PT Toba Bara Sejahtra Tbk ( Toba ) Company Presentation First Semester 2016

Transcription

1 PT Toba Bara Sejahtra Tbk ( Toba ) Company Presentation First Semester

2 Disclaimer These materials have been prepared by PT Toba Bara Sejahtra (the Company ). These materials may contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as expects, plan, will, estimates, projects, intends, or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances. These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate professional advice.

3 Table of Contents 1 Company Profile 2 1H16 Operational Highlights 3 1H16 Financial Highlights 4 1H16 Marketing Highlights 5 Guidance for 2016

4 1 Company Profile 4

5 Toba Bara Sejahtra in Brief Toba specializes in thermal coal production and comprises of three mining subsidiaries: Adimitra Baratama Nusantara (ABN), Indomining (IM) and Trisensa Mineral Utama (TMU) JORC-compliant proved and probable reserves of 147 MM tons and measured, indicated and inferred resources of 236 MM tons Coal brands with mid to upper range calorific values (CV) of 4,700-5,800 kcal/kg GAR Strong production growth profile, registering ~34% CAGR between 2008 and Produced 6.5 MM tons in 2013 and grew ~25% to 8.1 MM tons in 2014 Prime location near Capital of East Kalimantan and proximity to waterways provides operational cost edge to grow as logistical & operational center for the area Diversified Thermal Coal Reserves and Resources Strong Growth Profile

6 Strategic Mine Locations Major City Jetty Transhipment Point TMU IM Hauling Road Muara Berau Samarinda Major city to north is less than 50 km TMU 25 km Kutai Energi ABN IM ~5 km IM jetty ABN jetty Distance from pit to jetty, with closest one ~5 km and furthest ~25 km Close proximity to jetty and transhipment point of Muara Jawa ~55 km (total ~120 km) Makassar Strait Adjacent locations for all 3 mines Balikpapan ~65 km Muara Jawa Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties), giving significant operating leverage vs other concessions in surrounding areas

7 Infrastructure & Operational Capabilities Short Coal Hauling Distance < 5km CPP Capacity (cap) Ramped Up to 6 Mn Tons/Annum (TPA) IM Conveyor for TMU usage & Others Short Coal Hauling Distance ~4km TMU IM ~16 km Hauling Road to Connect with ABN TMU ABN High Built CPP Cap up to 10 Mn TPA Loading Speed of 1,800 TPH Mine Ops Commenced at Block 4 Toba s Concessions Underpass Infrastructure Integrated CPP and Jetty Ops with IM Note: PT Adimitra Baratama Nusantara (ABN) PT Indomining (IM) PT Trisensa Mineral Utama (TMU)

8 Ownership Structure PT Toba Sejahtra Davit Togar Pandjaitan PT Bara Makmur Abadi PT Sinergi Sukses Utama Roby Budi Prakoso Public 71.8% 0.8% 6.2% 5.1% 3.6% 12.5% ABN Minorities 49.0% 99.99% (1) PT Toba Bumi Energi ( TBE ) 51.00% 99.99% (1) 99.99% (1) 90.00% 60.00% License 20-year Production Operation Mining Permit ( IUP-OP ) expiring in December 2029 IUP-OP was converted from Kuasa Pertambangan ( KP ) in 2009 IUP-OP expires in June 2013 IUP-OP was converted from KP in 2010 IUP-OP extension was completed in March 2013 (First out of 2 extensions: in 2023, with tenor of 10 years each) 13-year IUP-OP expires in December 2023 IUP-OP was converted from a KP in 2010 Plantation permit of PT Perkebunan Kaltim Utama I (PKU) expires in 2036 PT Gorontalo Listrik Perdana (GLP) was established in Feb 2016 to undertake coal-fired power plant project in Gorontalo, Sulawesi Area 2,990 ha 683 ha 3,414 ha 8,633 ha (Right to Use Land) Gorontalo, Sulawesi Reserve Reserves: 117 MT- JORC Resources: 156 MT- JORC Reserve: 22 MT- JORC Resources: 37 MT- JORC Reserves : 8 MT - JORC Resources: 43 MT- JORC Planted Area: 2,896 ha N/A Note: 1. Figures are rounded off 2. CFPP: Coal-Fired Power Plant 3. PLN: PT Perusahaan Listrik Negara (Persero) 4. IPP: Independent Power Producer 5. PPA: Power Purchase Agreement

9 1H16 Milestones 1 st April 2016: IM and PT Cipta Kridatama (subsidiary of PT ABM Investama Tbk) entered into a fiveyear mining contract valued at US$ 82 million over the contract period 29 th May 2016: ABN was awarded the PROPER Gold Mining Award for Environmental Management ( ) from the Governor of East Kalimantan 29 th May 2016: IM was awarded the PROPER Green Mining Award for Environmental Management ( ) from the Governor of East Kalimantan 29 th May 2016: TMU was awarded the PROPER Green Mining Award for Environmental Management ( ) from the Governor of East Kalimantan

10 2 1H16 Operational Highlights 10

11 Realization 1H 2016 Focused on profitable production output through optimization of : Infrastructure and connectivity sharing (hauling road, coal processing plants (CPP), & jetties) Joint mine plan between three adjacent operating mines Competitive & premium coal pricing driven by strong coal branding from consistency in scheduled delivery/product quality and established customer relationship with diversified customer base Average Selling Price (ASP) outperformance relative to benchmark Newcastle due to sale executions based on well-timed predictions in market trends Operational 1H15 1H16 Δ% NEWC Index US$/ton (18.8)% ASP US$/ton (20.8)% Production Vol mn ton (6.7)% Sales Vol mn ton (6.1)% Stripping Ratio x % Financial 1H15 1H16 Δ% Sales US$ mn (27.1)% EBITDA US$ mn (26.2)% Net Profit US$ mn (39.2)% EBITDA/ton US$/ton (20.0)% Note: (1) EBITDA = Gross Profit selling expenses G&A + depreciation and amortization

12 Guidance 2016 Production Guidance Annual Coal Production Mt : In Million Tons 0.8 ABN IM TMU Cumulative production achievement >10 Mt Cumulative production achievement >20 Mt Production volume rose from only 800K tons in 2008 to 6.1 mn tons in 2015, booking CAGR growth of 33.6% over 8 years 2015 overall results from subsidiaries came in line with 2015 annual guidance With strategy to sustain certain margin, while preserving life-of-mine (LoM) reserves, 2016 production guidance is estimated at mn tons 2016 Stripping Ratio (SR) is expected to stabilize at 11x- 12x, as per the mine plan Production Vol. (Mt) E ABN (Mt) IM (Mt) TMU (Mt) SR (x) 11.9x 10.5x 9.9x 12.7x 14.9x 13.4x 13.3x 12.3x 11x-12x

13 1H16 Operational Performance Quarterly Production & SR Production in Thousand Tons 2,500 2,000 1,500 1, x Production Summary MT: Million Tons 12.5x 13.8x 12.4x TOBA 12.5x 12.0x 12.1x 12.4x 13.9x 2,160 2,330 1,653 1,505 1,469 1,565 1,529 1,503 1,269 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Production Volume (000) Stripping Ratio 20.0x 15.0x 10.0x 5.0x 0.0x Q-o-q production volume of 1.3 mn tons in 2Q16 came in line with 2016 quarterly guidance of mn tons 2Q16 SR rose to 13.9x from 12.4x in 1Q16 due primarily to pre-stripping activity at ABN new pit SR in subsequent quarter is expected to remain at similar level before normalizing in 4Q16 1H15 1H16 Change Comment Production Volume (6.7)% Production volume in 1H16 stabilized at 2.8 mn tons in line with mine plan, while ensuring certain margin and optimizing reserve preservation Sales Volume (6.1)% 1H16 sales volume tracked its 1H16 production volume SR (x) % SR edged up due to pre-stripping at ABN, and in line with mine plan

14 ABN Operational Performance IM ABN Quarterly Production & SR Production in Thousand Tons 1,200 ABN 20x TMU 1, x 15x x 13.0x 12.6x 12.9x 10x PT Kutai Energi x , Q15 3Q15 4Q15 1Q16 2Q16 0x Production Volume (000) Stripping Ratio Key Highlights 2Q16 quarterly production decreased y-o-y and q-o-q from 1Q16 and 2Q15 respectively due to prestripping activity SR in 2Q16 rose to 15.0x due to pre-stripping activity at ABN s opening of new pit

15 IM Operational Performance Quarterly Production & SR Production in Thousand Tons IM ABN x TMU x 12.2x 13.6x 12.0x 12.0x 10x 150 PT Kutai Energi Q15 3Q15 4Q15 1Q16 2Q16 5x 0x Production Volume (000) Stripping Ratio Key Highlights Production increase to 173K tons in 1H16 came in line with 2016 internal quarterly guidance of 125K - 175K tons SR in 1Q16 stabilized y-o-y and q-o-q at 12.0x

16 TMU Operational Performance IM Quarterly Production & SR Production in Thousand Tons ABN 350 TMU 15x 300 PT Kutai Energi x 8.3x 8.3x 10.8x 10.6x 10x 5x Q15 3Q15 4Q15 1Q16 2Q16 0x Production Volume (000) Stripping Ratio Note: Hauling road Key Highlights 2Q16 production volume came in at 220K tons, slightly below 2016 internal quarterly production guidance of 225K-325K tons 2Q16 SR on q-o-q stabilized but edged slightly on y-o-y basis

17 3 1H16 Financial Highlights 17

18 Evolution of Quarterly FOB Cash Cost from 3Q12-2Q16 Quarterly FOB Cash Cost In US$/ton x x x x x x 13.8x 12.7x 12.7x x 13.8x x 12.4x 12.5x 12.0x 12.1x 12.4x x 15x 12x 9x 6x 20 3x Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 FOB cash cost Adj. FOB cash cost SR 0x Divergence between SR averaging at 12x-13x and falling FOB cash cost reflect Toba operating within mine plan and more efficiently over time Notes: (1) FOB Cash Cost = COGS including royalty and selling & marketing expense depreciation and amortization (2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty depreciation & amortization of deferred exploration & development costs and excluding deferred stripping cost

19 Operational & Financial Highlights Production (mn tons) 1 Production volume slipped y-o-y in 1H16 due to pre-stripping in 2Q16 at ABN s new mine pit % TMU IM ABN 1H15 1H16 2 FOB cash cost fell by 22.1% y-o-y on continuous cost management initiatives, better mine plan execution FOB Cash Cost (US$/ton) % TMU IM ABN EBITDA declined by 26.2% y-o-y to US$ 22.0 mn in 1H16, yet EBITDA margin rose slightly 15.6% to 15.8% over the same period due to same reasons above Notes: (1) FOB Cash Cost = COGS inc. royalty and selling & marketing expense depreciation & amortization (2) EBITDA = Gross Profit selling expenses G&A + depreciation & amortization + other noncash items 1H15 1H16 EBITDA (US$ mn) % (0.6) 1H15 1H16 TMU IM ABN

20 Notes: (1) FOB Cash Cost = COGS including royalty and selling expense depreciation and amortization (2) EBITDA = Gross Profit selling expenses G&A + depreciation and amortization Financial Performance Financial and Operational Highlights All figures are in million US$ unless otherwise stated 1Q16 2Q16 Changes 1H15 1H16 Changes Operation Sales Volume mn ton % (6.1)% Production Volume mn ton (13.3)% (6.7)% Stripping Ratio (SR) x % % FOB Cash Cost* US$/ton % (22.1)% NEWC Index Price US$/ton % (18.8)% Average Selling Price (ASP) US$/ton (5.3)% (20.8)% Financial Performance Profit (Loss) 1Q16 2Q16 Changes 1H15 1H16 Changes Sales US$ mn % (27.1)% Cost of Goods Sold US$ mn % (28.3)% Gross Profit US$ mn (2.8)% (22.2)% Operating Profit US$ mn (8.4)% (32.8)% EBITDA** US$ mn (5.3)% (26.2)% Profit for the Period US$ mn (21.2)% (39.2)% EBITDA/ton US$/ton (24.1)% (20.0)% Operating Cash Flow US$/ton (42.1)% % CAPEX US$ mn % % Balance Sheet 1Q16 2Q16 Changes Dec'15 Jun'16 Changes Interest Bearing Debt US$ mn (5.4)% (9.4)% Cash and Cash Equivalents US$ mn (17.1)% (10.5)% Net Debt*** US$ mn % (6.5)% Total Assets US$ mn (4.9)% (4.9)% Total Liabilities US$ mn (8.5)% (12.2)% Total Equity US$ mn (2.1)% % Financial Ratios Gross Profit Margin % 22.5% 18.4% 18.9% 20.2% EBITDA Margin % 17.8% 14.2% 15.6% 15.8% Operating Profit Margin % 13.1% 10.1% 12.5% 11.5% SR edged up in 1H16 due to prestripping activity in 2Q16 as ABN opened new pit NEWC index price decreased 18.8% y- o-y in 1H16, while it gained ground q- o-q in 2Q16 due to global catalyst from China s supply cut Gross profit margin, and EBITDA margin each rose y-o-y to 1H16 resulting from better operational performance, disciplined cost management initiatives, and welltimed marketing strategy Balance sheet position remains positive despite lower cash holdings in 1H16, while debt exposure fell due to partial loan repayment

21 Balance Sheet Consolidated Balance Sheet In Million US$ Net Debt to EBITDA 2) In Million US$ Balance Sheet Dec 15 1) Mar 16 Changes Cash and Cash Equivalent % Total Assets % Interest Bearing Debt (4.2)% Total Liabilities (4.0)% Shareholders Equity % Q15 3Q15 4Q15 1Q16 2Q16 Ratio (x) Net Debt (Cash) (US$ Mn) EBITDA (US$ Mn) Total assets fell 4.9% to US$ mn at end-june 2016 from US$ mn as per end 2015, while total liabilities dropped much more by 12.2% to US$ mn over the same period due mainly to loan repayment Total equity value rose slightly 1.1% to US$ mn from US$ mn, due to additional profit for the period Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at below 2x Note: (1) Restated due to compliance on PSAK 24R implementation (2) EBITDA = Gross Profit selling expenses G&A + depreciation and amortization

22 4 1H16 Marketing Highlights 22

23 US$/ton Optimizing Selling Price & Product Quality Covergence of NEWC Index & ASP (in US$/ton) Sales by Product Mainly Contributed by 5600 (GAR) NEWC ASP Q16 2Q16 Million Tons % 5600 HS 5600 RS 35.5% 30.0% % 5900 LS 8.2% Others 4.0% Average NEWC Index declined by 18.8% from US$ 62.7/ton in 1H15 to US$ 50.9/ton in 1H16, while ASP contracted by 20.8% from US$ 57.3/ton to US$ 45.4/ton over the same period at ~65.5%, the 5600 GAR products account for the largest portion of 1H16 total sales volume As of 1H16, 83.0% of 2016 sales volume target has been secured mostly at fixed price Notes: - HS is High Sulphur, max 2.0% - RS is Regular Sulphur, max 1.0% - LS is Low Sulphur, max 0.6%

24 Diversified Market Base & Customer Base Sales Destinations by Country Total Sales by Customer Type Million Tons South Korea Taiwan 26.4% 6.0% 28.6% Malaysia India 8.7% 23.6% 71.4% China 7.1% Japan 6.2% Vietnam 2.1% Thailand Bangladesh 10.0% 2.3% Traders End-Users Hong Kong 2.3% Others 5.5% Initiatives Undertaken: Building well-diversified export destination base and customer base backed by positive demand prospects and quality customers respectively: In 2015, South Korea replaced China as main export destination, while the customer base consisted of mainly reputable international traders with growing composition of notable regional end-users, increasing from 3.6% in 2014 to 36.8% in 2015 In 1H16, end-users composition stabilized at 28.6% level as compared to 33.6% in 1H15 Maintaining product brand with customers by making good on delivery with specifications ensured Achieving tighter discount to even premium to Newcastle adjusted reference price

25 5 Guidance for

26 Snapshot of 2016F F NEWC Coal Price (US$/ton) Operation Prod Vol (mn ton) SR (x) 13.3x 12.3x x - 12x Objective is to execute disciplined mine plan that generates certain margin without compromising long term reserves Post 17.6% and 22.1% y-o-y FOB cash cost reductions in 2015 and 1H16 respectively, joint mine plan and infrastructure sharing are to be better streamlined among 3 operating subsidiaries, with initiatives to lower costs throughout value chain from mining to logistics costs Marketing is to focus on better diversification of export destination base and customer base (ideal mix between traders and end-users) and maintaining product branding 2016 CAPEX is estimated at US$ 5-8 mn to support mainly mining facilities and equipment, and plantation operation of PKU. Currently, PKU is in final stage of constructing palm oil mill with capacity of 30 fresh fruit bunch (FFB) / hour to be completed by first semester 2016 Toba aspires to become an integrated energy company in the long run through sustainable growth. To maximize existing assets and ensure future sustainable growth backed by more stable revenue stream, it is engaging in downstream integration in the power sector

27 THANK YOU