Management Reports • Nov 8, 2024
Management Reports
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ACTIVITY REPORT FOR THE INTERIM PERIOD OF 1 JANUARY 2024- 30 SEPTEMBER 2024 PREPARED IN ACCORDANCE WITH THE CAPITAL MARKETS BOARD COMMUNIQUE NO:II-14.1
8 November 2024
| 1. | Vision and Mission………………………………………………………………………………………………………3 | |
|---|---|---|
| 2. | General Information……………………………………………………………………………………………….….…4 | |
| 2.1. Akenerji in Brief……………………………………………………………….……………………….……4 | ||
| 3. | Capital and Shareholding Structure………….………………………………………………………………….….…….5 | |
| 4. Board of Directors………………………………………………………………………………….………………………6 | ||
| 4.1. Member of Board of Directors……………………………………………………………………………6 | ||
| 4.2. Information on BoD Members………………………………………………………………………………6 | ||
| 4.3. Committees….………………………….……………………………………….………………………………9 | ||
| 4.4. Key Management Compensation ………….……………………………………………………………11 | ||
| 4.5. Jurisdictions of Board of Directors……………………………………….……………………………….….11 | ||
| 5. Employees………………….…………………………………………………………………………………………12 | ||
| 5.1. The Number of Employees……………….…………………………………….………………………….…12 | ||
| 5.2. Salary and Benefits Management……………………………………………………………………………12 | ||
| 6. | Company Operations and Material Developments………………….………………………………………………13 | |
| 6.1. Sector Developments ………………………………………………………….………………………….…13 | ||
| 6.2. The Company's Electricity Generation …………………………………………….…….………………….14 | ||
| 6.3. The Company's Sales Details…………………………………………………………………….……….…15 | ||
| 6.4. Investments…………….…………………………………………………………….……………………15 | ||
| 6.5. R&D activities of the Company…………….……………………………………….…………………15 | ||
| 6.6. Information on the Company's acquisition of its own shares ………………….……….……………15 | ||
| 6.7. Disclosure regarding the private and public audits …………….………………………………………15 | ||
| 6.8. Information on any material lawsuit filed against the Company16 | ||
| 6.9. Information regarding the related party transactions and balances16 | ||
| 7. Financial Analysis…………………………………………………………………………………………………… 17 | ||
| 8. Financial Sources …………………………………………………………………………………………….…….18 | ||
| 9. | Risk Management Policy and Internal Audit Mechanism………………………………………………….…………18 | |
| 10. Significant Events Regarding the Company …………………………………………………………………… 18 | ||
| 10.1. The Ordinary General Assembly and the selection of the independent auditor ………………….…18 | ||
| 10.2. Changes in the Articles of Association in the period ….……………………….….….………………….19 | ||
| 10.3. Corporate Governance Rating………………………………………………………………….……….…19 | ||
To maintain its leading position in the Turkish energy sector, and become one of the largest integrated companies that shape the industry.
To make reliable and long-term contributions to Türkiye's energy needs by operating with a quality-focused approach at every stage of the energy sector value chain.
Corporate culture is a set of characteristics that hold the organization together, unite and integrate it and distinguish it from others. Common beliefs and values form the basis of its culture.
Having commenced operations in 1989 as an autoproducer group under the umbrella of the Akkök Group of Companies, Akenerji Elektrik Üretim A.Ş. ("the Company") has been operating as the first independent electricity generation company established as an autoproducer since 2005. Being one of the largest players with its experience of more than 35 years in energy sector of Türkiye, Akenerji focused to become an integrated energy company by providing energy systems optimization and management services for industrial and commercial customers on energy efficiency services as well as its electricity generation and wholesale electricity trading operations.
As of today, Akenerji's total installed capacity is 1,224 MW, which is a 50%-50% strategic partnership between Akkök Holding and the Czech energy company ČEZ Group, one of the leading energy companies in Europe, and it can meet approximately 2.5% of Türkiye's energy needs on its own. Akenerji became the first Turkish company to register on the ¨European Energy Exchange¨ in 2021, the largest energy exchange in Europe.
Akenerji is continuing the project planning for the Kemah Hydroelectric Power Plant, which is planned to be established in the Erzincan province, with an installed capacity of 198 MW and an annual generation capacity of 560 GWh.
In 2000, Akenerji's shares were listed on Borsa Istanbul under the ticker AKENR
Akenerji's shares are traded on BIST Electricity, BIST Stars and BIST Sustainability Indices.
Our company's website is: http://www.akenerji.com.tr , the Company's commercial information is as follows:
| 01.01.2024-30.09.2024 |
|---|
| Akenerji Üretim A.Ş. |
| 12.05.1989 |
| 255005 |
| Büyük Mükellefler Vergi Dairesi 0110031317 |
| Miralay Şefik Bey Sokak No:15 Akhan Kat:3-4 Gümüşsuyu/İstanbul-Türkiye |
The addresses of our Branches are listed below:
| Uluabat Branch | Akçalar Fadıllı Köyü Yolu 5. km, Nilüfer-Bursa | |
|---|---|---|
| Bandırma Branch | Edincik Beldesi Aldede ve Deliklitaş Mevkii, Bandırma-Balıkesir | |
| Burç Branch | Besni İlçesi Aşağı Ağzı Köyü, Burç Mahallesi-Adıyaman | |
| Feke-I Branch | Sülemişli Mah. Sülemişli Küme Evler, No:33 Feke-Adana | |
| Feke-II Branch | Kısacıklı Mah. Alıçlı Küme Evler No: 14, Feke-Adana | |
| Gökkaya Branch | Himmetli Mah. Kazaklı Küme Evler No:73, Saimbeyli-Adana | |
| Himmetli Branch | Kovuk Çınar Mah. Kiraz Küme Evler No:73, Feke-Adana | |
| Bulam Branch | Doğanlı Köyü Mevkii, Merkez-Adıyaman | |
| ErzinBranch | Aşağıburnaz Mah. 2202 Sok. No:7/20 İç Kapı No:1 Erzin-Hatay |
The nature of business and registered addresses of the subsidiaries of the Company ("Subsidiaries") are provided below:
| Subsidiary | Nature of business |
Registered address |
|---|---|---|
| Akenerji Elektrik Enerjisi İthalat - İhracat ve Toptan Ticaret A.Ş. ("Akenerji Toptan") |
Electricity trading |
Gümüşsuyu/İstanbul |
| Akel Kemah Elektrik Üretim A.Ş. ("Akel Kemah") |
Electricity generation and trading |
Gümüşsuyu/İstanbul |
| Akenerji Doğalgaz İthalat İhracat ve Toptan Ticaret A.Ş. ("Akenerji Doğalgaz") |
Natural gas trading |
Gümüşsuyu/İstanbul |
| Akel Sungurlu Elektrik Üretim A.Ş. ("Akel Sungurlu")* | Electricity generation |
Gümüşsuyu/İstanbul |
| 5ER Enerji Tarım Hayvancılık A.Ş. ("5ER Enerji")* | Electricity generation |
Gümüşsuyu/İstanbul |
| Akenerji Company For Electric Energy Import And Export and Wholesale Trading/Contribution Branch ("Akenerji Toptan Khabat")** |
Electricity trading |
Erbil/Iraq |
| Aken Europe B.V. ("Aken B.V.")*** | Electricity trading |
Amsterdam/Netherlands |
*Akel Sungurlu and 5ER Enerji Company's shares are consolidated in the financial statements through a full consolidation method due to the capacity lease agreements and usufruct agreements signed by Akenerji Toptan, which includes an option for Akenerji Toptan to acquire the shares of Akel Sungurlu and 5ER Enerji at no cost at any time, and the control power being with Akenerji Toptan.
**The subsidiary branch operating in a different country is separately specified.
***Established on July 31, 2023, and included in the consolidated financial statements through the entire consolidation method.
Akenerji adopted the registered capital system applicable to the companies registered on the CMB and defined a limit to its registered capital for shares. The share capital and the limit on registered share capital as of 30 September 2024 and 31 December 2023 are as follows:
| 30 September 2024 | 31 December 2023 | |
|---|---|---|
| Limit on registered share capital (historical) |
1,500,000,000 | 1,500,000,000 |
| Issued capital | 729,164,000 | 729,164,000 |
The Company's shareholders and shareholding structure as of 30 September 2024 and 31 December 2023 are as follows:
| Share (%) | 30 September 2024 | Share (%) | 31 December 2023 | |
|---|---|---|---|---|
| CEZ a.s. | 37.36 | 272,425,943 | 37.36 | 272,425,943 |
| Akkök Holding A.Ş. | 20.43 | 148,989,090 | 20.43 | 148,989,090 |
| Akarsu Enerji Yatırımları San. Ve |
||||
| Ticaret A.Ş | 16.93 | 123,436,852 | 16.93 | 123,436,852 |
| Publicly held | 25.28 | 184,312,115 | 25.28 | 184,312,115 |
| 100.00 | 729,164,000 | 100.00 | 729,164,000 | |
| Adjustment to share capital |
11,532,694,825 | 11,532,694,825 | ||
| 12,261,858,825 | 12,261,858,825 |
The share capital of the Company consists of 72,916,400,000 shares with a nominal value of 1 (one) Kr and no privilege rights are provided for any kind of shares.
| Member of Board of Directors |
Duty | Date of Appointment |
End of Duty |
|---|---|---|---|
| Özlem Ataünal | Chairperson | 12.04.2022 | 12.04.2025 |
| Tomas Pleskac | Vice Chairperson | 12.04.2022 | 12.04.2025 |
| Serhan Gençer | Member / Chief Executive Officer | 12.04.2022 | 12.04.2025 |
| Ondrej Dvorak | Member | 12.04.2022 | 12.04.2025 |
| Jaroslav Macek | Member | 12.04.2022 | 12.04.2025 |
| Mehmet Kocaoğlu | Member | 01.06.2023 | 12.04.2025 |
| Demet Özdemir | Independent Member | 12.04.2022 | 12.04.2025 |
| Libor Kudlacek | Independent Member | 26.03.2024 | 12.04.2025 |
She graduated from Üsküdar American High School in 1985 and Uludağ University, Department of Business Administration in 1989. Starting her career at Iktisat Bank, Ataünal held various positions from Branch Manager to Customer Relations Management at Körfezbank. She joined Akkök Group in 2000 as Budget and Finance Manager of Akenerji. In 2005, Ataünal was promoted to the position of CFO of Akkök Holding. In 2012, she was appointed as the Executive Committee Member in charge of Finance. In 2017, she became a member of the Board of Directors of Akkök Holding. She has assumed various responsibilities over the years and is currently the President of the Energy Group. In addition to being a member of the Board of Directors of Akkök Holding, Ataünal has been a member of the Board of Directors of Akenerji, Sepaş Enerji, AKCEZ and Akgirişim. Ms. Ataünal has been a member of TÜSİAD since 2013.
Born in 1966, Tomáš Pleskač graduated from Mendel University of Agriculture and Forestry (Brno), Faculty of Business and Economics in 1989, and received his MBA from Prague University. In 1994, Mr. Pleskač started his career at CEZ Group and served as senior executive at various positions within the Group. Since 2006, Mr. Pleskač has served as member of the Board of Directors at CEZ, a. s. He became a Division International Chief Officer (in January 2008) and served as a Division International Chief Officer (until December 2016) while between April 2012 and May 2014 he led Division Distribution and International Affairs. Following the transformation of CEZ, a.s., Mr. Pleskač has served as the Chief Renewables and Distribution Officer since January 1, 2016. Mr. Pleskač is member of the Board of Directors at Akenerji since May 2009. Currently he holds a position of Deputy Chairperson of the Board of Directors at Akenerji.
Born in 1975 in Istanbul, Mr. Serhan Gençer graduated from the Department of Mechanical Engineering at Middle East Technical University. Started his professional career in 1998 at Unit Int. SA located in Belgium, where he worked in various countries in a variety of roles on several investment, business development projects, such as Project Manager and Project Development Manager, until December 2007. He worked as Project Director at Turcas Power & Gas Group from December 2007 to October 2009. Joined Akenerji as General Manager of Egemer Elektrik Üretim A.Ş. in October 2009, Gençer was appointed as Assistant General Manager of Akenerji responsible from generation at the beginning of 2013. In 2016, he appointed as the Vice General Manager of Akenerji responsible from trading by proxy in addition to his current duties and responsibilities. At the beginning of 2017, he was appointed as General Manager of Akenerji.
After graduating from University of Economics in Prague, Ondřej obtained his executive MBA degree from Katz Business School, University of Pittsburgh. Ondřej started in CEZ Group in 2006 in Corporate Finance, between 2014 and 2016 he was CFO of CEZ ICTS and then served as Head of Group Performance Department before joining Akenerji. As of January 2018, Ondřej Dvořák is the head of CEZ Türkiye Operations Department. At the same time, he assumed the role of Akenerji Financing and Financial Affairs Assistant General Manager between January 2018 and April 2023. Since August 2020, he has been serving as a Board Member, Deputy Chairperson of the Executive Committee and Deputy Chairperson of the Investment Committee.
Jaroslav Macek is currently responsible for the development of energy services in the CEZ Group companies outside the Czech Republic. He previously taken responsibility for the development and operation of the CEZ Group's foreign operations in and outside the Czech Republic. Jaroslav Macek also serves as Vice President or Member of the Audit Committee of various foreign companies belong to the CEZ Group. Jaroslav Macek speaks Russian on the basic level besides his fluent Czech and English. Before joining CEZ, he served as a member of the management team at Ukrsibbank (BNP Paribas group), and has been in charge of the Bank's Corporate Development Department, including preparation of the Bank's strategy and strategic developments. In addition, he worked at advisory department of PricewaterhouseCoopers responsible of performance improvement, financial and operational efficiency and development of practices.
Mehmet Kocaoğlu graduated from Middle East Technical University, Department of Electrical and Electronics Engineering in 2007. After his graduation, he worked as Project Manager, Business Development and Operations Manager in various companies. Mehmet Kocaoğlu, who has 15 years of experience in the energy sector with a background in management and technical consultancy, has worked as a consultant in various projects during the privatization process of the energy distribution sector in Türkiye and has undertaken various roles in projects funded by international financial institutions such as the World Bank, the European Bank for Reconstruction and Development (EBRD) and the United States Agency for International Development (USAID). Since 2011, Mehmet Kocaoğlu continued his career at MRC Türkiye (formerly AF Mercados EMI) and has been the General Manager of MRC Türkiye since 2017 and GETA Energy since 2022. He is also the Chairman of the Board of Directors at MRC Türkiye and GETA Energy, and a Board Member at Akenerji, SEPAŞ and AKCEZ.
Ms. Demet Özdemir started her career at Arthur Andersen. During her nearly 30-year career, where she spent the last 15 years as a Corporate Finance Senior Partner at EY (Ernst & Young), she provided merger, acquisition, public offering, restructuring and financial advisory services to nearly 1000 local and international companies. As Private Equity Sector Leader and Corporate Finance Partner at EY Türkiye and Central and Southeast Europe region, Ms. Özdemir assumed the role of Emerging Markets Leader in EMEIA (Europe, Middle East, India and Africa). Ms. Özdemir, who has been actively working on gender equality and women's empowerment in business life, has been a member of the EY Global Businesswomen Advisory Board, a member of the Management Committee of the EY WomenFast Forward and Women 3 Forum, and the EMEIA Leader who implemented the EY Entrepreneurial Women Leaders (EWW) Program. In 2015, she co-chaired the session on "Empowering Women Entrepreneurs" at the W20 Summit, which was held for the first time within the scope of the G20 in Istanbul. Currently, she is the member of the Board of Directors of Inveo Investment Holding and Osmanlı Yatırım Menkul Değerler A.Ş. and the British Turkish Chamber of Commerce. She is a Board Member of the Women's Association and Young Success Foundation, of which she is one of the founders. Ms. Özdemir is a Board Member of the Young Achievement Education Foundation and Women's Association, of which she is one of the founders. A graduate of METU Business Administration, Ms. Özdemir has a graduate degree in International Finance from the London School of Economics. Ms. Özdemir, a former national skier who won Turkish championships between 1987-1991, is married and has a son.
Born in 1957 in the Czech Republic, Mr. Libor Kudláček graduated from the Department of Economics and Regional Geography, Faculty of Natural Sciences, Charles University in Prague in 1981 and completed his PhD in 1983. Libor Kudláček started his professional career in 1982 at the Stavoprojekt Center for Urban Planning as a Project Manager on Town Planning, where he worked as Senior Project Manager until 1990. Between 1989 and 1992, he was a member of the Economic Committee and Budget Committee of the Federal Assembly of the Czech and Slovak Republic. From 1992 to 1996, he served as a Ministerial Advisor at the Ministry of National Real Estate Administration and Privatization of the Czech Republic and from 1996 to 1998 as a Ministerial Advisor at the Ministry of Environment of the Czech Republic, and from 1996 to 1998 as a Deputy Chairman of the Committee on Constitutional and Legal Affairs at the Chamber of Deputies of the Czech Republic Parliament. Since 1998, Mr. Kudláček has been working at Euroffice Praha - Brussel a.s. as a Senior Project Manager on various projects. He is currently the owner of Euroffice Praha - Brussel a.s., a Member of the Board of Directors, and a Consultant.
The Company's Board of Directors revises the structure and activities of the existing committees within the framework of provisions set under the Capital Markets Board's Corporate Governance Communiqué. Hence, the Audit Committee, Early Detection of Risk Committee and Corporate Governance Committee have been established. The duties and responsibilities of the Nomination Committee and the Remuneration Committee are fulfilled by the Corporate Governance Committee.
The Corporate Governance Committee has been established to monitor the Company's compliance with the Corporate Governance Principles, to carry out improvement activities in this regard and to submit proposals to the Board of Directors. The committee is responsible for determining whether the Corporate Governance Principles are applied in the Company or not, and if not, the reasons behind it and conflicts of interest arising from not following them
The Corporate Governance Committee serves as the Nomination Committee and the Remuneration Committee as well. It is responsible for the following duties; Establishing a transparent system for identifying, evaluating and training appropriate candidates for the Board of Directors and managerial positions with administrative responsibility, and determining policies and strategies in this regard, To make regular evaluations regarding the structure and efficiency of the Board of Directors and to present to the Board of Directors the recommendations regarding the amendments to these issues, Expressing its opinions on establishing the remuneration principles by taking the recommendations of the members of the Board of Directors and senior executives, while at the same time by taking into consideration the long-term objectives of the Company. It also carries out the duties of determining the criteria that can be used in remuneration in connection with the performance of the Company and the members of the Board of Directors.
The members of the Corporate Governance Committee are listed in the table below:
| Full Name | Title |
|---|---|
| Libor KUDLACEK | Chairperson |
| Demet ÖZDEMİR | Member |
| Ondrej DVORAK | Member |
| Özge ÖZEN AKSOY | Member |
The Audit Committee is responsible for taking all necessary measures to ensure that all internal and independent audits are conducted in an adequate and transparent manner and for effectively implementing the internal control system. In this context, the Committee has forwarded its suggestions to the Board of Directors on the issues that it is responsible for, including conveying its opinions and suggestions regarding the internal audit and internal control system.
The actions taken by the Board of Directors on the following issues are taken based on these reports:
The company has fulfilled its obligation to monitor the operation and effectiveness of the internal control system. Among the members of the Audit Committee within the Company, there are members who have experience in the fields of accounting / auditing and finance. The committee oversees the Company's accounting system, public disclosure of financial information, and independent audit, as well as the functioning and effectiveness of the Company's internal control and internal audit systems. The selection of an independent auditing firm, identification of the services to be received from this firm, preparation of independent audit contracts, initiation of the independent audit process, and the works of the independent auditing firm at every stage, are all carried out under the supervision of the audit committee. The independent auditing firm that will provide services to the Company, and the services to be received from this firm, are determined by the Audit Committee and then submitted to the Board of Directors for approval. The examination and conclusion of the complaints received by the Company regarding the Company's accounting, internal control system and independent audit are carried out by the Committee in Charge of Audit. The Audit Committee reports its evaluations concerning the truthfulness and accuracy of the annual and interim financial statements to be disclosed to the public, according to the accounting principles followed by the Company, together with the evaluations of the Company's respective executives and independent auditors, to the Board of Directors in written form. The Audit Committee immediately notifies the Board of Directors in writing about its findings that fall under the Committee's duties and responsibilities, as well as its evaluations and recommendations in respect thereof.
The members of the Audit Committee are listed in the table below:
| Full Name | Title |
|---|---|
| Demet ÖZDEMİR | Chairperson |
| Petr KALAS | Member |
Due to the alignment with article 378 of the Turkish Commercial Code, which was enacted in July 2012, the Early Detection of Risk Committee was established under the supervision of the Akenerji Board of Directors. The Committee ensures early detection of risk, taking the necessary precautions related to the risks identified, and management of the risk.
To fulfill its duties and responsibilities, the Committee presents reports to the Board of Directors, every two months. The Committee for the Early Detection of Risk was established by the Board of Directors on 24.09.2013 in accordance with the provisions of the relevant legislation. The Committee makes recommendations and suggestions to the Board of Directors on early detection, evaluation and assessment of the impact and probabilities of any type of risks that may affect the Company, be it strategic, financial or operational. The committee also makes proposals on the management of these risks in accordance with the corporate risk-taking profile of the Company, reporting, implementation of necessary measures related to identified risks, taking into consideration in decision making mechanisms and establishment and integration of effective internal control systems. The effectiveness of the Company's risk management and internal control systems is reviewed at least once a year by the Early Risk Detection Committee.
The members of the Early Detection of Risk Committee are listed in the table below:
| Full Name | Title |
|---|---|
| Demet ÖZDEMİR | Chairperson |
| Petr KALAS | Member |
| 1 January - 30 September 2024 |
1 January - 30 September 2023 |
1 July - 30 September 2024 |
1 July - 30 September 2023 |
|
|---|---|---|---|---|
| Salaries and benefits |
29,337,594 | 28,069,409 | 10,151,352 | 7,939,701 |
| Bonus payment |
9,299,425 | 15,261,782 | (408,189) | (1,037,996) |
| Attendance fee |
3,591,389 | 3,177,129 | 1,411,992 | 1,285,736 |
| 42,228,408 | 46,508,320 | 11,155,155 | 8,187,441 |
Board of Directors of Akenerji Elektrik Üretim A.Ş. ("Company") have adopted the following resolution in accordance with the Article 390/4 of Turkish Commercial Code:
1. ÖZLEM ATAÜNAL to be assigned as the Chairperson of the Board of Directors
2. TOMAS PLESKAC to be assigned as Vice-Chairperson of Board of Directors,
3. The signatories authorized to represent and bind our Company and the signatory groups be determined as follows:
GROUP (A) SIGNATURES GROUP (B) SIGNATURES ÖZLEM ATAÜNAL TOMAS PLESKAC
MEHMET KOCAOĞLU JAROSLAV MACEK Member of Board of Directors Member of Board of Directors
SERHAN GENÇER Member of Board of Directors / General Manager
Chairperson of Board of Directors Vice-Chairperson of Board of Directors
ONDREJ DVORAK Member of Board of Directors
ÖZGE ÖZEN AKSOY CFO
CAN GÜLCAN - Energy Generation Assistant General Manager
ORKUN EYİLİK
DUYGU ERZURUMLU CENGIZ HR & Business Support Director
Commercial Director YUSUF HÜSEYİN YÜCEBAŞ Government Relations Coordinator
4. The representation of our Company shall be as follows:
I. Our Company shall be represented and bound and be indebted and engaged in the broadest sense with JOINT SIGNATURES of a GROUP (A) signatory and a GROUP (B) signatory to be affixed under the corporate seal of the Company.
II. However, the Board of Directors is authorized to implement the issues stated in Article 5/ (I) of the Internal Regulation no. 09 approved by our Board of Directors on 13.12.2023. Before these issues are implemented, a decision of the Board of Directors is required.
III. Our Company shall be represented and bound with JOINT SIGNATURES of a GROUP (A) signatory and a GROUP (D) signatory under the corporate seal of the Company on the issues stated in Article 5/ (II) of the Internal Regulation no. 09 approved by our Board of Directors on13.12.2023.
IV. Our Company shall be represented and bound with JOINT SIGNATURES of a GROUP (B) signatory and a GROUP (C) signatory or GROUP (B) signatory and GROUP (D) signatory under the corporate seal of the Company on the issues stated in Article 5/ (III) of the Internal Regulation no. 09 approved by our Board of Directors on 13.12.2023.
V. Our Company shall be represented and bound (i) with JOINT SIGNATURE of any two signatories from the GROUPS (A), (B), (C) and (D) or (ii) with JOINT signature one from GROUP (E) signatory and the other from any signatory from the GROUPS (A), (B), (C) and (D) to be affixed under the corporate seal of the Company on the issues stated in Article 5/ (IV) of the Internal Regulation no. 09 approved by our Board of Directors on 13.12.2023.
Board of Directors of Akenerji Elektrik Üretim A.Ş. ("Company") have adopted the following resolution in accordance with the Article 390/4 of Turkish Commercial Code:
To appoint Dr. Tamer EMRE, as Strategic Planning and Corporate Governance Director of our Company, to be responsible for our Company's strategic planning and risk, government relations and legal consultancy functions, as of 13.05.2024 and to grant him the authority to represent and bind our Company as Group (C) Signatory in accordance with the Article 5 of the Internal Regulation no. 09 approved by our Board of Directors on 13.12.2023, registered by İstanbul Trade Registry Office on 21.02.2024.
As of 30 September 2024, the number of employees employed by the Company is 296 (31 December 2023: 319).
While creating the wage policy, we work with independent consultants to analyze the current data of both the sector and the market, and determine the wages of the level and position according to the job evaluations. We regularly review our wage and benefits systems every year and follow a fair and competitive policy. In line with our Human Resources Policy and Ethical Principles, as is the same with out other human resources processes, when determining wages and benefits, we make decisions free of discrimination, independent of issues such as race, language, religion, gender, ethnicity, and continue our work by only taking into account the value of the relevant position and level.
Our Company does not have any employees under the collective bargaining agreement. On the other hand, there are no obstacles to freedom of association or the effective recognition of the right to collective bargaining.
The total installed capacity of the Turkish electricity market reached 114,144 MW by the end of September 2024, marking a 7% increase compared to the end of 2023. Of the total installed capacity, 28% is hydro, 22% is natural gas, 19% is domestic and imported coal, 16% is solar, 11% is wind, 2% is biomass, 2% is geothermal, and the remaining 1% comes from other energy sources.
In the first nine months of the year, electricity generation in Türkiye increased by 7% compared to the same period last year, reaching 258,940GWh. The share of natural gas in total electricity generation was 21% in the first nine months of 2023, but due to decreased spark spreads and lower profit margins, it declined to 17% in the same period of 2024. Additionally, due to higher precipitation compared to the previous year, the share of hydroelectric power plants in total generation rose from 21% to 24%. In the first nine months of 2024, Türkiye's electricity consumption increased by 5% year-on-year, reaching 259,050 GWh.
Market Clearing Prices (PTF) decreased by 1.6% y/y in 9M24, with a nine-month average of TRY 2,173/MWh. During the same period, electricity prices in USD terms decreased by 35% due to the depreciation of the TRY against the USD. The average of The Botaş natural gas tariff was realized at TRY 12,000/1000 m3 in the first nine months of 2024 compared to an average of TRY 11,667/1000 m³ in the first nine months of 2023.
According to regulations published in the Official Gazette on December 31, 2023, power plants receiving loading and deloading instructions in the balancing power market will not receive capacity payments. Additionally, under the new regulation, hydroelectric power plants will also be excluded from the capacity mechanism. The methods for calculating capacity payments have been updated, with additional payments provided for the use of domestic coal or natural gas. As of 2024, a total of 43 power plants (including Erzin natural gas combined cycle power plant) will benefit from the capacity mechanism.
The Renewable Energy Resource Areas (YEKA) RES-3 auctions, developed by the Ministry of Energy and Natural Resources under the YEKA model, were completed on June 14, 2022. The YEKA GES-5 auction, initially planned for 2023, is expected to take place in 2024.
We generated a gross electricity production of 2,807 GWh in the first nine months of 2024 thanks to our balanced, sustainable, efficient and environmentally friendly portfolio.
| POWER PLANTS | Installed Capacity (MW) |
1 January- 30 September 2024 Gross Electricity Generation (MWh) |
Capacity Utilization Rate (%) |
|---|---|---|---|
| Ayyıldız WPP | 28 | 60,028 | 32% |
| Bulam HEPP | 7 | 23,240 | 50% |
| Burç Bendi ve HEPP | 28 | 58,530 | 33% |
| Uluabat HEPP | 100 | 195,043 | 30% |
| Feke II HEPP | 70 | 75,673 | 17% |
| Feke I HEPP | 30 | 63,103 | 33% |
| Gökkaya HEPP | 30 | 56,394 | 30% |
| Himmetli HEPP | 27 | 57,432 | 32% |
| Erzin NGPP | 904 | 2,218,004 | 37% |
The details of the Company's electricity sales in MWh are as follows:
| 1 January- | 1 January - | |
|---|---|---|
| 30 September 2024 | 30 September 2023 | |
| BILATERAL AGREEMENTS | 942,942 | 1,878,985 |
| STABILIZATİON AND RECONCILIATION MARKET (*) |
1,995,781 | 1,402,477 |
| ANCILLARY SERVICES (SFC) | 670,128 | 572,906 |
| CROSS BORDER ELECTRICITY TRADE | 49,250 | 62,036 |
| TOTAL | 3,658,100 | 3,916,404 |
*Includes 43,443 MWh Renewable Energy Resources Support Mechanism sales (30 September 2023:5,511 MWh).
We are in favor of a diverse approach to energy supply that considers all resources. This diversity is crucial both for sectoral sustainability and for creating added value by evaluating periodic cost advantages. We manage our operations with this resource diversity perspective. Under the regulations published regarding hybrid facilities, we are working on the installation of hybrid plants at our existing facilities, including Erzin NGCC, Burç Bendi, and HES.
The Kemah Hydroelectric Power Plant project stands out as one of Türkiye's leading hydroelectric projects with a high installed capacity of 198 MW, reservoir capacity, and strategic location. The State Hydraulic Works Final Project approval process of the project, which is planned to be established in Erzincan and expected to generate an average of 560 GWh of electricity per year, was completed in 2017, the license was modified in 2020 and the pre - construction period was extended. As one of the most significant investments of Akenerji Elektrik Üretim A.Ş., the project continues to undergo economic analyses focusing on conventional energy production alternatives, opportunities to benefit from YEKDEM incentives, and pumped storage systems as of 30 September 2024. The existing railway line passes through the reservoir area of the Kemah HPP, and after the project is completed, a portion of this line will be under water (inundated). The repositioning of this line is planned to be included in the upcoming period's investment plan as a public investment by the state, in coordination with Turkey Republic State Railways and the Ministry of Transport. Once the relocation plan is realized, the Company plans to proceed with the other necessary works for the investment. Due to the aforementioned economic analysis and alternative assessments and ongoing relocation plans, construction of Kemah project has not begun as of 30 September 2024, thus the project is not presented in financial statements. Additionally, licensing and investment planning processes are ongoing for the additional 6.2 MW capacity for the Ayyıldız Wind Power Plant. Once there are completed, the installed capacity of Ayyıldız WPP will increase to 34.4 MW. As Akenerji, we will continue our goal of creating added value not only through the operations at our own plants but also through the Operation and Maintenance services and capacity leasing activities that we plan to offer to potential clients.
Akenerji does not conduct any R&D activities. Market research and other necessary analyses are carried out by means of organizations providing professional consulting services.
The Company hasn't acquired any of its own shares within the 01.01.2024-30.09.2024 interim accounting period.
Akenerji hasn't been subject to any private or public audits within the 01.01.2024-30.09.2024 interim accounting period.
6.8. Information on any material lawsuit filed against the Company, which might have material impact on the Company's financial statues and activities, and the possible outcomes of such lawsuits, and explanations about administrative or judicial sanctions imposed on the Company and the members of the governing body due to practices in violation of applicable legislation:
There are no material lawsuits filed within the 01.01.2024-30.09.2024 interim accounting period against the Company, which might have material impact on the Company's financial status and activities, or administrative or judical sanctions imposed on the Company and the members of the governing body due to practices in violation of the applicable legislation.
6.9. Information regarding the related party transactions and balances required to be submitted to the partners in accordance with the legislation:
Information regarding the related party transactions and balances required to be submitted to the partners in accordance with the legislation is provided in footnote No. 15, named Related Party Disclosures, in the Financial Statements section.
Akenerji's condensed consolidated balance sheet and income statement for 9M2024 are as follows:
| Condensed consolidated balance sheet (TRY mn) |
30 September 2024 | 31 December 2023 |
|---|---|---|
| Current Assets | 3,357.8 | 3,433.2 |
| Non-Current Assets | 38,353.9 | 39,973.7 |
| Total Assets | 41,711.7 | 43,406.9 |
| Current Liabilities | 3,587.1 | 11,172.5 |
| Non-current Liabilities | 18,422.3 | 13,511.2 |
| Equity | 19,702.3 | 18,723.2 |
| Total Equity & Liabilities | 41,711.7 | 43,406.9 |
| Net Debt | (16,169.2) | (19,681.5) |
Current Assets: The company's current assets have decreased by 2% compared to December 31, 2023. Despite an increase of 326 million TRY in cash and cash equivalents as of 31 December 31 2023, the decrease of 113 million TRY in receivables, 82 million TRY in inventories, 129 million TRY in prepaid expenses, and 76 million TRY in other current assets had an impact.
Non-Current Assets: The Company's non-current assets decreased by TRY 1,620 million compared to 31 December 2023, primarily due to a reduction of TRY 1,317 million in property,plant and equipment.
Short-Term Liabilities: As of 30 September 2024, the Company's short-term financial liabilities stand at TRY 1.8 billion. The Facility Agreement is executed for the purpose of restructuring the terms of the whole portion amounting to TRY 3.9 billion and USD 64 million, with a maturity date of December 3, 2024 of the loan provided to our company within the Facility Agreement and as a result of this amendment, the maturity was redetermined as 18 months and the mentioned amount denominated in USD.
Long-Term Liabilities: After the restruction of the loan, its long term financial liabilities increased by TRY 4.3 billion compared to 31 December 2023.
| Summary Consolidated Income Statement (TRY mn) |
1 January -30 September 2024 |
1 January - 30 September 2023 |
Change y/y (%) |
|---|---|---|---|
| Revenue | 18,103.4 | 26,019.1 | -30% |
| Gross profit | 261.6 | 1,725.0 | -85% |
| Gross Margin (%) | 1.4% | 6.6% | -5.2 bp |
| Operating Profit/loss | (109.0) | 1,557.7 | N.M. |
| Financial Income/(expense) | (3,493.5) | (7,941.6) | -56% |
| Net income/ | 986.5 | 1,234.8 | -20% |
| EBITDA | 1,352.0 | 3,052.0 | -56% |
| EBITDA margin (%) | 7.5% | 11.7% | -4.2 bp |
Revenue: Revenues decreased by 30% y/y, reaching TRY 18 billion due to a decline in total generation volume and electricity prices. Additionally, regulations related to load-taking and load-dumping instructions led to an 89% reduction in revenue from this segment, further putting pressure on total revenue.
Gross Margin: Natural gas purchases have an important role within the production costs due to the operational activities of the Company's Erzin NGPP. Despite a reduction in production at the Erzin plant, the 30% decline in revenues has pressured the Company's gross profit.
Financial expenses: Its FX losses declined by 56% y/y in 9M24, mainly due to the lower depreciation of TRY in the same period last year.
Net income: Akenerji recorded a net income of TRY 986 million in 9M24 thanks to lower financial expenses.
The Company has no unredemmed capital, and the Company is not in a debt-choked status.
The main financial sources of our Company are comprised of the cash created from the operations, the funds derived from the financial institutions and the share capital.
As of 30 September 2024, the Company has;
TRY 281 million, USD 43 million short-term borrowings and EUR 1.2 million and TRY 15.6 million short-term leasing liabilities, and
USD 474 million long-term borrowings and EUR 3.8 million and TRY 119.6 million long-term leasing liabilities.
Akenerji aims to focus on the unpredictability of financial markets including the changes in foreign exchange rates and interest rates and seeks to minimize potential adverse effects on the Company's financial performance.
The Board of Directors establishes internal control systems, including risk management and information systems and processes that aim at minimizing the effects of risks that would affect the stakeholders of the Company, particularly the shareholders, by obtaining the suggestions of the related committees of the Board of Directors.
The Company's risk inventory is one of the most important follow-up tools used in Akenerji's risk management activities. The risk inventory includes the operational, financial, reputational and strategic risks of the Company. Risks with high or very high-level risk scores are monitored at the level of the Board of Directors. Detailed action plans are created for such risks, and a risk owner is assigned for each of these risks. The risk owner is responsible for managing the related risk within the framework of the agreed action plan. Thus, the risk management philosophy grew into a permanent item on the agenda of routine business of Akenerji executives. Updated in line with sectoral and institutional developments, this philosophy has become an integral part of the Company's applications.
The current internal control system, particularly enhancing the efficiency and productivity of Company operations, ensuring reliability in financial reporting, and compliance with applicable law and legislation, is being audited by the Akenerji Internal Audit Department in coordination with the Internal Audit Departments in Akkök Holding A.Ş. and ČEZ a.s., in accordance with the annual internal audit plan. The outcome of the audit is reported to the Audit Committee. The effectiveness of internal auditing operations has been reviewed during the year by Audit Committee. Opinions of the internal auditor, external auditor, or other Company executives have also been obtained when required.
It was held on 3 May 2024. Shareholders representing 74.87% of the Company's capital attended the meeting. Shareholders used their right to ask questions and no motion with the exception of the agenda was presented. There were no questions from shareholders answered in writing after the General Assembly in line with principle 1.3.5 of Corporate Governance Notification no. II-17.1 of the Board of Directors that could not be responded to during the meeting.
At the Ordinary General Assembly Meeting of the Company for the year 2023 held on 3 May 2024, it was decided to select PwC Bağımsız Denetim Ve Serbest Muhasebeci Mali Müşavirlik Anonim Şirketi as the independent auditor of our Company for auditing financial statements and reports of our Company for the year of 2024, in line with the report of the Audit Committee and as per the resolution of the Board of Directors, in accordance with the relevant provisions of Turkish Commercial Code, "Communique on Independent Auditing Standards in Capital Markets" Serial:X, No:28 of Capital Markets Board and the Decision of Energy Market Regulatory Authority on Auditing of Real Persons and Legal Entities Displaying Activity in Energy Market" dated 03.03.2015 and numbered 5507.
No changes were made to the Articles of Association in the period.
Our Company has completed the 'Corporate Governance Rating Report,' carried out by SAHA Corporate Governance and Credit Rating Services Inc., an authorized rating agency with permission to conduct evaluations by the Capital Markets Board (SPK) Corporate Governance Principles in Türkiye. The Corporate Governance Rating for our Company has been determined as 9.57 out of 10, with sub-scores as follows: Shareholders 95.28, Public Disclosure and Transparency 97.79, Stakeholders 97.43, and Board of Directors 93.81, all on a scale of 100.
Best Regards,
Ondrej DVORAK Serhan GENÇER
BoD Member Chief Executive Officer
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