Investor Update. Rawi Corsiri Somruedee Somphong COO CFO. 13 November

Transcription

1 Investor Update 13 November 2002 Rawi Corsiri Somruedee Somphong COO CFO

2 Agenda Quarterly overview Results highlight Coal industry snapshot Business scenario 2

3 Quarterly overview Coal Business - Spot coal prices bottomed-out in 3Q and started to show a strong recovery in 4Q - Cost reduction programs have been done in mining process at Indominco & Kitadin - Successful implementation of Centralization and Marketing Logistics - Achieved shipments to European market Power Business - TECO achieved 100% AP during Aug-Oct after the inspectation in 2Q - On-course project financing process of BLCP Finance - Completion in securing long-term bank loan for ECD and bonds refinancing interim dividend of Bt1.50/share 3

4 Coal tonnage sales Unit in '000 tonnes 4,000 3,500 3,000 2,500 2,000 1,500 1, International sales - Indocoal International sales - Jorong Thai market sales 10% 1,815 1, , ,038 1,025 Jul-Sep, 01 Oct-Dec, 01 Jan-Mar, 02 Apr-Jun, 02 Jul-Sep, 02 A significant increase in volume sales in 3Q mainly from Thai market and International sales from Jorong Tonnage sales from Indocoal posted a slight decline due mainly from pending delivery in 4Q Anticipation of higher sales from Indocoal export in 4Q Source: Banpu (Indocoal consolidation started in Mar02) 4

5 Sales revenue 3,500 3,000 International sales - Indocoal International sales - Jorong Thai market sales 1% Steady sales revenue despite a sharp decline in coal prices Unit in '000 Baht 2,500 2,000 1,500 1, , , ,015 Significant increase on Thai market sales due to temporarily domestic supply shortage Indocoal sales revenue anticipated to increase with more shipment in 4Q 0 Jul-Sep, 01 Oct-Dec,01 Jan-Mar,02 Apr-Jun,02 Jul-Sep,02 Source: Banpu (Indocoal consolidation started in Mar02) 5

6 Market share - Thailand 3Q02 9-month 2002 Siam Cement 7% Others 21% Banpu 52% Banpu 44% Lanna 12% G Prem Jee 9% Siam Cement 6% SBC 6% G Prem Jee 9% Lanna 11% Others 20% Marubeni 3% Banpu s sales in Thailand achieved 52% market share YTD, Banpu shared 44% of the homeland market Source: Banpu Note: Total domestic coal consumptions in Thailand estimated at 10 MT 6

7 Agenda Quarterly overview Results highlight Coal industry snapshot Business scenario 7

8 Quarterly results Year-end Dec (Btm) 3Q02 2Q02 Revenues 3,048 3,078 Gross profit SG&A (373) (333) Royalty (249) (251) Other income EBIT Interest expense (168) (218) Equity income (bef. FX) 115 (13) Dividend income Income tax 19 (91) Minorities 11 (43) Net profit before extra items Non-recurring items ECD redemption premiums (19) (231) Mine property expenses (47) 57 Net profit before FX Net profit Despite a strong growth in tonnage sales, 3Q revenues were steady due to the sharp decline in coal price Coal price also impacts gross profit and EBIT margins Strong core earnings (before FX) mainly from lower interest expense, and improved equity income However, the bottom-line dragged by TECO s FX

9 9-month results Year-end Dec (Btm) 9-mo0 2 9-mo0 1 Revenues 7,742 4,136 Gross profit 2, SG&A (988) (894) Royalty (612) (79) Other income EBIT Interest expense (528) (359) Equity income (bef. FX) Dividend income Income tax (79) (65) Minorities (55) (23) Net profit before extra items 561 (242) Non-recurring items 384 1,099 ECD redemption premiums (337) (169) Mine property expense (25) - Net profit before FX Net profit 1, Indocoal consolidation enhanced Banpu s revenues by 71% y-y Gross profit margin significantly improved posttermination of EGAT s overburden work Core-operation profits (before FX) solidly improved thanks to strong associate contributions

10 Operational breakdown YTD 3Q02 2Q02 1Q02 Tonnage sales ('000 tonnes) Thai market 3,420 1,356 1,025 1,038 - Domestic 2, Import 1, Jorong 1, Indocoal 4,275 1,815 1, Sales revenue (Btm) Thai market 2,490 1, Domestic 1, Import 1, Jorong Indocoal 4,000 1,643 1, GPM Thai market 23% 25% 21% 23% - Domestic 38% 33% 38% 42% - Import 12% 20% 11% 6% Jorong 49% 44% 54% 48% Indocoal 24% 22% 25% 27% 10

11 Balance sheet Historical net D/E Jul-Sep, 01 Oct-Dec, 01 Jan-Mar, 02 Apr-Jun, 02 Jul-Sep, 02 (Btm) Jul-Sep, 01 Oct-Dec, 01 Jan-Mar, 02 Apr-Jun, 02 Jul-Sep, 02 Total assets 16,397 15,799 23,291 23,310 23,584 Total liabilities 8,980 8,988 15,246 14,399 9,962 Net debts 5,932 6,454 9,238 9,193 9,460 Equity 7,417 6,811 8,045 8,911 8,449 11

12 Agenda Quarterly overview Results highlight Coal industry snapshot Business scenario 12

13 Banpu s position in Indonesia Top-ten producers (mtpa) 2002E Sharing Adaro Indonesia % Kaltim Prima Coal % Kideco Jaya Agung % Banpu % Bukit Asam % BHP Aruthmin % Berau Coal 7.0 7% Ganung Bayan Pratama 2.5 2% Bukit Daiduri Enterprise 2.3 2% Others % Total % Source: Indonesia Coal Mining Association, Banpu Note: Banpu s productions include Indominco, Kitadin, and Jorong 13 Amongst key players in Indonesia, Banpu ranked 4th after Adaro, KPC, and Kideco Banpu s productions of 11.2mtpa in 2002 to be increase in 2004 with new production of Trubaindo Indonesia target to export just above 70% in 2002 the rest for domestic consumptions

14 Thermal coal spot price Kcal/kg Current 3Q 2Q 1Q Australia Gladstone Newcastle China - Qinghuadao Indonesia Kalimantan Russia Pacific Source: International Coal Report (28 Oct 2002) 14

15 Demand outlook Asia (Pacific Rim) Unit in million tonnes Taiwan S Korea HK Japan 4.4% CAGR Demand of thermal coal is expected to increase at a steady pace driven by Pacific Rim countries of 4% pa in next 10-yr* Assumptions used are conservative given: Average GDP growth of % Energy reform in Hong Kong Kyoto protocol Proposed coal tax of Japan Korean s utilities restructuring Nuclear capacity addition in Taiwan *Source: Hill & Associates (2002) 15

16 Demand outlook Other Asia China: A record imported of 5.6mt in 1H02 compared with 0.8mt during the same period last year Malaysia: A rapid demand driven by increased coal-fired power plants from 700MW in 2001 to 7,300MW in 2006 India: High demand frustrated by three obstacles: import levies, high rail rates, and limited port capacity Philippines: Despite a huge electricity consumption, coal-fired generation highly depends on the two government initiatives Thailand: Strong environmental opposition to some coal-fired power plants project Source: Hill & Associates (2002) 16

17 Supply outlook Asian exporters Unit in million tonnes Indonesia China 1.8% CAGR Under Hill s base case scenario, thermal coal exports from Asian producers will grow at 2% pa in the next 10-yr Indonesia: No stagnation on productions and exports despite the country s internal problems China: Exports based on political and economic decisions 50 0 Australia Australia: Market share hurt by China s glut, yet, managed to dominant Source: Hill & Associates (2002) 17

18 Agenda Quarterly overview Results highlight Coal industry snapshot Business scenario 18

19 Ramp-up capacity production of Indocoal 7 6 (MT) Post acquisition 30% 25% % 15% 10% 1 5% Indominco Kitadin Trubaindo Overall GPM 0% 19

20 Implementation of cost reduction program PIT 1 TWIN BOOM STACKER MINE STOCKYARD Crusher System 2 Cross Belt Sample SHIP LOADER 3 Coal Transport to Port 34 Km PORT STOCKYARD C25-1 Truck Dump C25-2 C25-3 C25-4 Conveyor 6.5 Km Result Quality CV : kcal Ash: 5.0% Ts : 0.8% INDOMINCO C24-1 C24-2 C C24-4 Cross Belt Sample

21 Other issues Imposition of Japan coal tax The Bali Blast News on possible delay of BLCP 21

22 Upcoming events Independent review of Banpu s reserves figures by international technical consulting firm Secure additional investment insurance policy of Indonesian assets worth US$55m 22

23 Question & Answer

24 Appendices Planned CAPEX Debt portfolio Summary of Indocoal financials Summary of TECO s financials BLCP development 24

25 Planned Capex (Maintained) (US$m) E 2004E 2005E 2006E Coal Thailand Jorong Indocoal Power Total

26 Debt portfolio: as at September 2002 Debentures BANPU ECD #2 BANPU #3 BANPU #4 BANPU #5 BANPU #6 Indocoal CD O/S amount US$3.1m Bt937.5m Bt750m Bt2,500m Bt500m US$30m Maturity date Apr-03 Nov-02 Nov-04 Apr-06 Apr Interest rate 2.75% 8.125% MLR-0.25% 5.80% MLR-0.375% 2.75% Rating "A-" (TRIS) "A-" (TRIS) Bank Loans BANPU Indocoal Long-term Bt2,280m US$61.1m Short-term Bt1,200m Rp5,936m 26

27 Indocoal s financials Y/E Dec (Btm) 3 Q0 2 2Q02 Revenues 1,932 1,911 Cost of sales (1,439) (1,420) SG&A (277) (120) Royalty (183) (193) Interest expenses (68) (84) Net operating profit (35) 94 FX translation (149) 572 Mining property (47) 57 Minority interest 0 0 Income tax 38 (88) Reported net profit (193)

28 TECO s financials Y/E Dec (Btm) 3Q02 2Q02 Revenues 2,376 1,767 Cost of sales (1,723) (1,423) SG&A (33) (34) Swap cost (123) (112) Interest expenses (113) (118) Net operating profit FX translation (438) 481 Reported net profit (54)

29 BLCP development 1,434MW coal-fired power plant (50% held by Banpu and CLP Powergen Southeast Asia, 47 km transmission line) 25-year PPA with EGAT, the national utility Environmental approvals in place for the industrial location 25-year Coal Supply agreement with coal source portfolio Financial close expected by July