Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. November 2015

Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş.

November 2015

2

Contents

I. Company & Operations 3II. Ownership Structure & Participation

18III. Ciner Group 21IV. Financial Structure 24V. Evaluation of The Latest Financial Tables

32VI. Corporate Governance Rating

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Park Elektrik November 2015Park Elektrik Madencilik

Park Elektrik 3

I. Company & Operations

3 November 2015Park Elektrik Madencilik

Park Elektrik 4

Introduction

Park Elektrik is the sole copper mining company on the ISE. The company operates Madenköy copper mine in Siirt, in the southeast of Turkey, since late 2006.

Total resources of Madenköy copper mine was determined as 41.5 mn tons of ore with an average grade of 2,02% according to a JORC based report conducted by Micromine Consulting Services in February 2014. So far, Park Elektrik extracted approximately 9 mn tons of ore out of total resources of 41.5 mn tons in the zone.

The company has a concentration facility and it produces and sells concentrated copper, which is the final product of the company. Park Elektrik sells all of its concentrated copper, that includes copper content of around 20%, to an international commodity broker, namely Traxys.

As of YE2014, total number of employees is 479. 387 employees of total work force are blue collar employees working in the copper mine.


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Location of Copper Mine

Copper Mine

Siirt

November 2015Park Elektrik Madencilik

http://upload.wikimedia.org/wikipedia/en/7/78/Pick_shovel.jpg

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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, approximately 9 mn tons of ore have been extracted in the copper zone, while the remaining resources is 32.5 mn tons of ore.

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 latest reserve report issued by Micromine Consulting Services in February 2014, total resources in the zone was determined as 41.5 mn tons of ore, 36.3 mn tons of which was measured.

Park Elektrik exports all of its concentrated copper production to an international commodity broker namely Traxys, while the end customer is China.


Park Elektrik Madencilik November 2015 7

According to a JORC (Joint Ore Resources Code) compliant reserve report issued by Micromine Consulting Services in February 2014, total resources of the project was determined as 41.5 million tonnes of ore.

According to the same report, average grade in Madenköy copper mine is 2.02% for the whole zone and average grade of the measured resources is 1.95%.

Micromine Reserve Report Based On JORC

Micromine October 2011 Resource Report

Micromine February 2014 Resource Report

Tonnes Grade (%) Tonnes Grade (%)

Measured 31.182.000 2,26 36.264.000 1,95

Indicated 6.439.000 2,79 5.002.000 2,45

Inferred 2.206.000 3,38 225.000 3,52

Total Resources 39.821.000 2,40 41.500.000 2,02

Park Elektrik 8

Production Volumes & Targets


2011 2012* 2013** 2014 2015E

Stripping (m3) - 3,500,292 10,151,224 14,291,281 9,000,000

Ore Production (tons, wet) 1,024,871 1,138,232 1,540,031 1,723,653 1,652,000

Ore Used In Con. Center (tons, dry) 949,731 1,081,320 1,463,029 1,637,470 1,569,400

Grade of Ore (%) 1,73 1,77 1,47 1,18 1,35

Recovery Rate 87% 86% 82% 87% 87%

Con. Copper Production (wmt) 77,510 89,253 96,038 91,185 98,225

Con. Copper (dmt) (~92% of wmt) 71,309 82,113 88,354 83,890 90,367

Copper (mt) (~20% of dmt con. copper) 14,262 16,423 17,670 16,778 18,073

* Pre-stripping started in 2012. ** Production through open-pit started in mid of 2013.

Park Elektrik 9

Long Term Planning in Open Pit

Having being operated by underground mining since the beginning of operations in the Madenköy copper zone, Park Elektrik shifted its copper mining operations from underground to open-pit mining by the mid of 2013. Pre-stripping in the zone started in 2012 and it continued until mid of 2013.

Based on projections, the company plans to continue open pit mining between 2013-2031. Throughout open pit mining for 18 years, the company plans to produce 26.4 mn tons of ore with 246 mn m3 stripping with an average strip ratio of 9.3 by the end of 2031.

2014 was the first full year of open pit mining therefore Park Elektrik had to work with very low grade with a high volume of stripping.

9November 2015Park 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


Open Pit Site View

Current View From Mine


Views From The Pit



Main Ore Body

Topography

Open Pit Topographic View – I


Open Pit Topographic View - II

Main Ore Body


Open Pit Site Cross Section

Power Plant Projects

Withdrew natural gas power plant applications for Edirne and Ceyhan regions due to the complexities of the investment stages and uncertainities.

Obtained environmental impact assessment report for Hydroelectricity power plant (HPP) of 50MW in Diyarbakır/Tarihler. Transmission aggreement with TEIAS was achieved. Tender offer for construction of the facility will be made soon.


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II. Ownership Structure & Participation


Park Elektrik 18

Ownership Structure

Others32%

Turgay Ciner7%

Park Holding61%


Park Elektrik 19

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 2015, Park Elektrik gained approximately TL7mn dividend income from Park Termik which will be reflected in 4Q results.


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III. Ciner Group


Park Elektrik 21

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,

Park Holding Ciner Yayın Holding

Major CompaniesPark Elektrik, Park

Termik, Silopi Elektrik, Park Teknik, Park

Toptan, Eti Soda, Rio Tur Soda, Park Cam


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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.


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IV. Financial Structure


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Annual Concentrated Copper Production (wmt)

* Annual production declined due to production halt of four-month in 2010.


2006 2007 2008 2009 2010 * 2011 2012 2013 2014

13,771

52,55464,371 63,138

37,426

77,510

89,253

96,038

91,185

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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.


2006 2007 2008 2009 2010 2011 2012 2013 2014

9,271

47,417

60,931 59,163

32,239

55,054

73,367

93,049

85,038

1,210 2,521

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Total Sales Revenues (TL)


2007 2008 2009 2010 2011 2012 2013 2014

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

22

6,5

24

,68

6

20

9,9

27

,68

9

8,211,605

19,314,397

19,709,514

30,816,836 33,704,018

11,587,475

copper asphaltite

Park Elektrik 27

Net Earnings (TL mn)


2007 2008 2009 2010 2011 2012 2013 2014

19.8

74.8

19.4

37.2

100.9107.3

69.3

20.5

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Breakdown of Cost of Production, as of YE14, (copper only)


Deprecia-tion65%

Labour12%

Energy4%

Fuel4%

Materials2% Others

12%

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Annual Margin Comparison

(TL mn) 2008 2009 2010 2011 2012 2013 2014

Sales 111 79 84 173 265 261 223

Gross Profit 73 32 44 107 134 72 24

Gross Margin 66% 41% 52% 62% 51% 28% 11%

EBITDA 62 24 42 112 165 147 121

EBITDA Margin 56% 30% 50% 65% 62% 57% 54%

Net Earnings 75 19 37 101 107 70 20

Net Margin 68% 25% 44% 58% 40% 27% 9%


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Sources of Financing (TL mn)

* Park Elektrik has no financial debt.


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

88 100 130 143223

302 343443 450

520 499

814

66 53

60

3033

41 53

6455

Shareholders' Equity Total Debt

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V. Evaluation of 3Q15 Financial Results


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Evaluation of 3Q15 Financial Results

In 3Q15, copper concentrate production was realized as 73.458 wmt indicating a 9% increase as compared to 3Q14. Copper concentrate sales during the same period remained almost the same level as it was last year same term and realized as 62.461 dmt.

The relatively sharp decline in the sales revenues by 22% was due to the lack of asphaltite sales and decreased copper prices. The company had withdrawn from asphaltite business by selling its facility to Silopi Elektrik A.Ş. in 2014.

Financial ratios have all recovered due to the increasing grade levels as well as decreased depreciation costs in the production costs thanks to substantially lower stripping volume.


Production 3Q14 3Q15 %Concentrated Copper (wmt) 67.223 73.458 9%

Sales 3Q14 3Q15 %Concentrated Copper (dmt) 62.558 62.461 -

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Income Statement (TL)


9M14 9M15 %Sales 169.426.777 132.681.618 -22%COGS 149.231.805 104.380.582 -30%Gross Profit 20.194.972 28.301.036 40%

Gross Margin 12% 21%Marketing, Distribution Exp 11.324.172 10.954.776 -3%General Adm. Expenses 21.076.615 12.995.370 -38%Other Operating Income 18.048.580 25.371.553 41%Other Operating Expenses 22.406.446 3.985.143 -82%Operating Income -16.563.681 25.737.300 -255%

Operating Margin -10% 19%Income From Investments 23.526.319 2.006.343 -91%Expense From Investments 304.079 16.032 -95%Income Before Financial Exp. 6.658.559 27.727.611 316%Financial Income 207.265 10.080 -95%Financial Expenses 576.538 618.961 7%Profit Before Tax 6.289.286 27.118.730 331%Tax Income / Expense 12.382.167 -4.141.869 -133%Net Profit 18.671.453 22.976.861 23%

Net Margin 11% 17%

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Summary Balance Sheets (TL)

YE14 1H15

Current Assets 297,365,121 309,450,827

Fixed Assets 255,897,086 267,536,710

TOTAL ASSETS 553,262,207 576,987,537

Short Term Liabilities 38,151,674 130,794,969

Long Term Liabilities 16,434,153 16,004,014

Shareholders Equity 498,676,380 430,188,554

TOTAL LIABILITIES 553,262,207 576,987,537


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VI. Corporate Governance Rating


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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.


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

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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


mailto:[email protected]

mailto:[email protected]

http://www.parkelektrik.com.tr/

http://www.cinergroup.com.tr/

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Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. November 2015