ye18 earnings presentationsegmental analysis 3 mm tl oil segment energy segment shell & turcas...

YE18 Earnings Presentation

30 193 26

37 12 24 19

-200

-100

0

100

200

Turcas KuyucakGeothermal Gross

Profit

Net IncomeContribution of

STAŞ

Management Feesand Usufruct

CertificateRevaluation Gains

Deferred Tax Holding&TurcasKuyucak Opex

Net Loss Impact ofRTG

Net FinancingExpenses & Other(o/w 182 MM TL is

FX losses fromfinancing andoperations)

Turcas Petrol IFRS Consolidated Net Income Bridging (YE18)

Message from Turcas Petrol CEO

1

YE18 General Overview

TP Net Loss

-131 MM TL

• Positive contribution from fuel distribution and geothermal business are

overshadowed by FX losses due to depreciation of TL

• On a quarterly basis, Turcas posted 54 MM TL net income in 4Q18 driven by

107 MM TL FX gains thanks to appreciation of TL against USD and EUR in

4Q18

• Adjusted for the impact of FX losses, Turcas 2018 full year net income would

have been 51 MM TL

At a glance- YE18

2

>1 million daily

visitors via

1,015 fuel stations

88

MM TL Net

Income

3 billion

kWh Generation

53

MM TL EBITDA

80 million

kWh Generation

11.8

USc/kwh Feed -In

Tariff

27

MM TL

EBITDA

Shell & Turcas JV

RWE & Turcas JV

Kuyucak

Geothermal

967

MM TL Net Sales

879

MM TL EBITDA

Segmental Analysis

3

MM

TL

Oil Segment Energy Segment

Shell & Turcas RWE & Turcas TKG

Revenues EBITDA

Net

Income Revenues EBITDA

Net

Income Revenues EBITDA

Net

Income

YE18 32,566 879 88 967 53 -62 46 27 -42

YE17 23,975 961 321 823 79 -13 - n.m. n.m.

88 89

2017 2018

4,170 4,282

2017 2018

757 775

2017 2018

Gasoline Sales (STAŞ) Diesel Sales (STAŞ)

Lubricants Sales (STAŞ) Onsite Market Share (YE18)

4

Shell & Turcas JV – YE18 Key Highlights

Source: PETDER. Market share info EMRA

ths m3

2% y/y 3% y/y

ths m3

ths m3

1% y/y

#1

Shell 19.2%

Opet 17.8%

PO 17.7%

BP 8.8%

Total 4.9%

Aytemiz 4.7%

TP 3.5%

Others 23.3%

23,975

32,566

2017 2018

961 879

2017 2018

Net Sales EBITDA

Net Income Shell & Turcas YE18 Highlights

Source: STAŞ IFRS consolidated financials. EBITDA includes EBIT, depreciation, amortisation and amortisation of prepaid rent expenses

5

Shell & Turcas JV – YE18 Key Highlights

MM TL

MM TL

MM TL

36% y/y

• Sustained above sector volume growth leading to

maintained leadership position

• Net income impacted by i) FX losses from product

sourcing, ii) inventory losses due to oil price

volatility, iii) higher interest expenses on TL

denominated loans due to increase in TL borrowing

rates

• Net Debt / EBITDA at a very healthy level of 0.8x (100%

of debt in local currency)

-8% y/y

321

88

2017 2018

Continuous Cash inflows from Shell & Turcas

6

Dividends & Management Fees & Preferred Dividends Received from Shell & Turcas

MM TL

51

18

45

27 31

45 53 50

26

40

57

24 36

23

14

16 13

16 10

5

7

201820172016201520142013201220112010200920082007

Dividends Received from Shell & Turcas Management Fees and Preferred Dividends Received from Shell & Turcas

823

967

2017 2018

Net Sales EBITDA

RTG Average Electricity Sales Price (TL/MWh)

Source: RWE & Turcas IFRS consolidated financials.

7

RWE & Turcas JV – YE18 Key Highlights

MM TL MM TL

RWE & Turcas YE18 Highlights

17% y/y

• Highest cumulative net sales (967 MM TL) since the start of operations, positively impacted by capacity payments

• 62 MM TL capacity payments realized in YE18

(1Q18: 10 MM TL, 2Q18: 18 MM TL, 3Q18: 14 MM TL, 4Q18: 20 MM TL)

• Gross profit (2018: 26 MM TL, 2017: 31 MM TL) negatively impacted by lower capacity utilization rate despite higher average electricity sales price at RTG

79

53

2017 2018

-33% y/y

180

189

197

186

280

2014 2015 2016 2017 2018

753

581

2017 2018

3.81

3.00

2017 2018

Electricity Generation Cash inflows to Turcas from RWE & Turcas JV

(under SHL repayment)

Gas Consumption Capacity Utilization Rate

Source: RWE & Turcas IFRS consolidated financials. Cash inflows indicate shareholder loan repayments from RWE & Turcas to

Turcas

8

RWE & Turcas JV – YE18 Key Highlights

MM TL

mcm %

billion kWh

- 21%

- 23%

8

32

7 9

20

6

2013 2014 2015 2016 2017 2018 YTD

60%

49%

2017 2018

27

38

2018 2019 Expectation

9 14

10 13

1Q18 2Q18 3Q18 4Q18

Net Sales EBITDA

Electricity Generation

Source: Turcas Kuyucak financials

9

Turcas Kuyucak Geothermal (TKG) PP-YE18 Key Highlights

MM TL

million kWh

MM TL

Turcas Kuyucak Geothermal PP YE18 Highlights

• Turcas Kuyucak contributing positively

to Turcas consolidated EBITDA driven

by USD based Feed-In Tariff

• Long term project finance loan

repayments serviced through free cash

flow generation of TKG. 1.5 MM USD

excess cash generated as of YE18

26

19 15

20

1Q18 2Q18 3Q18 4Q18

Potential Project Pipeline

10

Geothermal Energy

Turcas plans to grow in geothermal energy with the following projects:

1. Existing TKG Plant (TKG-1): TKG successfully drilled an additional re-injection well (3rd one) and a successful additional production well (7th one) with the goal of maximizing the generation capacity and thus the EBITDA at this existing plant.

2. Potential New Plant (TKG-2) at our Existing TKG Concession Zone: The ultimate goal is to increase the installed base or add new modular plants taking advantage of the attractive Feed-In Tariff and the sustainable production capacity of our concession area, however, before proceeding with new drillings and further investment, TKG will wait for the official announcement of the Ministry of Energy and Natural Resources related to the details of the Feed-In Tariff Mechanism to be applied to Geothermal investments for the period after 2020 and study the sustainability of the reservoir.

3. Manisa Concession Zone: Turcas is developing another geothermal energy project on a 4,958.68 hectares concession zone in Manisa Gölmarmara in Western Turkey. TP drilled an exploratory well in Q2 2018 and obtained operation license for 30 years, however, before proceeding with new drillings and further investment, TP will wait for the official announcement of the Ministry of Energy and Natural Resources related to the details of the Feed-In Tariff Mechanism to be applied to Geothermal investments for the period after 2020.

Oil Upstream (Denizli)

Our 2,600m deep geothermal well (drilled 1Q-2017) in Denizli Hacıeyüplü did not yield enough thermal heat for power generation but encountered oil findings around 700 to 900 meters depth, TP plans to drill a new (shallow) well here for oil exploration in 2020 following Gravity-Magnetics, Seismic and other detailed studies. We obtained the required Oil Exploration License from the Government Authorities on 02.05.2018.

Manisa

Gölmarmara

Geothermal Site

(Virgin)

Denizli

Hacıeyüplü Oil

Upstream Site

TKG 1&2

Project

18

14 13

11

8 8

11

14

26

31 31

20172016201520142013201220112010200920082007

Continuous Dividend Distribution

11

Dividends Paid by Turcas

MM TL

Last 5 yr avg dividend yield: 2.5%

Turcas Consolidated IFRS Summary BS & PL

12

IFRS Consolidated Financial Statements & Financing Ratios

Note: Leverage = Financial Liabilities / Total Assets, Net Leverage = Net Debt / Assets

Balance Sheet , million TL 2017 2018 Ytd

Cash & Cash Equivalents 126 86 -32%

S -T Rec. From Rel.Parties (mostly from RTG) 19 19 0%

L -T Rec. From Rel.Parties (mostly from RTG) 61 70 15%

Investments (STAS & RTG) 793 806 2%

Fixed Assets (TKJ Capex Investments) 251 264 5%

Financial Assets (FMV of Usufruct Certificates) 78 74 -5%

Total Assets 1,348 1,352 0%

S - T Financial Liabilities (PF Loans for RTG & TKG) 91 135 49%

L - T Financial Liabilities (PF Loans for RTG & TKG) 510 615 21%

Equity 689 561 -19%

Total Liabilities & Equity 1,348 1,352 0%

Net Debt475 664 40%

Income Statement, million TL 2017 2018 Y/Y

Revenues (Electricity Sales) 0 46 n.a

Gross Profit 0 30 n.a

Other Operational Income (Net) 30 -10 n.a

Operating Expenses 26 24 -7%

Operating Profit 3 -4 n.a

Income from Investments 76 33 -56%

Income from Subsidiaries 94 8 -92%

Shell & Turcas 98 26 -73%

RWE & Turcas -4 -19 n.a.

Earnings Before Financing & Tax 173 37 -79%

Net Financial Losses -86 -180 109%

FX Losses -79 -172 118%

Net Income Before Tax 87 -143 n.a.

Tax -22 12 n.a.

Net Income/Loss 65 -131 n.a.

37%40% 44% 45%

55%

19%24%

31%35%

49%

2014 2015 2016 2017 2018

Leverage & Net Leverage

Leverage Net Leverage

680 633 641 689

561

1,098 1,072 1,155

1,348 1,352

62%59%

55%51%

41%

0%

30%

60%

90%

0

300

600

900

1,200

1,500

2014 2015 2016 2017 2018

Equity & Equity Financing

Equity Assets Equity/Total Assets

198

100

23

2317

1717

0

50

100

150

200

250

2013 YearEnd PrincipalDenizli CCPPLoan Balance

2014 PrincipalRepayments

for DenizliCCPP


for DenizliCCPP


for DenizliCCPP


for DenizliCCPP


for DenizliCCPP

2018 YearEnd PrincipalDenizli CCPPLoan Balance

Long - Term Evolution of Bank Loans (MM USD) (Cash Basis)

13

Note: Loan for Geothermal PP has a tenor of 11 years. Loan for Denizli CCPP has a tenor of 6 years

198

145

98

49 4

0

50

100

150

200

250

2013 Year End Principal Loan Balance(All utilized for Denizli CCPP)

Principal Repayments for Denizli CCPPbetween 2013-2018

Loan Utilization for Geothermal Project(2016-2018)

Geothermal Project Principal LoanRepayments in 2018

2018 Year End Principal Loan Balance

100 MM USD for

Denizli CCPP

45 MM USD for

Geothermal PP

49 4 45

0

50

100

150

200

250

2016-2018 Loan Utilizationsfor Geothermal PP

Geothermal PP PrincipalLoan Repayments in 2018

2018 Year End PrincipalGeothermal PP Loan

Balance

Denizli CCPP Loan Bridging (2013-2018) Kuyucak Geothermal PP Loan Bridging (2016-2018)

Decline in consolidated outstanding loan balance mainly driven by

on-track repayments of Denizli CCPP loan Consolidated

Thank you!

Erkan İLHANTEKİN

CFO

E-mail: [email protected]

Phone: +90 212 259 00 00 / Ext: 1270

Pınar SAATCIOĞLU

Head of Investor Relations

E-mail: [email protected]

Phone: +90 212 259 00 00 / Ext: 1287

Contact Information

ye18 earnings presentationsegmental analysis 3 mm tl oil segment energy segment shell & turcas...

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