Aksa Enerji CFO: No Need to Raise Capital to Finance Projects

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's electricity utility firm Aksa Enerji Uretim AS (ISE:AKSEN) (Istanbul, Turkey) reported first-quarter earnings of approximately $79.9 million, raising net profit by 291% from last quarter. First-quarter net income jumped from $5.26 million in the same period last year. Aksa Enerji recorded approximately first quarter net sales of approximately $288.4 million, an increase 139% year over year.

The company hopes to double its electric generation capacity from 2,036 megawatts (MW) to 4,500 MW in 2017. "We don't need to raise capital to finance our projects, we're solid on earnings," said Aksa Enerji CFO Cuneyt Uygun.

Currently, Aksa Enerji has 15 operating plants, six plants that are under construction and 22 licensed and granted power plants. The current power generation capacity of the operating plants is 2,036 MW, which includes 231 MW of oil-fired plants; 1,630 MW of natural gas-fired plants; 160 MW of wind-powered facilities; and 15 MW of hydroelectric power plants. The company has three wind power plants (Belen, Kiyikoy, Sebenoba) that are under construction with a total capacity of 87 MW. Also, the company is building a lignite-fired plant with a capacity of 135 MW in Bolu-Goynuk, 200 kilometres northwest of capital city Ankara.

"We generated this performance with high capacity utilization rates, we didn't gain much regarding currency appreciation," Uygun said in an interview with Bloomberg HT Television. On April 13, Mehmet Kazanci, the deputy chairman of Kazanci Holding, which owns Aksa Enerji, said that the Kazanci plans to invest $3 billion in new energy projects until 2017 via Aksa Enerji.

Uygun said: "We sell 35% of our electricity production via bilateral agreements. In case of a rise in electricity prices, our profits will also rise accordingly. But nobody in the energy sector a expects rise in electricity prices alone. A rise may occur with a natural gas price increase." Aksa Enerji's sales from electricity generation increased 179% year on year to 2,893 gigawatt-hours. The company's capacity utilization ratio has improved to 75% in 1Q12 from 72% in 4Q11. Currently, the company sells electricity to Syria and the Turkish Republic of Northern Cyprus (TRNC). The 2 million-MW contract with Syrian government will expire in coming month.

Kazanci Holding, owner of Aksa Enerji, sold 13.3% of the company to Goldman Sachs (NYSE:GS) (New York, New York) for $240 million. The acquisition of shares drove Aksa Enerji's valuation up to $1.8 billion. Under the terms of the deal, Goldman Sachs reserves the right to sell the stakes back to Kazanci Holding for the same price after a period of six years.

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