TURKEY OIL & ENERGY - Turcas: Investor day notes
Turcas Petrol (TRCAS TI, NOT RATED) hosted an investor day, on 18 December 2019, to share information about its business and the financial outlook for its subsidiaries. Key takeaways are:
New geothermal energy investments are on the agenda. Turcas’ 18MW Kuyucak geothermal power plant started operations in January 2018. This power plant operates under a feed-in-tariff (FIT) of USDc10.5/kwh for 10 years. Management stated that an additional USDc1.3/kwh incentive for the next three years has also been granted as local content support tariff. Turcas Kuyucak is contributing positively to Turcas’ consolidated EBITDA driven by USD-based FIT as the company generated TRY23m EBITDA in 9M19. The company is planning to drill additional production wells with the goal of increasing generation (most probably effects will be seen in 1H20 as per management).
Turcas is a dividend paying company with a last five-year average dividend yield of 2.5%. Management plans to continue paying dividends driven by strong cash inflows from Shell & Turcas Petrol and solid operational results of Turcas Kuyucak Geothermal PP.
Turcas Petrol AS is a Turkey-based investment company, focused in the oil and energy sector. Its joint venture, Shell and Turcas Petrol, is engaged in retail and commercial sales, marketing and distribution of fuel products and lubricants. Its joint venture, RWE and Turcas South Power Generation, operates a natural gas fired combined cycle power plant in the city of Denizli, Turkey. The Company also develops geothermal, solar and wind power projects and invests in a geothermal power plant site at Aydin district, Turkey under the name of Turcas Kuyucak Geothermal Power Generation. Its segments are: Oil, which includes lubricants, engine oil and fuel products; Electricity, which consists of the production, wholesale and distribution of electricity products, and Natural Gas, which consists of wholesale business of natural gas. Its subsidiaries include: Turcas Enerji Holding AS, Turcas Elektrik Uretim AS, Turcas Elektrik Toptan Satis AS and Turcas Yenilenebilir Enerji Uretim AS.
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