Aksa Enerji Uretim : Analyst Meeting Presentation

AKSA ENERJİ ÜRETİM A.Ş.

Rüzgarlıbahçe Mahallesi, Özalp Çıkmazı, No:10, 34805 Kavacık - Beykoz / İstanbul

T: 0216 681 00 00

F: 0216 681 57 [e-mail]

DATE	: 12.11.2018
FROM	: Aksa Enerji Üretim A.Ş. Investor Relations
[phone]
[e-mail]
SUBJECT	: Analyst Meeting Presentation

The outline of the Analyst teleconference, which has been held today, is presented below to our stakeholders and the presentation in English is available athttp://www.aksainvestorrelations.com/presentations/financial-presentations/.

Sector

In the first nine months of 2018, electricity generation throughout the country increased by 1.6%, while the consumption rose by 1.7% year-on-year. On the other hand, the total installed capacity in Turkey reached 87,718

MW, indicating a 7.8% increase year-on-year.

Compared to 9M17, electricity generation from natural gas decreased by 13.3% throughout the country due to the increase in natural gas prices and the low spark spread. On the other hand, generation from coal and lignite made up for this decrease by increasing 18% year-on-year due to lower cost of production.

In terms of installed capacity changes by fuel type, the largest increase has been realized in coal and lignite with 1,797 MW year-on-year. Additionally, there is an increase of 1,059 MW in hydro, 468 MW in wind, 19 MW in fuel-oil, and 638 MW decrease in natural gas capacities. The most notable installed capacity increase has been achieved in the unlicensed power plants, from 3,303 MW for the same period in 2017 to 6,795 MW in 2018.

In the first 9 months of 2018, weighted average spot price was TRY 215, up by %28 from TRY 168 year-on-year.

Natural Gas Prices: BOTAŞ has increased its tariff in August reflecting devaluation into the price, resulting in a 49% increase. Due to the continued devaluation of TRY, BOTAŞ once again increased its prices by 30% in September. Due

to the stabilization in TRY there was no price adjustment in October. This brings the BOTAŞ price increase between January-October to 113%.

Average spot energy price, on the other hand, has increased by 74% during the same period.

Sales

As of 2018, Aksa Energy boasts a total installed capacity of 1,971 MW. In the first half of 2018, excluding the sales in Africa, the Company recorded 9,464 GWh of energy sales and the average sale price was TRY 288. Spot market sales constitute a major part of our sales in Turkey.

Aksa Energy's power plants in Africa continue to operate in line with the demand, and they have sold 846 GWh of electricity in the first nine months. Our power plants in Africa, which had a sales volume of 371,980 MWh in the last quarter of 2017, recorded a sales volume of 432,862 MWh in the first quarter of 2018, 255,996 MWh in the second quarter particularly due to the operation of hydroelectric power plants during the rainy season in Ghana, and 156,817 MWh in the third quarter. Despite the exchange rate increases and lower sales volume, average sales price rose from TRY 732 in 1Q18 to TRY 1,994 thanks to the guaranteed capacity invoices collected independently of sales volume.

Corrections in the Financial Statements for the Period January-September 2018

The correction in the amortization expense in the financial statement for the period 1 January - 30 September 2018, which was disclosed on Public Disclosure Platform on 8th November 2018, has been reflected in the consolidated financial statements for the period between 1 January - 30 September 2018.

It has been detected that the amortization expenses have been inadvertently miscalculated in the 3-month (1st Quarter) and partially reviewed 6-month (2nd Quarter) financial statements, as well as in the financial tables for the 9-month period (3rd Quarter). The error stemmed from the fact that the amortization figures calculated within the scope of our African power plants were inadvertently not added to the amounts they would generate when they started their commercial operations.

As a result of the aforementioned corrections, our net profit has been positively affected for the periods of 1 January - 30 September 2018 and 1 July - 30 September 2018.

The amortization expenses of the tangible assets registered under our African power plants are calculated according to the contract durations of the respective power plants. The net profit for the period 1 January - 30 September 2018 increased to TRY 125.209.318 as a result of TRY 22.949.746 correction in the amortization expense for the period. The net profit for the period 1 January 2018 - 30 June 2018 is realized at TRY 67.968.598 following a correction of TRY 60.180.708 in the amortization expense. The net income for the period 1 July - 30 September 2018 rose to TRY 57.240.720.

In accordance with the Corporate Governance Principles of transparency, fairness, responsibility and accountability, the Board of Directors took swift action and ensured the public disclosure of financial statements and notes to the financial statements.

Financial Statements for 30.09.2018 (As per IFRS results)

The positive profitability effect of our power plants in Africa is better reflected on our financials in the first nine months of 2018 compared to the same period of 2017. In 1M2018, Aksa Energy's revenue increased by 36% to TRY 3,487 million, while EBITDA rose by 228% to TRY 756 mn year-on-year. Furthermore, our gross profit and operating income increased 2.3 and 2.6 times year-on-year respectively. Having recorded a net profit of TRY 119 million in the first nine months of 2017, our Company recorded a net profit of TRY 125 million for the same period in 2018. EBITDA margin of 2018 rose by 8.8 percentage points year-on-year and was realized at 21.7%.

Our power plants in Africa, which provide foreign exchange denominated returns to our company and our country, did not have any effect on EBITDA in the first quarter of 2017, however contributed to EBITDA by TRY 73 million, TRY 134 million, TRY 163 million in the second, third and fourth quarters of 2017 respectively. Our power plants in Africa posted EBITDA of TRY 217 million in the third quarter of 2018, amounting to a total of TRY 556 million in 9M18.

Turkey and Northern Cyprus account for 74% of our sales revenue, while the operations in Africa account for 74% of EBITDA. Moreover, since our power plant in Northern Cyprus generate electricity on a guaranteed basis at a fixed tariff denominated in US Dollars, the sales revenue of the power plants in Northern Cyprus and Africa is realized in US Dollars. Therefore, 86% of our EBITDA was USD based while only 14% is TRY based.

Net financial debt/EBITDA ratio decreased from 8.6 in the first quarter of 2017 to 4.4 in the third quarter of 2018 thanks to the contribution of African sales.

To prevent excessive exposure to FX, we have been significantly converting our FX debt to TRY over the years. As of 9M2018, 56% of our bank loans is in TRY, while the FX portion of the loans are 41% USD and 3% EUR.

Africa

In Africa, a total of 386 MW of installed capacity has been commissioned in Ghana, Madagascar, and Mali, and our three power plants continue their commercial activities at full capacity. The effect of these power plants is better reflected on our financials as of the 1st quarter of 2018.

Ghana: 280 MW installed capacity has been operational since August 2017. Additional engines to take the capacity to 370 MW are ready as of 1st of August. ECG and Gridco have been invited to start the commissioning procedures.

Fuel price increase combined with liquidity issues resulted in distortion in regular payments. Nevertheless, we collect our invoices with small delays. In any case, these delays have not been to the extent where we would consider using the SBLC (stand by letter of credit). We have extended our SBLC confirmation (previously by Barclays) with Abu Dhabi Commercial Bank for another 3 years until the end of the current contract.

Ghana raised 2 bn USD after the issuance of 10y and 30y Eurobonds, with 7.62% and 8.62% interest rates respectively. Following such successful issuance, the Government is planning to finalize long lasting IMF standby deal, which should improve public spending starting from the last quarter of 2018 and positively impact the energy demand in the country.

Mali: 40 MW installed capacity has been up and running since September 2017. Negotiations are ongoing to extend the duration and capacity. The process has been delayed due to the presidential elections in Mali, but the negotiations are expected to resume in the last quarter of the year.

Madagascar: 66 MW installed capacity has been up and running since August 2017. We do not foresee any developments before 2020 concerning the Government's plan to build transmission lines for the installation of 54

MW capacity as part of the second phase of our agreement.

Due to political instability and increased public tension, presidential elections took place in November 7, 2018. The confirmed results are expected by November 28.

Madagascar has a new strategy of activating its sleeping assets. Out of these assets, we secured a 5-year Operation & Maintenance contract for a 24 MW power plant, expected to be operational by the last quarter of 2018.

Turkish Operations

•  Spot market prices are highly correlated to the increase in gas prices, and they increased from 180 in 1H18 to TRY 280 level in the third quarter of 2018, up by 50% on average.

•  Recent natural gas price increase has been offset by similar level of spot price increase, keeping the spark spread intact for our gas fired PPs.

•  The spot price increase will improve the profitability of our Bolu Göynük Thermal Power Plant. We sell about half of our production to the spot market, while the other half is sold to EÜAŞ. The EÜAŞ purchase price was revised from TRY226 in 2Q to TRY 260 in 3Q, as prices are revised up with CPI/PPI each quarter. It should be

noted that spot prices have even exceeded the EÜAŞ prices. Furthermore, capacity charges for Antalya CCGT and Bolu coal fired PP are being adjusted to reflect the new price ranges.

•  As per the license revision application submitted to EMRA, the installed capacity of Ali Metin Kazancı Antalya Combined Cycle Natural Gas Power Plant has been reduced from 1,150 MW to 900 MW, therefore the power plant's annual production capacity is also reduced from 9 billion KWh to 7 billion KWh. Since the cancelled production unit has not contributed to the actual energy generation in 2018, the license revision does not have any effect on the energy generation or operating income of the power plant in 2018.

•  We have hedged all our USD debt payment commitments due in 2018 and we have realized a profit of TRY 76.1 mn as a result of the settled amounts as of today.

Respectfully announced to the public and our esteemed investors.

We declare that the above disclosures are in accordance with the principles set out in the Communiqué Serial: VIII, No: 54 of the Capital Markets Board and fully reflect the information we have received on this matter; the information is consistent with our books, records and documents; and that we have shown all the necessary efforts to obtain accurate and complete information on the subject matter and we are responsible for these statements.