Aksa Enerji Uretim A.s. · BIST:AKSEN

Aksa Enerji Uretim A.s — Q1 2017 Earnings Presentation

48 slides from Aksa Enerji Uretim A.s's earnings presentation, May 2017

  1. Slide 1: 1Q2017 Investor Presentation

    1Q2017 Investor Presentation May 2017

  2. Slide 2: Key investment highlights

    Key investment highlights 1 Part of a dedicated energy group 2 Largest quoted Independent Power Producer (IPP) in Turkey 3 Strong exposure to growing Turkish electricity market 4 Large portfolio with 12 operational assets totalling 2,279 MW 5 Diversified pipeline of 3 projects adding 337 MW to our p

  3. Slide 3: Part of a dedicated energy group

    Part of a dedicated energy group  Entered energy business in 1960s with the production of generating sets  Focused only on the energy sector since then  Gradually expanded into main segments of electricity & natural gas Kazancı Group  Excellent track record in building and integrating energy bus

  4. Slide 4: The largest quoted IPP in Turkey with 2,279 MW installed capacity

    The largest quoted IPP in Turkey with 2,279 MW installed capacity IPPs by Installed Capacity 3.600 3.145 2.279 (MW) 1.665 1.490 1.224 952 700 392 364 Enerjisa Limak Aksa Enerji İÇDAŞ Eren Enerji Akenerji Cengiz Enerji Zorlu Enerji Ayen Enerji AES Entek Source: Information obtained from each IPP’s an

  5. Slide 5: Structure of Turkish electricity market

    Structure of Turkish electricity market 1 Strong Electricity Demand Growth (1) 2 Increasing per Capita Consumption (2) High TWh MWh/pa Demand 500 Scenario 9 CAGR – High Demand: 7.7% 463 450 8 400 Low 7 350 381 Demand 275 Scenario 6 300 250 CAGR – Low Demand: 4.7% 5 CAGR: 5.3% 200 4 8,0 150 141 3 5,9

  6. Slide 6: 11 assets under operation across Turkey, 1 in Ghana

    11 assets under operation across Turkey, 1 asset under operation in Ghana* 1 KIYIKÖY 11 27 MW BOLU-GÖYNÜK 270 MW ÇORUM-İNCESU 10 15 MW 2 BALIKESİR KAPIDAĞ 24 MW 3 BALIKESIR ŞAMLI 114 MW Total 2,086 MW 4 MANISA KARAKURT 11 MW 5 MANISA 115 MW 9 6 ŞANLIURFA ANTALYA 147 MW 1,150 MW 7 NORTHERN CYPRUS 153

  7. Slide 7: Assets with key specifications to fortify Company strategy

    Assets with key specifications to fortify Company strategy Baseload Natural Gas Fired PP – Antalya Wind Farms  Located in a favorable wind corridor  One of the most efficient CCGT with high load factors plants in Turkey, with a capacity of  5 farms, with a total capacity of 236 1,150 MW with Siem

  8. Slide 8: Pipeline of 3 international projects adding 530 MW

    Pipeline of 3 international projects adding 530 MW to our portfolio Current Installed Total Installed Pipeline Capacity Capacity 530 MW 2.639 MW 15 MW 259 MW 3 HFO HFO 530 MW 2,109 MW 270 MW 1.412 MW 683 MW 2016 Under Construction 2017 Fuel-oil Natural Gas Lignite Wind Hydro 7

  9. Slide 9: Significant profit improvement with HFO pipeline

    Significant profit improvement with HFO pipeline Realised Capacity Increases in Renewables & Lignite (MW) MW 10% 12% 20% 26% MWh (+) 530 MW HFO 2.7x 600 4000 3500 500 3000 400 270 2500 135 Installed 300 2000 15 15 Sales Capacity 15 1500 200 15 (GWh) (MW) 1000 239 259 259 100 188 500 20.000 0 0 2013

  10. Slide 10: Company Highlights - Cost Structure (TL)

    Company Highlights - Cost Structure (TL) Cost Structure vs. Sales Price (FY2016) Improving Lower Cost Output % of Weighted Avg. Weighted Avg. Renewables Cost 151 Sales Price 175 Local 61% 72% Sourcing TL/MWh 200 18,028 GWh 181 146 142 22,8 160 32,7 127 12,258 GWh 100 10.608 59% 120 15,4 variable 72%

  11. Slide 11: Company Highlights - Sales mix and prices (TL)

    Company Highlights - Sales mix and prices (TL) Capacity 44% 43% ( Utilization TWh 20 18 TWh 19 18 Balancing Market Sales 17 to BSM 1,75 BSM 10% 16 Northern Cyprus 15 14 OTC & Bilateral 13 12 11 10 9 Total 90% Contracted 8 Contracted 16,28 7 4.23.6 TWh 6 Sales 3.6 5 4 86% BSM 3 2 Contracted 0.60.6 1

  12. Slide 12: Shifting bilateral mix towards more profitable commercial clients

    Shifting bilateral mix towards more profitable commercial clients Increasing Contracted Volume Supported by Evolution of Eligibility Limit Affiliated Distribution Regions 1.5x # of Bilateral 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 245 610 1,275 24,987 85,987 125,91

  13. Slide 13: Increased efficiencies at CCGT plants and declining OPEX

    Increased efficiencies at CCGT plants and declining OPEX to improve cost base Low Unit Capex Improving Fuel Efficiency US$m/MW TL/MWh 56% 180 54% CCGT 0,4 160 52% Wind 1,4 140 50% 48% 120 Lignite 1,5 46% 100 44% Hydro 1,6 80 42% 2010 2011 2012 2013 2014 2015 0,0 0,5 1,0 1,5 2,0 Natural Gas Cost (TL/

  14. Slide 14: Corporate Bond Issue - Short term FX debt refinanced in TRY

    Corporate Bond Issue- Short term FX debt refinanced in TRY 18/11/2015 28/06/2016 TRSAKSNK1714 TRSAKSN61815 TRSAKSN61914 TRY 135,000,000 TRY 60,000,000 TRY 140,000,000 728 days (2 years) 729 days (2 years) 1093 days (3 years) Variable interest Variable interest Variable interest Due to high demand, t

  15. Slide 15: African Projects

    AaAKSa African Projects “TURKEY: 1813 MW ~ COM GCGT, EPP, WEPP,HFO “ & ORTHERN CYPRUS MADAGASCAR HFO PLANT 120 MW

  16. Slide 16: GHANA – Fast Track USD Based Cash Generation

    GHANA – Fast Track USD Based Cash Generation  Became operational at the end of March with 192.5MW  2017E production: 1.45 TWh  Minimum 320 MW installed  2018E production: 2.5 TWh capacity by YE2017  Option to go up to 370 MW by YE2018  2017E EBITDA: USD 112mn  15% of consumption in the countr

  17. Slide 17: MADAGASCAR

    MADAGASCAR  Advance payment ($3mn) and 3 months operational revenue guarantee ($9 mn) to be received  Guaranteed sales of 900,000 MWh/year when fully operational with 120MW.  66 MW to be commissioned by the end of August 2017  54 MW (phase 2) to be aligned with construction of transmission lines

  18. Slide 18: MALI

    MALI  Land, fuel supply, licenses and permits are provided by Énergie du Mali  Projected generation: up to 240 million KWh per year  €4mn mobilisation fee is received  €1.6mn payment guarantee is received  Full comissioning in July- August  2017E production: 0,1 TWh  2018E production: 0,24 TW

  19. Slide 19: TURKEY & AFRICA

    TURKEY & AFRICA  In 2017, African revenues are expected to make up 29% of consolidated revenues, bearing in mind that African PPs will only be fully contributing to consolidated figures in 4Q17.  However, African PPs will be making up 75% of EBITDA in 2017. REVENUE EBITDA TURKEY AFRICA TURKEY AFRI

  20. Slide 20: TURKEY & AFRICA

    TURKEY & AFRICA  Energy sales volumes in Turkey in 2017 constitute 90% of total sales with 15.3 TWh.  However, EBITDA created from Turkey only represents 25% of total EBITDA as African PPs’ margins are significantly higher. TRY MWh 600.000.000 16.000.000 14.000.000 500.000.000 12.000.000 400.000.0

  21. Slide 21: TURKEY & AFRICA - Solid Growth in Consolidated EBITDA

    TURKEY & AFRICA- Solid Growth in Consolidated EBITDA USD mn EBITDA  EBITDA will see a sharp increase YoY in USD terms 47% 275 300,0 in two consecutive years 30% 250,0 due to high margin sales 187 from African PPs. 200,0 157 163 144 150,0  2018 EBITDA will see further solid growth due to 100,0 full

  22. Slide 22: ASSET SALE

    ASSET SALE

  23. Slide 23: 313 MW Asset Sale – USD 348 mn

    313 MW Asset Sale – USD 348 mn 81 MW HES 232 MW RES Kozbükü Sebenoba, Karakurt, Şamlı, Ayvacık, (completed in 4Q 2016) Kapıdağ, Belen/Atik USD 89 mn USD 259 mn USD 55 mn bank loans to be paid off USD 120 mn bank loans to be paid off Out of 232 MW, two RES’ sale have been completed, reaching USD 35.5

  24. Slide 24: 2017 GUIDANCE

    2017 GUIDANCE

  25. Slide 25: 2017 GUIDANCE

    2017 GUIDANCE  Sales: 17 TWh  Revenues: TRY 3.36 bn ($893 mn)  Average Aksa Price: TRY 197 (vs expected average market price of TRY 155)  CAPEX: TRY 293 mn ($78 mn)  EBITDA: TRY 702 mn ($187 mn) 24

  26. Slide 26: 2017 Guidance – Switch to USD Based Cash Generation

    2017 Guidance – Switch to USD Based Cash Generation USD Based EBITDA 89% TRY Based EBITDA N. Cyprus Ghana 11% Madagascar Mali Bolu Antalya Kıyıköy WPP Ş. Urfa Manisa İncesu HEPP 25

  27. Slide 27: 2017 Guidance – Sharp Improvement in Debt Ratio

    2017 Guidance – Sharp Improvement in Debt Ratio Solid EBITDA growth achieved via African PPs along with financial USD mn debt reduction via asset sale 1.200 6,31 7,00 6,05 6,19 results in: 6,00 1.000 5,18 4,22 4,19 5,00  Sharp decline in net 800 3,96 3,23 4,00 financial debt by YE2017 600 1.008 3,0

  28. Slide 28: 2017 Guidance – Share of USD Based EBITDA

    2017 Guidance – Share of USD Based EBITDA 2017E Revenues 2017E EBITDA 34% 82% 66% 18% TRY based USD Based TRY Based USD Based 27

  29. Slide 29: Effect of Asset Sale & USD Based EBITDA Generation

    EFFECT OF ASSET SALE & USD BASED EBITDA GENERATION 3.000 85% 90% 76% 80% 2.742 2.744 2.500 70% 61% 62% 2.000 55% 55% 60% 52% 2.039 1.781 50% 1.500 40% 1.270 1.280 1.306 1.000 1.138 30% 20% 500 10% - 0% 2010 2011 2012 2013 2014 2015 2016 2017E 6.0 4.2 4.0 4.2 5.2 5.8 6.3 2.8 Net Financial Debt/EBITDA

  30. Slide 30: Tailored strategy to create sound and secure profitability

    Tailored strategy to create sound and secure profitability Evolution of Capacity and Sales Mix Total Contracted (1) Total Contracted (1) 14% Shifted strategy Fortifying baseload 23% to become baseload strategy & building cost producer effective pipeline 77% Total Spot (2) 86% Total Spot (2) 2,407 MW

  31. Slide 31: THE SECTOR

    THE SECTOR

  32. Slide 32: Market Highlights - Generation & Consumption

    Market Highlights- Generation & Consumption  Electricity generation increased by %7.9 and consumption increased by 5.9% YoY in 1Q2017. Generation (GWh) Consumption (GWh) 80.000 80.000 71.141 71.010 67.173 65.781 70.000 70.000 60.000 60.000 50.000 50.000 40.000 40.000 30.000 30.000 20.000 20.000 10.

  33. Slide 33: Market Highlights - Installed Capacity Changes

    Market Highlights - Installed Capacity Changes  Total installed capacity in Turkey has  When new and decommissioned capacities are netted off, reached 78.825 MW in 1Q2017, an there is an increase of 1.460 MW in coal & lignite, 619 MW in increase of 4.785 MW, indicating an hydro, 1.284 MW in wind,

  34. Slide 34: Market Highlights - Prices

    Market Highlights - Prices  Weighted average spot price was at 171 TL in 1Q17.  1Q2017 weighted average price was 36% higher YoY due to:  1Q16 setting a very low base (mild weather & very strong renewable production)  natural gas consumption limitations brought upon generation facilities and hea

  35. Slide 35: Financial & Operational Highlights 1Q2017

    FINANCIAL & OPERATIONAL HIGHLIGHTS 1Q2017

  36. Slide 36: 1Q 2017 Results - Snap Shot

    1Q 2017 Results - Snap Shot * Adjusted Adjusted 2013 2014 2015 2016 1Q15 1Q16 1Q17 YoY Change 4Q16 1Q17 QoQ Change Installed Capacity (MW)* 2052 MW 2140 MW 2076 MW 2109 MW 2151 MW 2211 MW 2104 MW -107 MW 2109 MW 2104 MW -5 MW Sales Volume (GWh) 9.109 9.814 14.018 18.028 3.013 4.178 4.676 12% 4.836 4

  37. Slide 37: 1Q 2017 – Sales Breakdown

    1Q 2017– Sales Breakdown * 1Q 2016 2Q 2016 3Q 2016 4Q 2016 1Q 2017 MWh TL/MWh MWh TL/MWh MWh TL/MWh MWh TL/MWh MWh TL/MWh Northern Cyprus 174.808 212,1 176.372 221,5 178.688 279,2 177.138 326,8 179.631 378,4 Renewable Market (YEKDEM) 231.572 214,8 142.760 223,4 227.180 232,1 188.858 274,6 192.332 26

  38. Slide 38: Cost vs Sales Price Against Spot Market Prices

    Cost vs Sales Price Against Spot Market Prices Cost Structure vs. Sales Price (1Q17) Average Sales Price (TL/MWh) Weighted Avg. Cost 140 Weighted Avg. Sales Price 153* TL/MWh 255 Total Contracted Average: 146* 240 39 378 200 170 160 23 266 141 124 120 216 21,9 variable 184 95 17,8 fixed 137 * 80 126

  39. Slide 39: Financial highlights 1Q 2017 Consolidated income statement

    Financial highlights 1Q 2017 Consolidated income statement Net sales & EBITDA (TL mn) 726 738 3.178 EBITDA Margin EBITDA Margin 1Q16: 15.9% 2015: 19.2% (adj) 1Q17: 8,4 % 2.307 2016: 13.7% 116 443 435 62 Net Sales EBITDA Net Sales EBITDA 1Q16 1Q17 2015 2016 Operating income & Net income (TL mn) 296 2

  40. Slide 40: Net financial debt and repayment schedule

    Financial highlights 1Q 2017 Net financial debt and repayment schedule Net financial debt (TL mn) 3.500 89% 100% 85% 90% 3.000 76% 2.985 80% 2.500 61% 62% 2.742 2.744 70% 55% 55% 52% 60% 2.000 50% 1.500 1.781 40% 1.000 1.270 1.280 1.306 30% 1.138 20% 500 10% - 0% 2010 2011 2012 2013 2014 2015 2016 1

  41. Slide 41: Consolidated income statement

    Consolidated income statement (TRY mn) 2014 2015* 2016 1Q 2014 1Q 2015 1Q 2016* 1Q 2017 Net sales 1.957 2.307 3.178 472 353 726 738 Cost of sales -1.711 -1.979 -2.907 -424 -295 -654 -715 0 Gross profit 247 327 271 49 59 72 24 Gross profit margin 13% 14% 9% 10% 17% 10% 3% General & administrative cos

  42. Slide 42: Consolidated balance sheet

    Consolidated balance sheet Assets (TRY mn) 2014 2015* 2016 1Q 2014 1Q 2015 1Q 2016* 1Q 2017 Cash and cash equivalents 34,2 48,5 219,4 127,6 79,1 252,8 6,0 Trade receivables net 88,7 119,8 219,7 115,0 23,8 297,8 262,9 Due from related parties and shareholders 4,4 67,3 59,9 0,0 0,0 0,0 61,1 Inventory

  43. Slide 43: Consolidated statement of cash flows

    Consolidated statement of cash flows (TRY mn) 2014 2015* 2016 1Q 2014 1Q 2015 1Q 2016* 1Q 2017 Net income (loss) before tax 26,6 -221,1 -367,6 -13,9 -105,9 8,7 -88,4 Depreciation and amortisation 121,5 146,6 191,2 29,3 31,7 46,7 44,9 Other adjustments 82,0 195,1 623,9 27,2 117,7 111,9 90,0 Change in

  44. Slide 44: APPENDIX

    APPENDIX

  45. Slide 45: Licence Portfolio (Operational)

    Licence Portfolio (Operational) Power Plant License Owner Fuel Type Installed Capacity (MW) % Northern Cyprus Aksa Cyprus Fuel-oil 153 Ghana Aksa Energy Fuel-oil 193 Total Fuel-Oil fired power plants 346 15% Antalya NGCC Aksa Energy Natural Gas 1.150 Manisa NGCC Aksa Energy Natural Gas 115 Şanlı Urf

  46. Slide 46: Ongoing Investments

    Ongoing Investments Under Construction Power Plant Investment License Owner Fuel Type Capacity (MW) Completion Year Ghana Greenfield Aksa-Ghana HFO 177,5* 2017 Madagascar Greenfield Aksaf Power HFO 120** 2017-2019 Mali Greenfield Aksa HFO 40 2017 530 Total 530 • The above projects will be utilising

  47. Slide 47: Contact- Investor Relations

    Contact- Investor Relations Özlem McCann Director Investor Relations and Corporate Communications Ozlem.McCann@aksa.com.tr +90 216 681 1053 Rüzgarlıbahçe Mah. Özalp Çıkmazı No:10 Kavacık Beykoz, Istanbul 46

  48. Slide 48: Disclaimer

    Disclaimer Aksa Enerji has prepared this presentation for the sole purpose of providing information, which contains forward-looking statements that reflect the Company management’s current views with respect to certain future events. Although it is believed that the expectations reflected in these s

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