January 2013
26
Annual Con. Copper (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.
** 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.
Park Elektrik Madencilik
January 2013
27
Annual Asphaltite Sales (ton)
476.899
434.333
204,856*
2009
2010
2011
* Asphaltite operations started in mid 2009.
Park Elektrik Madencilik
January 2013
28
Total Sales Revenues (TL)
copper
asphaltite
2007
2008
19,314,397
64,191,660
151,135,664
8,211,605
69,857,081
110,713,833
80,040,645
19,709,514
2009
2010
2011*
* Revenues from other sales is 1,616,016.
Park Elektrik Madencilik
January 2013
29
Net Earnings (TL mn)
100.8
74.8
37.2
19.8
2007
Park Elektrik Madencilik
19.4
2008
2009
January 2013
2010
2011
30
Breakdown of COGS, as of YE11
M a inta ne nce ,
O the rs, 1 0 %
4%
M a chine ry R e nt
L a b o r C o sts,
C o sts, 3 %
31%
D e p re cia tio n,
17%
F ue l & E ne rg y,
12%
Park Elektrik Madencilik
M a ch. S p a re
P a rt R e p l.
C o sts, 2 4 %
January 2013
31
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 Madencilik
January 2013
32
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 Madencilik
January 2013
33
VI. Evaluation of 9M12 Financial Results
Park Elektrik Madencilik
January 2013
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.
Park Elektrik Madencilik
January 2013
35
Production & Sales Amount
Production
Concentrated Copper (wmt)
Cathode Copper (MT)
Asphaltite (ton)
Sales
Concentrated Copper (dmt)
Cathode Copper (MT)
Asphaltite (ton)
Park Elektrik Madencilik
9M11
9M12
%
57,355
68,060
19
1,846
902
-52
318,177
226,256
-29
9M11
9M12
%
43,044
54,225
26
1,210
2,521
109
318,177
226,256
-29
January 2013
36
Sales Breakdown (TL) & Gross Margin by Products
9M11
9M12
%
122,768,872
175,925,695
44
64%
58%
-
14,087,542
18,707,416
33
20%
14%
-
1,283,988
4,650,991
263
Total Sales Revenues
138,140,402
199,284,102
45
Overall Gross Margin
60%
52%
-
Copper Sales
Gross Margin of Copper
Asphaltite Sales
Gross Margin of Asphaltite
Other Sales
Park Elektrik Madencilik
January 2013
37
Income Statement (TL)
Sales
COGS
Gross Profit
Gross Margin
Marketing Selling & Dist. Exp.
General Adm. Expenses
Other Operating Income
Other Operating Expenses
Operating Income
Operating Margin
Financial Income
Financial Expenses
Profit Before Tax
Tax
Net Profit
Net Margin
EBITDA
EBITDA Margin
Park Elektrik Madencilik
9M11
138,140,402
-56,182,544
81,957,858
59%
-6,404,496
-11,684,286
15,706,474
-2,311,163
77,264,387
56%
30,055,772
-3,032,659
104,287,500
-20,590,027
83,697,473
61%
86,948,021
63%
January 2013
9M12
199,284,102
-95,927,254
103,356,848
52%
-9,689,055
-11,772,337
10,693,269
-2,921,015
89,667,710
45%
24,732,414
-6,721,677
107,678,447
-19,988,158
87,690,289
44%
127,013,775
64%
%
44%
71%
26%
51%
1%
-32%
26%
16%
-18%
122%
3%
-3%
5%
46%
38
Summary Balance Sheets (TL)
YE11
9M12
Current Assets
297,678,924
288,657,504
Fixed Assets
186,424,631
188,986,340
TOTAL ASSETS
484,103,555
477,643,844
Short Term Liabilities
34,255,807
40,499,192
Long Term Liabilities
6,391,196
5,997,811
Shareholders Equity
443,456,552
431,146,841
TOTAL LIABILITIES
484,103,555
477,643,844
Park Elektrik Madencilik
January 2013
39
Corporate Governance Rating
Park Elektrik was rated with 8.82 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 Madencilik
MAIN SECTIONS: Avg. 88,24
Board Of Directors
78.77
Stakeholders
89.86
Public Disclosure &
Transparency
94.75
87.62
Shareholders
0
January 2013
20
40
60
80
100
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
[email protected]
[email protected]
www.parkelektrik.com.tr
www.cinergroup.com.tr
Park Elektrik Madencilik
January 2013
41
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