2013 year-end highlights - tekfen · 2014-03-06 · the 92-km pipeline to transport degasified oil...

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2013

Year-end Highlights

Content

General Evaluation of 2013

2013 Year-End Consolidated Financial Statements

2014 Projections

Detailed Information by Operating Segments

2



2014 Projections


3

Several factors emerged in 2013, that affected the developments in the Turkish economics and

the financial markets negatively. The indications that the period of monetary expansion, which

started following the 2008 crisis particularly in the US and which had encouraged foreign

capital to flow into developing countries like Turkey, may soon fade out; political difficulties

and unrest particularly in Turkey’s southern neighbors; and the political tension experienced for

various reasons throughout the year in Turkey are among those factors.

2013 has been a year in which economic growth rate was slower than that was desired, exports

declined (albeit small), current account deficit widened, and unemployment rose in Turkey.

Furthermore, annual inflation rate climbed up, both respect to the previous year and in excess

of the official target. There was major volatility in financial markets, particularly in the summer

and towards the year-end, and the Turkish lira declined to its lowest value ever against the US

Dollar and the Euro.

Within the framework of this macro situation Tekfen Group’s 2013 financial performance fell

short of its targets in 2013. In 2013, Tekfen Group’s revenues were TRY3,846 million; earnings

before interest, taxes, depreciation and amortization (EBITDA) were TRY10 million, and the

Group registered a net loss of TRY64 million. At the end of 2013, Tekfen Group had assets of

TRY4,697 million and equity capital of TRY1,942 million.

4


Tekfen Contracting Group, which constitutes one of Tekfen Group’s two main business areas, had a revenue of

TRY2,327 million, roughly akin to that of the year before. Nevertheless, the Contracting Group had net losses of

TRY217 million due to unexpected cost increases in projects especially in Morocco and Turkmenistan. In contrast,

the Contracting Group undertook new work valued at approximately US$2.2 billion in 2013. As a consequence, the

Group’s backlog, which was US$2 billion at the end of 2011 and US$2.2 billion at the end of 2012, reached US$3

billion at the end of 2013. Given the newly acquired work and our expectations regarding the favorable evaluation

of the claims we presented to the clients of our projects at loss, the Group is optimistic about the upcoming period

and it aims for a better year in 2014, especially in terms of profitability.

Tekfen Agri-industry Group, which accounts for Tekfen’s other major business area, had a successful year in

2013 with revenues of TRY1,423 million and net profit of TRY63 million. It is noteworthy that the Agri-industry

Group achieved significant profit despite rising raw material costs largely created by the increase in foreign

exchange rates. Significantly, given the unfavorable macroeconomic situation, the Agri-industry Group made

progress in 2013 on its major investment, decided the previous year, at Toros Tarım’s Samsun Plant. This circa

US$300 million-investment, scheduled for completion by the end of 2014, will ensure raw material supply and

reduce production costs.

The Real Estate Development Group concentrated on two major projects in 2013. The first was the Istanbul

Esenyurt Project, a large-scale housing project for which preliminary construction began in December 2013. The

second was the Izmir Mixed-Use Project (housing-office-commercial), a joint venture with Rönesans Group,

whereby construction works are scheduled to start in 2014. As both projects are in their initial stages, there is no

major revenue or profitability for the Real Estate Development Group to report in 2013. Indeed, the Group

announced revenues of TRY30 million and a net loss of TRY1 million in 2013.

Tekfen Group aims to significantly improve its performance in 2014, particularly with regards to profitability.

5

General Evaluation of 2013 -2



2014 Projections


6

Basic Balance Sheet Items (Million TRY) 31 Dec 12 31 Dec 13 Change (%)

Total Assets 4.130 4.697 14▲

Shareholders' Equity 2.111 1.922 9▼

Basic Income Statement Items (Million TRY)

01 Jan 12 -

31 Dec 12

01 Jan 13 -

31 Dec 13 Change (%)

Revenues 3.949 3.846 3▼

Gross Profit 385 127 67▼

Operating Profit 200 -124 162▼

EBITDA 281 10 97▼

Net Profit 300* -64 121▼

7

Main Financial Indicators

* The impact of the TRY 129 million profit from the sale of our shares in Eurobank Tekfen is included in the 2012 net profit figure.

Revenues

8

Consolidated (Million TRY) By Segment (Million TRY)

By Segment (%)

Contracting Agri Industry Real Estate Other

2.395

1.424

61 68

2.327

1.423

30 67

2012 2013

2012 2013

3.949 3.846

60,7%

36,1%

1,5% 1,7%

2012

60,5% 37,0%

0,8% 1,7%

2013

EBITDA

9



142 137

0 2

-100

117

0

-8

2012 2013

2012 2013

281

10

EBITDA Margin (%)

10

Consolidated (%) By Segment (%)


5,9

9,7

-0,5

2,5

-4,3

8,3

-0,8

-11,9

2012 2013

2012 2013

7,1

0,3

Net Profit

11



24

116

2

159

-217

63

-1

92

2012 2013

* The impact of TRY 129 million profit from the sale of our shares in Eurobank Tekfen is included.

2012 2013

300

-64

*

Net Profit Margin (%)

12

Consolidated (%) By Segment (%)


1,0 8,1 3,0

232,7

-9,3

4,4

-2,5

137,2

2012 2013

2012 2013

7,6

-1,7

2009 2010 2011 2012 2013

Other

Agri Industry

Real Estate

Contracting

15.514

Number of Employees

13

Number of Employees

Contracting Real-Estate Agri-Industry Other* Total

2009 8.877 745 949 795 11.366

2010 10.680 569 993 837 13.079

2011 12.982 710 995 822 15.509

2012 15.546 419 1.035 532 17.532

2013 13.614 348 1.033 519 15.514

* Eurobank Tekfen personnel is included in Other segment in proportion to Tekfen Holding’s share in the related company for 2008-2011 period .

13.079 11.366

15.509 17.532

Capital Expenditures

14

Capital Expenditures (Million TRY)

Contracting Real-Estate Agri-Industry Other Total

2008 88,5 15,8 17,3 11,8 133,4

2009 26,5 0,7 15,3 0,8 43,3

2010 30,0 0,2 10,2 13,5 53,9

2011 78,4 0,3 11,4 6,4 96,5

2012 142,6 0,3 49,9 0,4 193,3

2013 24,7 0,4 158,4 0,6 184,1

Million TRY

2008 2009 2010 2011 2012 2013

Other

Agri Industry

Real Estate

Contracting

133,4

96,5

43,3 53,9

193,3 184,1

Net Cash Position*

15

Consolidated Net Cash Position (Million TRY) Net Cash Position by Segments (Million TRY)

Contracting Agri-Industry Real-Estate Other

-290

147 11

767

-619

224

-99

688 2012 2013

* Net of financial liabilities, cash and cash equivalents.

2012 2013

635

193



2014 Projections


16

Total Revenues

17

Million TRY

* Projected

3.949 3.846 3.991

2012 2013 2014/P*

Revenues (Million TRY)

18

* Projected

Contracting Agri Industry

Real Estate Other

2012 2013 2014/P*

2.395 2.327 2.445

2012 2013 2014/P*

1.424 1.423 1.408

2012 2013 2014/P*

61

30 54

2012 2013 2014/P*

68 67 84

EBITDA

19

Million TRY

* Projected

281

10

272

2012 2013 2014/P*

EBITDA (Million TRY)

20


Real Estate Other

* Projected

2012 2013 2014/P*

142

-100

167

2012 2013 2014/P*

137 117 111

2012 2013 2014/P*

0 0

-7

2012 2013 2014/P*

2

-8

1

EBITDA Margin (%)

21

* Projected

7,1

0,3

6,8

2012 2013 2014/P*

EBITDA Margin (%)

22


Real Estate Other

* Projected

2012 2013 2014/P*

5,9

-4,3

6,8

2012 2013 2014/P*

9,7 8,3 7,9

2012 2013 2014/P*

-0,5 -0,8

-13,0

2012 2013 2014/P*

2,5

-11,9

1,2

Net Profit

23

Million TRY

* Projected

** The impact of TRY 129 million profit from the sale of our shares in Eurobank Tekfen is included.

300

-64

151

2012 2013 2014/P*

**

Net Profit (Million TRY)

24


Real Estate Other

2012 2013 2014/P*

24

-217

37

2012 2013 2014/P*

116

63 80

2012 2013 2014/P*

2

-1 -6

2012 2013 2014/P*

159

92

40

25

* Projected


7,6

-1,7

3,8

2012 2013 2014/P*


26


Real Estate Other

* Projected

2012 2013 2014/P*

8,1

4,4 5,7

2012 2013 2014/P*

232,7

137,2

47,6

2012 2013 2014/P*

1,0

-9,3

1,5

2012 2013 2014/P*

3,0

-2,5

-11,1



2014 Projections


Contracting Group

27

Contracting Group The Middle East Region

The Middle East, with its oil and natural gas resources make it one of the largest markets for international construction

companies and for Tekfen, is also an arena of strong competition. Tekfen aims to strengthen its presence in the market

by submitting proposals for high-quality projects for which there is relatively low competition.

Tekfen Construction’s work on the Propylene Oxide Processing Unit, which began in 2012 for the Sadara Chemical

Company in Saudi Arabia, continued according to plan in 2013. The project is scheduled for completion at the

beginning of 2015. Efforts are underway to expand involvement in the project by securing a share of other facilities

planned for the complex.

Tekfen’s presence in Qatar has grown considerably in recent years. Both the North Road and the Ceremonial Road

projects were mostly completed and delivered in 2013. Work continued on the 95-km North Road Side Roads and

Additional Junctions Project, an ever expanding continuation of the same highway project. The project, which is

scheduled for completion at the end of 2015, is expected to reach nearly $800 million with additions.

The 92-km pipeline to transport degasified oil from the Shah, Asab and Sahil regions of Abu Dhabi, in the UAE, was

completed on 25 March 2013.

While security concerns have limited Tekfen’s volume of business in Iraq, the country will continue to hold a place in

the Company’s portfolio. Tekfen Construction is currently negotiating for various projects there. The contract for the

general project management and engineering services that Tekfen Construction, together with Tekfen Engineering,

began in 2010 for the BP, CNPC and SOC Consortium in the Rumaila oilfield in the Gulf of Basra continued in 2013.

These services are expected to grow as the Iraqi government makes investment decisions in 2014.

28

Developments in 2013 and

Potential Projects

Contracting Group Caspian Region

The Caspian Region, which has the third largest petroleum and natural gas reserves in the world, has a growing importance

in the global energy market and is one of Tekfen Construction’s major areas of operation.

Azerbaijan, one of the most important actors in this region, is Tekfen Construction’s regional center of operations. Tekfen

is closely monitoring the Shah Deniz Phase-2 project, which will increase the capacity of Azeri gas. In fact, in December

2013, Tekfen concluded a contract with BP Exploration (Shah Deniz) for two new offshore platforms weighing a total of

26,442 tons and a bridge to link them for the Shah Deniz Phase-2 project. Tekfen Construction, together with its

participation in Azfen, its local partner, has a share of about $496 million in the project, which is budgeted at close to $975

million.

On the other hand, Tekfen Construction, within the framework of the Tekfen-Azfen Consortium, concluded yet another

contract with BP Exploration for the construction and assembly of the Sangachal Land Terminal, which is similarly part of

the Shah Deniz Phase-2 Project. Tekfen Construction’s share of the nearly $1 billion budget is approximately $621

million.

Another project Tekfen launched in Azerbaijan in 2013 was the Baku Olympic Stadium with 68,000-spectator capacity.

Tekfen Construction is responsible for the construction and general project planning services of the project. The project

value of the venue was initially planned as $640 million and will be completed in a record 24 months.

Turkmenistan is another Caspian Region country where Tekfen Construction has operations. The mechanical component

of the Galkynysh Natural Gas Field Development Project, under construction for the major contractor Petrofac, was

completed on schedule on 31 May 2013. The project, launched in 2011, involves the cleaning and purification of raw

natural gas from wells in the vicinity of South Yoloten and the piping of useable gas to foreign markets. Given the project

management’s expressions of satisfaction with Tekfen, the Company expects to receive similar projects in the country,

whose importance for natural gas investments has grown.

29


Potential Projects

Contracting Group Turkey

For many years, Tekfen Construction’s operations have been heavily weighted towards projects abroad. However, an

increase in the number of new projects in Turkey in Tekfen’s field of specialization has contributed to a growth in

domestic operations since 2012.

An $501-million agreement for Tüpraş’s Residue Upgrading Project (RUP) was signed with the project’s principle

contractor, Técnicas Reunidas of Spain, at the end of 2011, and is progressing according to plan. Tekfen is responsible

for the construction and assembly of the RUP unit, the scheduled completion of which is September 2014.

Another domestic project for Tekfen Construction is the Samsun Production Plant of Toros Agri, where the project is

for a sulphuric acid facility, expansion of the production capacity of the two existing phosphoric acid facilities and the

renovation of the existing NPK facilities. This is an EPC-turnkey project and it is scheduled for completion at the end

of 2014 .

Tekfen Construction has been responsible for repairs and maintenance of the Turkish section of the Baku-Tbilisi-

Ceyhan Crude Oil Pipeline since 2009. Throughout 2013, the BTC Repairs Project received regular orders, which

were completed according to schedule. In addition, a three-year Repair Contract for the BTC Pipeline, for which a

tender was held, was signed in 2013. The project, which is expected to bring in $136 million, will be carried out, as

before, through gradual work orders issued by management.

Domestic oil, natural gas and energy investments expected in the near future promise to increase Tekfen’s

opportunities to expand further the number of projects it has in Turkey. The Star Refinery, being established by

SOCAR in Izmir Aliağa, presents significant business potential for Tekfen Construction. It is hoped that the

productive partnership Tekfen Construction has enjoyed at Tüpraş with Técnicas Reunidas, the leader of the

partnership that is going to build the Star Refinery, will carry forward to this project. Tekfen Construction is also

interested in the Trans-Anatolian Natural Gas Pipeline (TANAP) project, for which a memorandum of understanding

was signed at the end of 2011 followed by an intergovernmental agreement in June 2012. New business prospects for

Tekfen Construction are expected to be created in Azerbaijan and Georgia. The project is to take five years and cost

$7 billion.

30


Potential Projects

Contracting Group

North Africa

Tekfen Construction has done business in North Africa since 2004. However, as a region strongly affected

by the Arab Spring, stability there remains elusive. The Company is seeking restoration of its operations in

Libya, which came to a halt with the conflict that started at the beginning of 2011. Negotiations continued

with Libyan authorities to resume work on the Al Kufra-Tazerbo section of the Man Made River project,

which will transport ground water from the Sahara Desert through huge 4-meter diameter pipes to

residential areas on the Mediterranean coast. Hopes are rising that outstanding amounts and compensation

for damages will be paid and that partially completed projects will be finished.

Tekfen has carried out significant projects in Morocco. Among the most recent of these projects are the two

diammonium phosphate (DAP) fertilizer plants, each with an 850,000-ton annual capacity, which were

completed and delivered to the client on 31 May 2013. Construction of the pipeline to carry slurried

phosphate ore extracted from mines in the Khouribga region to Jorf Lasfar port on the Atlantic coast was

mostly completed. The goal is for the project to be mechanically completed by the end of 1Q2014.

31


Potential Projects

Contracting Group

32

Geography

Tekfen Contracting Group continued its operations in 8 countries in 2013, and has a backlog of USD 3 billion as of end of 2013.

This portfolio, concentrating mainly on three geographical regions, namely the Caspian Region, Middle East and North Africa,

includes, besides Turkey, Azerbaijan, Turkmenistan, Iraq, Saudi Arabia, Qatar, Morocco and Libya*.

The Group has 3 manufacturing plants in Derince, Ceyhan and Baku (Azerbaijan).

* As of the date of this presentation, the operations in Libya are frozen.

Contracting Group Backlog as of

December 31, 2013

33

* “Expected end date” refers to the mechanical completion date.

Project Location

Expected End

Dates *

Revenue

Based

Completion

Rate

Remaining

Amount (US$)

Çiftehan-Pozantı Motorway Turkey 15.10.2014 318.970.115 $ 225.352.386 $ 95,9% 9.277.222

Prov. of P/L Repair Services/Geohazard Works/Main Oil Line Works/BP Iraq Works Turkey 31.03.2014 102.061.732 $ 102.061.732 $ 98,5% 1.547.057

Prov. of Pipeline and Facilities Repair Services for BTC Turkey Turkey 10.09.2016 136.200.000 $ 136.200.000 $ 0,0% 136.200.000

Tüpraş - Residuum Upgrading Project of Izmit Refinery Turkey 09.09.2014 497.463.416 $ 497.463.416 $ 69,9% 149.684.562

Toros Tarım Samsun Plant Investment Project Turkey 31.12.2014 176.224.332 $ 176.224.332 $ 21,8% 137.765.254

Supply and Fabrication of Steel Structure Type Pancakes Turkey 07.02.2014 13.267.742 $ 13.267.742 $ 0,0% 13.267.742

Supply and Fabrication of Pancakes of Top Sides Modules Turkey 08.12.2014 26.302.112 $ 26.302.112 $ 0,0% 26.302.112

TURKEY TOTAL 474.043.949

South Yoloten Gas Field Project Package 2&3A Turkmenistan 31.12.2013 315.493.170 $ 315.493.170 $ 89,1% 34.404.721

TURKMENISTAN TOTAL 34.404.721

New Management Office Project of SOCAR Azerbaijan 30.09.2014 348.145.408 $ 348.145.408 $ 66,1% 118.051.105

Fabrication of Topsides & Drilling Facilities and Integration of Living Quarters Azerbaijan 20.04.2014 206.799.725 $ 206.799.725 $ 98,6% 2.846.167

Baku Olympic Stadium Project Azerbaijan 28.02.2015 717.792.893 $ 717.792.893 $ 44,8% 396.318.251

Shah Deniz Stage 2 Fabrication of Offsite Facilities Azerbaijan 31.12.2017 262.365.978 $ 262.365.978 $ 0,0% 262.365.978

Shah Deniz Stage 2 Onshore Terminal Facility - Sangachal Terminal Azerbaijan 15.10.2017 369.395.209 $ 369.395.209 $ 0,0% 369.395.209

AZFEN Projects Azerbaijan 1.761.574.939 $ 704.629.976 $ 27,7% 509.108.606

AZERBAIJAN TOTAL 1.658.085.316

Propylene Oxide Process Unit S. Arabia 05.01.2015 149.826.676 $ 149.826.676 $ 29,6% 105.416.366

SAUDI ARABIA TOTAL 105.416.366

OCP Slurry Pipeline Project Khouribga - Jorf Lasfar Morocco 01.04.2014 433.867.013 $ 433.867.013 $ 90,6% 40.701.625

MOROCCO TOTAL 40.701.625

Qatar Primary Routes North Roads Contracts 2&3 Qatar 30.09.2013 792.756.364 $ 792.756.364 $ 96,4% 28.724.060

Additional Work for North Road Project Qatar 25.02.2014 95.991.781 $ 95.991.781 $ 78,9% 20.269.877

QAPCO LDPE 3 Project Low Density Polyethylene Plant Qatar 30.06.2012 166.348.917 $ 166.348.917 $ 98,2% 3.067.922

Design and Construct Service Road Enhancement to North Road Corridor Qatar 25.06.2016 592.030.028 $ 592.030.028 $ 15,6% 499.758.064

QATAR TOTAL 551.819.923

Kufra Conveyance System Libya On Hold 486.461.084 $ 325.928.926 $ 70,0% 97.898.859

LIBYA TOTAL 97.898.859

Rumalia Field Dev. Project Prov. Of Engineering and Project Management Services Iraq 30.06.2014 213.130.573 $ 213.130.573 $ 83,1% 35.917.805

IRAQ TOTAL 35.917.805

TOTAL 2.998.288.564

Current

Contract Price

Tekfen

Portion

Contracting Group Growth

34

Considering the new projects undertaken and those completed in 2013, the backlog of the Group

amounts to USD 3 billion as of end of 2013, registering a 40% increase with respect to the

previous year-end.

As of 31 December 2013, backlog abroad constitutes 84% of the total.

Backlog (USD million)

0

500

1.000

1.500

2.000

2.500

3.000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

569 484 484 368 237 159 111 72 75 34 36

555 561 476

175 201 242 167 264

1.535 1.350

1.668 1.257 1.225

1.794

1.449 1.589

2.522

Abroad Turkey

744 685

726 535

501

1.694

1.461

1.740

1.333 1.259

1.830 2.005

2.150

2.998

Contracting Group Ongoing Projects

Backlog Breakdown by Regions Backlog by Project Types

35

Region Million USD

Caspian Region 1.692

Middle East 693

Turkey 476

North Africa 139

Total 2.998

Project Type Million USD

Industrial Facilities 1.610

Motorway 558

Buildings 514

Pipeline 276

Fabrication Works 40

Total 2.998

Pipeline

9%

Industrial

Facilities

54%

Motorway

19%

Fabrication

Works

1%

Buildings

17%

Middle

East

23% North

Africa

5%

Caspian

Region

56%

Turkey

16%

Contracting Group

36

Revenues (MTRY) and EBITDA Margin (%)

Revenues &

EBITDA Margin

The EBITDA margin which was at

5,9% level by the end of 2012, came

down to -4,3% in 2013-end.

At the inital phase of each project,

expected project-end EBITDA margin,

varies from 10% to 25% on project

basis.

Tax rates that the Group is exposed to

in the countries it operates vary between

0-35%.

In 2013, EBITDA amounted to negative TRY 100 million, leading to an EBITDA Margin of -4.3%. As a result, a

net loss of TRY 217 million was registered. This loss stemmed mainly from the ongoing pipeline projects in Morocco

and Turkmenistan. The factors behind this loss were unexpected variation orders in 2013 and additional costs that

were born due to these amendments, as well as increase in labor costs and general expenses due to time extensions.

The total negative impact of these factors add up to TRY 234 million.

545 534

1.073 1.031

1.319 1.341

1.111

1.864

2.395 2.327 2.445

5,1%

12,7%

12,0%

7,3%

8,5% 11,2%

13,2%

9,3%

5,9%

-4,3%

6,8%

-5%

0%

5%

10%

15%

-500

0

500

1.000

1.500

2.000

2.500

3.000

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014P

Revenue Margin



2014 Projections


Agri - Industry Group

37

FERTILIZERS

Global Developments

Fertilizer prices had decreased throughout the year. Urea, ammonium nitrate and ammonium sulphate prices

started to pick-up in December.

Reasons for downward trend in prices were increase in China’s supply, decrease in India’s demand and the

break-up of Belarus Potash Company (BPC).

Developments in Turkey

Domestic consumption increased by 9% and reached 5.8 million tons in 2013. With the impact of

significant early sales in November-December for Spring application of 2014, consumption numbers were

higher than normal levels.

Precipitation was lower than normal levels towards the end of 2013 and also at the beginning of 2014. This

can have a negative impact on 2013/2014 season.

38

38

Agri-Industry Group Developments

Domestic Sales

Volume and Market Share Toros Agri

39

4th Quarter Cumulative

Quarterly sales were higher than 2012 due to increase in early sales for 2014 spring season.

Yearly sales volume in 2013 stayed flat compared to 2012.

In both periods, market share decreased because increase in consumption was higher than the increase in sales

volume.

376 418

10 14

33%

28%

0%

5%

10%

15%

20%

25%

30%

35%

0

100

200

300

400

500

600

700

2012/Q4 2013/Q4

1,0

00 T

ons

Dealer Sales Wholesale Market share

432 386

1.542 1.524

70 91

30% 28%

0%

5%

10%

15%

20%

25%

30%

35%

0

500

1.000

1.500

2.000

2.500

2012 2013

1,0

00 T

ons

Dealer Sales Wholesale Market share

1.615 1.612

Domestic Sales by Product Toros Agri

40

Cumulative (1,000 Tons)

338 347

54 65

139

666

3

286 336

55 106

154

673

5

2012 2013

4th Quarter (1,000 Tons)

48 43

5 13

50

226

1

51 54

8 24

55

239

1

2012/Q4 2013/Q4

Due to unfavorable pricing dynamics, AN33 imports were inadequate in the first half of the year; therefore, AN26

and AN33 sales volume decreased compared to 2012 .

Toros Agri

41

Domestic Sales Prices

4th Quarter (USD/ton)

AN26 AN33 AS UREA DAP COMP

315 364

292

496

616

459

295 344

219

413

486

373

2012/Q4 Ave. 2013/Q4 Ave.

Cumulative (USD/ton)

AN26 AN33 AS UREA DAP COMP

325

381

282

524

623

469

342 382

276

464

530

416

2012 Ave. 2013 Ave.

2012/Q4 2013/Q4 difference 2012 2013 difference

AVERAGE PRICE (USD$/TON) 450 374 -17% 429 405 -6%

Production Toros Agri

42

4th Quarter (1,000 tons) Cumulative (1,000 tons)

AN26 production volume decreased because AN33 was produced instead of AN26, in parallel with demand in

the market.

Compound fertilizer production in 2013/Q4 decreased compared to 2012/Q4 due to downward trend in

compound fertilizer sales and our policy to keep minimum inventory.

81 78

30

148

337

64

100

27

109

300

AN 26 AN 33 DAP COMP Total

Production

2012/Q4 2013/Q4

306 297

156

664

1.423

265 328

159

656

1.408

AN 26 AN 33 DAP COMP Total

Production

2012 2013

Toros Agri

Capacity Utilization

43

PRODUCT

TYPE PLANT

CAPACITY

(1,000

Tons/year)

CAPACITY UTILIZATION RATE (%)

2012/Q4 2013/Q4 2012 2013

AN26 MERSIN 660 98 103 104 103

NPK CEYHAN 660 81 53 80 79

NPK/DAP SAMSUN 527 41 45 62 63

TOTAL* 1.847 77 70 83 83

* Weighted average CUR

Imports Toros Agri

44

3rd Quarter (1,000 tons) Cumulative (1,000 tons)

Imports increased in parallel with higher demand.

0 4

35

2

41

17 15

27

0

59

AN33 AS UREA Other Total

Imports

2012/Q4 2013/Q4

19

62

87

3

171

28

63

95

3

189

AN33 AS UREA Other Total

Imports

2012 2013

Agri-Industry Group TERMINAL SERVICES

45

45

Handled Quantity and

Leased Capacity

Leased Capacity (1,000 m 3)

Petroleum Products

384

1.076

2012 2013

Handled Quantity (1,000 tons)

Dry/Liquid Bulk-General Cargo*

5.359

4.480

2012 2013

* Does not include petroleum products’ handling volume.

Decrease in Dry/Liquid Bulk-General Cargo handling quantity was higher than expected.

Uncertainty in coal sector due to developments in USD/TRY exchange rate decreased import

volume of coal firms located in Samsun.

In Ceyhan, export volumes of firms operating in minerals and ore sector were less than expected

which contributed to the decrease in dry bulk cargo handling quantity.

Improvement in occupancy rate in petroleum products were better than expected. Occupancy in

2013 was 40% compared to 14% in 2012.

Agri-Industry Group

46

46

Revenue EBITDA Net Profit

Revenue, EBITDA

& Net Profit

2012/Q4 2013/Q4

337 356

20 16

Mil

lion

TR

Y

Agri Terminal

2012/Q4 2013/Q4

23 21

8 6

Mil

lion

TR

Y

Agri Terminal

2012/Q4 2013/Q4

17

24

6

5

Mil

lion

TR

Y

Agri Terminal

357 372

31 27

23

29

Agri revenues increased due to higher fertilizer sales volume.

Downward trend in fertilizer prices continued in the last quarter and the balance between raw material prices and

sales price was unfavorable for fertilizer producers. Therefore, as expected, 2013/Q4 EBITDA was weaker than

2012/Q4.

Net income was realized higher than expectations due to positive tax effect of incentive received for Samsun Plant

investments.

Agri-Industry Group

47

47


Revenue, EBITDA

& Net Profit

2012 2013

1.357 1.354

67 69

Mil

lio

n T

RY

Agri Terminal

1.424 1.423

2012 2013

110 87

27 30 M

illi

on

TR

Y

Agri Terminal

137 117

2012 2013

98

40

18

23

Mil

lio

n T

RY

Agri Terminal

116

63

Downward trend in fertilizer prices continued throughout the year and the balance between raw material prices

and sales price was unfavorable for fertilizer producers. Therefore, as expected full year EBITDA was weaker than

2012.

Net income was negatively affected by TRY depreciation against USD.

2014 Expectations Toros Agri

48

Fertilizers

Domestic Sales Volume: 1.7 million tons

Market share: 31%

Average Domestic Sales Price: $355/ton

Capacity Utilization Rate: 85%

Terminal Services

Dry/Liquid Bulk-General Cargo handling volume: 4.65 million tons

Petroleum products occupancy rate: 41%

Agri-Industry Group

49

49


Revenue, EBITDA,

Net Profit Projections

2013 2014P

1.354 1.333

69 75

Mil

lio

n T

RY

Agri Terminal

1.423 1.408

2013 2014P

87 80

30 31

Mil

lio

n T

RY

Agri Terminal

117 111

2013 2014P

40 59

23 21 M

illi

on

TR

Y

Agri Terminal

63 80



2014 Projections


Real Estate Development Group

50

51


Tekfen Real Estate Dev. Inv. and Trade Co., Inc

Business Line: Investment, Development, Project Management, Asset Management

Tekfen Tourism and Management Co., Inc

Business Line: Facility Management

Tekfen Real Estate Investment Co., Inc

Business Line: Investment, Development

Tek

fen

Rea

l E

sta

te D

evel

op

men

t G

rou

p*

Organization

* Tekfen Oz Real Estate Development Co., Inc. was sold in March 2013 together with all its assets.

52

Projects Real Estate Development Group

* Values indicate Tekfen share in total sales revenue.

Project

Project

Function Location

Start Date of

Poject

End Date of

Project

Estimated Project

Size

(Million USD)

Izmir Mixed Use Mixed Use Izmir Jan.13 Jun.17 254*

Esenyurt Project Residential Istanbul May.13 Jun.16 231

Total 485

BREAKDOWN BY FUNCTION (m²)

Project Residential

Sellable/

Leasable Area*

Office

Sellable/

Leasable Area*

Retail

Sellable/

Leasable Area*

Izmir Project 25.000 10.000 30.000

Esenyurt Project 170.000 - 3.000


53

Ongoing Projects

Izmir Mixed Use

Transaction Overview:

50%-50% partnership with Renaissance Group

The largest mixed use project in Izmir

Total Project Size : USD 508 million

Project Share : 50 %

Project Summary:

Total Sellable/Leasable area (GLA) :

Shopping Mall 30,000 m²; Home Office 10,000 m² and

Residential 25,000 m²

Estimated const. period: Q2/2014 – Q2/2017

Landmark project for the city of Izmir

Investment Rationale:

Location within the new planned CBD of Izmir

High accesibility and visibility through the main arteries

The re-approval of zoning plan of Izmir Project

region is completed. Design development and

engineering works are ongoing.

Real Estate Development

54

Ongoing Projects

Esenyurt Housing Project

Overview:

Being developed on 56.800 sqm land which is purchased on

May 2013

Construction permit granted on December 2013 for the

project including aproximately 1.400 residential and retail units

Project Size: 231 million USD

Tekfen Share: 100%

Project Summary :

Total Sellable Space:

Housing: 170.000 sqm, Retail: 3.000 sqm

Construction Period- Start: Q1/2014 Complete: Q2/2016

The project will maintain the vision and standards that have

made Tekfen one of the pioneers in the sector, with the creation

of living space that will bring along a particularly significant

difference.

Investment Rationale:

Esenyurt property is in a sought-after area because of its

developing transportation infrastructure, the city’s growth

dynamics, and its situation on the intersection between the E5

highway and TEM motorway

Esenyurt has great potential for the development having a

predominantly middle-class area which is tha target segmet.

Construction permit is granted on Dec 13. Design

development and construction is ongoing. Sales

will start on second half of 2014.


55

Tekfen Services Facility Management

Facility management of Tekfen Tower, Taksim

Residences, Tekfen Head Office Buildings, Levent

Office, Yalıkavak Tekfen Houses and S-Cafe are

directed and operated by Tekfen Tourism & Facility

Management Co., Inc. under the brand name of Tekfen

Services.

Facility Management for the ongoing and the

potential projects of Tekfen Real Estate Development

Group is planned to be operated by Tekfen Services.

Tekfen Services’ professional facility management

improves the values of the projects of Real Estate

Development Group.


56

Assets

Tekfen Holding earns rental income from the offices it owns in Akmerkez and

Tekfen Tower.

Tekfen Tower has 33,000 m² rentable area. Of this, 21% is used by Group

Companies, while the rest is rented to several institutions.

Total rental income from Tekfen Tower was USD 9.7 million in 2011, USD 10.6

million in 2012 and USD 11.4 million in 2013.

Disclaimer

57

Tekfen Holding A.S. (the “Company”) has prepared this presentation (the “Presentation”)

in order to provide investors with general information about the Company. The contents of

this Presentation is based on public information and on data provided by the Company

management. Neither the Company nor any of its directors, managers or employees nor

any other person shall have any liability whatsoever for any loss arising from use of this

presentation. This Presentation does not constitute an offer or invitation to purchase the

securities of the Company. Investors and prospective investors interested in the securities

of the Company are required to conduct their own independent investigations and

appraisal of the business, financial condition of the Company and the nature of its

securities. Except for the historical information contained herein, the statements made in

this Presentation with respect to the Company’s plans, strategies, beliefs and other

prospective matters are forward-looking statements that involve risk and uncertainty that

are not under the Company’s control which may cause actual results to differ materially

from those anticipated. Except where otherwise indicated, this Presentation speaks as of

the date hereof. We undertake no duty to update or revise any forward looking statements,

whether as a result of new information, future events or otherwise.

Contact Information

58

For General Questions and Requests for Reports:

Çağlar Gülveren, CFA Investor Relations and Corporate Governance Coordinator

e-mail: [email protected]

Tel: +90 212 359 3420

Contracting Group:

Fatih Bahçeci, Tekfen Construction Vice President - Projects Planning and Control


Tel: +90 212 359 3583

Agri-Industry Group:

Canan Şenkut, Chief - Investor Relations


Tel: +90 212 357 0193

Real-Estate Development Group:

Ayşe Turalı, Assistant General Manager


Tel: +90 212 357 1010

mailto:[email protected]










2013 year-end highlights - tekfen · 2014-03-06 · the 92-km pipeline to transport degasified oil...

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