Turkey's Aksa Enerji Misses 2013 Targets Due to Natural Gas Shortages

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's Aksa Enerji (BIST:AKSEN) (Istanbul) missed its electricity sales targets by 10% due to a shortage of natural gas in December. According to a company filing to the Istanbul Stock Exchange, the company's sales were 9 billion kilowatt-hours (kWh) in 2013, 10% lower than the previously guided sales figures. The company sold 65% of its electricity production via bilateral agreements. Aksa Enerji is aiming for 10.2 billion kWh in electricity sales in 2014, which would be a 13% increase from 2013, on the back of higher bilateral sales contracts.

The company's 2014 budget guidance is based on the assumption of flat natural gas and electricity prices in 2014. However, the company acknowledges the possibility of a hike in natural gas and electricity prices this year. Aksa Enerji plans to exceed the 2013 EBITDA (earnings before interest, taxes, depreciation and amortization) guidance figure of $137.6 million, mainly due to the strength in spot prices in the fourth quarter of 2013, which were driven by the shortage of natural gas in December. The earnings guidance for 2014 is between $146.7 million and $151.4 million, denoting 7% to 10% growth from 2013.

"Aksa Enerji's guidance indicates a favorable operating performance in the fourth quarter of 2013," said Kazim Andac, an analyst at Deutsche Bank in Istanbul. "Yet its revenue and EBITDA growth expectations for 2014 may trail market expectations. Despite the better demand outlook for 2014 on the back of mere 1.5% growth in consumption in 2013, the 7,000 MW in installed capacity that comes on stream in 2013 is likely to meet demand growth in 2014 without leading to a visible rise in electricity prices."

Turkey's energy industry is luring international companies, as electricity demand is set to grow an average 6.3% over the next 20 years, according to Energy Market Regulator of Turkey. With an annual energy import bill of more than $60 billion, Turkey wants to diversify energy supplies in order to reduce its oil and gas dependence on Russia and Iran.

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