3Q09 results and comments

Transcription

1 3Q09 results and comments INVESTOR & ANALYST UPDATE 11 November

2 DISCLAIMER The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Banpu plc. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. 2

3 1. Introduction 2. Focus: Organic Expansion 3. Operational review 4. Commercial review 5. Financial review 3

4 1. Introduction Virach Makaranithiroj Head of Investor Relations 4

5 Banpu in 3Q09: the figures Coal sales 5.31 Mt Unit: Bt. million Up 0.8 Mt Coal Power Total 18% Q-Q Y-Y Q-Q Revenue 12, ,881-3% 7% Equity income 618 1,058 1,676-2% -44% EBIT 4,166 1,416 5,582 7% -13% Net income 2,575 1,234 3,809 22% -4% 5

6 2. Focus: Organic Expansion Neil Turvey Head of Technical Development & Services 6

7 Organic expansion projects Existing operations Projects Central Kalimantan Possible projects Palangkaraya * Underground project * * Embalut and TM both under Kitadin ITM OPERATIONS & PROJECTS Mahakam River Trubaindo Bharinto Banjarmasin East Kalimantan South Kalimantan Jorong Tandung Mayang** UG*? Balikpapan Samarinda Indominco UG*? Embalut** In addition to acquisition growth, Banpu is always looking to generate maximum value growth from existing assets Banpu has a number of organic growth initiatives planned including: Bharinto (Ph.1) Embalut (Ph.1) [now operational] Tandung Mayang In the future further organic expansion may be possible via: Ph.2 projects at Bharinto and Embalut Underground developments at Indominco and Trubaindo 7

8 Current projects: factsheet Current organic expansion project summaries Bharinto (Ph.1) Embalut (Ph.1) Tandung Mayang First output December 2010 July 2009 January 2011 Avg. target output ~2 Mt ~2 Mt ~3 Mt Coal quality* 6,750 kcal/kg Sulfur 0.8% 5,750 kcal/kg Sulfur 0.2% 6,800 kcal/kg Sulfur 1.5% Reserves 9.0 Mt 9.1 Mt 8.6 Mt Strip ratio (avg.) 5.0 bcm/t 9.1 bcm/t 14.5 bcm/t Logistics to ship Barge Barge Truck haul Capital expenditure US$ 44 M (US$ 6 M spent in 2009) US$ 16 M (US$ 5 M spent-to-date) US$ 30 M (US$ 22 M spent-to-date) *Air dried basis 8

9 Current projects: reserves overview Bharinto (Ph.1) Embalut (Ph.1) Tandung Mayang Average SR 5.0 bcm/t OB 45 M bcm Reserves 9.0 Mt GCV: 6,750 kcal/kg Average SR 9.1 bcm/t OB 83 M bcm Average SR 14.5 OB 125 M bcm Sulfur: 0.8% bcm/t Ash: 4% Reserves 9.1 Mt GCV: 5,750 kcal/kg Sulfur: 0.2% Ash: 6% Reserves 8.6 Mt GCV: kcal/kg Sulfur: 1.5% Ash: 3% 9

10 Current projects: indicative ROM output targets +Phase 2? Bharinto (Ph.1) SR (bcm/t) Phase 2? Embalut (Ph.1) 0.7 SR (bcm/t) Tandung Mayang SR (bcm/t) INDICATIVE ONLY 10

11 Focus on Bharinto Aerial view schematic TRUBAIND O SOUTH BLOCK 29 KM. BHARINT OA PH 1 B PH 2 SECTION LINE MAHAKA M RIVER 38 KM. 15 KM. BUNYUT PORT TRUBAIND O NORTH BLOCK A Cross section schematic OB HIGH WALL BENCHES Coal seam OB Coal seam Approx depth 90 metres ILLUSTRATIVE ONLY B Bharinto project timeline Acquired concession Target operation by Dec Feasibility study Construction commenced Q309 (Ph.1) target: 2Mtpa 11

12 Focus on Embalut Aerial view schematic Cross section schematic MAHAKAM RIVER A INDOMINCO EMBALUT BONTANG COAL TERMINAL A OB Coal seam HIGH WALL BENCHES OB Coal seam Approx depth 80 metres B SECTION LINE B SAMARINDA ILLUSTRATIVE ONLY Embalut project timeline Operation ceased New drilling program Operation recommenced in mid

13 Focus on Tandung Mayang MINED OUT AREA A TANDUNG MAYANG SECTION LINE B Aerial view schematic INDOMINCO BONTANG CITY WEST BLOCK EAST BLOCK 35 KM. A Cross section schematic Mined out (Indominco) TM extension Coal seam Coal seam Coal seam OB Approx depth 160 metres HIGH WALL B BENCHES SANTAN RIVER BONTANG COAL TERMINAL ILLUSTRATIVE ONLY Tandung Mayang project timeline Operation ceased Feasibility study Tandung Mayang unit worked as contractor on adjacent IMM concession 2008 = Closure process Operation scheduled to recommence

14 3. Operational review Rawi Corsiri Chief Operating Officer 14

15 3. Operational review i) Coal business 15

16 Indonesian coal operations in 2009 ITM OPERATIONS & PROJECTS Showing targets for saleable coal output in 2009 East Kalimantan Central Kalimantan TRUBAINDO 5 Mt Bunyut Port BHARINTO (Start by end 2010) INDOMINCO 11.8 Mt Samarinda Balikpapan Bontang Coal Terminal Captive coalfired power project KITADIN 0.7 Mt Coal output : 3Q09 : 5.6 Mt 2009 : 20.5 Mt target Project update: Indominco East Block: started production as planned; good performance POWER COAL Palangkaraya Project Operation Project South Kalimantan Banjarmasin JORONG 3.0Mt Jorong Port Indominco Underground: feasibility analysis and pilot mine underway Bharinto: on-going development to commission by end

17 Indonesian quarterly output and SR analysis STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) Q08 1Q09 2Q09 3Q09 W Block E Block Q08 1Q09 2Q09 3Q Q08 1Q09 2Q09 3Q Q09 COAL OUTPUT (Mt) Mt 2.7Mt 2.7Mt Mt Mt COAL OUTPUT (Mt) COAL OUTPUT (Mt) COAL OUTPUT (Mt) 1.1Mt 1.3Mt 1.3Mt 1.2Mt 1.2Mt 0.6Mt 0.8Mt 0.9Mt 0.7Mt 0.6Mt 0.3Mt 0.4Mt 4Q08 1Q09 2Q09 3Q09 4Q09e 4Q08 1Q09 2Q09 3Q09 4Q09e 4Q08 1Q09 2Q09 3Q09 4Q09e 3Q09 4Q09e Indominco-Bontang Trubaindo Jorong Kitadin - Embalut CV: kcal/kg CV: kcal/kg CV: 5300 kcal/kg CV: 5750 kcal/kg Smooth start-up at E. Block; reducing SR Good performance due to favorable weather Rate back to normal due to normal stock levels Re-opened earlier than planned East block West block Note: output figures are saleable coal 17

18 China coal operations in 3Q09 BANPU CHINA 2009 COAL PRODUCTION TARGETS* PRICE vs. COST (RMB/ t) AVERAGE COAL PRICE PRICE vs. COST (RMB/ t) AVERAGE COAL PRICE PRODUCTION COST PRODUCTION COST Gaohe (45%) Shanxi Province 3Q08 2Q09 3Q09 3Q08 2Q09 3Q09 BEIJING COAL OUTPUT (Mt ROM) COAL OUTPUT (Mt ROM) Daning (56%) Shanxi Province 4 Mt 1.31Mt 0.61Mt 0.94Mt 1.01Mt 0.4Mt 0.37Mt 0.37Mt 0.36Mt HZTM (40%) Henan Province 1.4 Mt 3Q08 2Q09 3Q09 4Q09e Daning 3Q08 2Q09 3Q09 4Q09e Hebi Zhong Tai Mining POWER COAL Operation Project Operation Project * ROM production CV: Kcal/kg Banpu 56% L/W relocation from late Aug to end Sep resulted lower output; 4Q production forecast: 1Mt + CV: Kcal/kg Banpu 40% HZTM mine was ranked as First Class mine by China Coal Industry Association (top 1%) 18

19 3. Operational review ii) Power business 19

20 Power Thailand : BLCP Units: Bt. Million (100% basis) Total revenue Availability Payment (AP) Energy Payment (EP) Dispatch (%) Operating cost EBIT EBITDA Equity income 3Q09 Bt 1,058 m* 2Q/09 5,430 2,992 2,289 95% 2,551 2,371 2,879 3Q/09 5,609 3,031 2,358 96% 2,786 2,328 2,823 Q-Q 3% 1% 3% 9% -2% -2% * Based on Banpu s 50% interest; including FX gain Bt90million 20

21 Power China : BPIC in 3Q09 Sales* (USD m) EBITDA (USD m) Utilization (Hours) Power tariff (RMB/kwh) Coal price** (RMB/t) Although lower power sales (due to limited power dispatched by local grid to balance excessive power sold in 1H09) but EBITDA was still at high level Luannan Hebei Province, PRC Power 100MW; Steam 128tph (Banpu 100% ) 3Q , Q , Q , Higher power sales and relatively stable coal price raised EBITDA earning Zhengding Hebei Province, PRC Power 48MW; Steam 180tph (100%) 3Q , Q , Q , Enhancing plant operation helps boosting EBITDA earning Zouping Shandong Province, PRC Power 100MW; Steam 430tph (70%) 3Q , Q , Q , * Unaudited figures ** Including transportation (100% basis) 21

22 4. Commercial review Philip Gasteen Head of Marketing & Logistics 22

23 Banpu average selling prices in 3Q09 Banpu ASP Coal vs oil price relativity USD per tonne Rebase to Monthly BJI Monthly ASP Quarterly BJI WTI spot price API#4 FOB Richards Bay FOB Newcastle 150 ASP 3Q09 $69.5/t As at Oct 28th Quarterly ASP $72.5 (+41%) $66.0 (+34%) $77.5 (+38%) 50 BJI* Nov 5, 2009 $ Jan-07 Aug-07 Mar-08 Oct-08 May-09 Oct Jan-07 Aug-07 Feb-08 Sep-08 Apr-09 Jun-09 Sep-09 Oct-09 23

24 Indicative 2009 coal sales Coal sales contract and pricing status Comment Contract Status Contracted 100% Price Status Fixed 95% Basically all sold Thai coal trickle due to re-processing rejected material also sold Final shipments more a matter of Indonesian weather than sales or production 1.5% Provisionally Priced 3% Index TARGET SALES 2009: 20.5 Mt 24

25 Thermal coal market analysis updated 4Q 2009 Demand Supply 3Q 2009 Atlantic: exceptionally depressed, low gas prices India: monsoon impact, delays to big tender awards Japan, Korea, Taiwan: continuing slow recovery China: imports slow Other Asia: slow growth Colombia: heavy discounts USA: virtually no export Russia: FX protects costs S.Africa: export prices struggle Australia: thermal exports peak, start to return to met coal market China: exports dry up Indonesia: exceptional dry season, output up by 50mtpa 4Q 2009 Outlook Atlantic: same, gas prices rising India: buying resumes, major demand through to mid 2010 Japan: still down, but steel strong Korea, Taiwan: strong recovery China: import pace rises due high domestic prices, mostly from Indo Other Asia: same Colombia: prices and vols up USA: thermal remains very low Russia: domestic demand up and strong FX (exports at/below cost) S.Africa: prices lifted by India/Asia Australia: exports fall due met coal squeeze, prices rise > mid $70s China: same Indonesia: output down with wet season, stocks last one month 25

26 Indicative 2010 coal sales Coal sales contract and pricing status Comment Contract Status Contracted Fixed Price Status Sold with fixed price plus sold under hedging management is within 50%- 70% policy range at year end already. 79% 45% 20% Index Sold with fixed price has higher proportion of lower CV products. 21% 21% 14% Index linked sales at 20% is higher than in previous years. Uncontracted Uncontracted TARGET SALES 2010: 23.0 Mt Unpriced E.Block and return of Kitadin Embalut mean proportion of lower CV for 2010 rises; so 2010 ASP not meaningfully comparable to 2009 ASP 26

27 Coal sales by geographic destination (ITM and Thai) Cumulative coal sales 9M09 (total 13.9Mt) ITALY 1.1 CHINA 1.7Mt 1.0Mt 0.1Mt HONG KONG 0.6Mt 0.4Mt 0.1Mt 9M M 09 6M 09 9M S.KOREA 2.3Mt 0.4Mt 0.5Mt 0.5Mt 3.1 JAPAN 4.0Mt 3.2Mt 2.1Mt 1.1Mt 9M M 09 6M 09 9M 09 9M M 09 6M 09 9M Mt 0.7Mt 0.3Mt 0.5Mt 9M M 09 6M 09 9M 09 INDIA 0.9Mt 1.7Mt 1.4Mt 9M M09 6M09 9M09 TAIWAN 0.9 OTHERS* 1.4Mt 0.6Mt 0.2Mt 9M M 09 6M 09 9M 09 *Includes small, nonregular purchasers M M 09 6M 09 9M THAILAND 2.8Mt 1.0Mt 0.3Mt 1.5Mt INDONESIA 1.3Mt Mt 0.6Mt 0.3Mt PHILIPPINES 1.6Mt 1.4Mt Mt 0.4Mt Mt 0.3Mt 9M M 09 6M 09 9M 09 Mid-to-High CV Low-to-Mid CV 0.9Mt 1.7Mt Trend 2010 expectation 9M M 09 6M 09 9M 09 9M M 09 6M 09 9M 09 9M M 09 6M 09 9M 09 27

28 China thermal coal market review Comment Datong super mixed coal (6,000 kcal/kg) Shanxi super mixed coal (5,500 kcal/kg) Common mixed coal 1, Chinese economy improving: GDP 1Q to 3Q y-o-y increase 7.7 %; 2009 vs 2008 expecting +8% GDP growth, implying +/- 10% for 4Q (4,000 kcal/kg) RMB 668 end Oct 09 RMB 630 end Oct 09 RMB 425 end Oct 09 Consolidation of resources sector and focus on improvement of technology, management, safety and environmental standards will mean output will continue to drop. Coal imports surge on higher domestic coal prices but exports down Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09e Medium term government policy unclear, so, domestic price trend unclear. Likely tight demand/supply through in 2010, with over supply inland and under supply on coast. Source: 26 October,

29 5. Financial review Somruedee Somphong Chief Financial Officer 29

30 Sales revenues Units: Bt. million 14,351 +1,065 (248) (44) +43 (45) 13,881 12,932 +7% Q on Q -3% Y on Y Re-opened with sale volume 0.09mt Lower selling price Higher sale volume by 28% QoQ 3Q08 2Q09 Indominco Trubaindo Jorong Kitadin -Embalut Coal Thailand Others BPIC 3Q09 30

31 Average gross margin for coal 51% Bt 7,675 M Bt 8,017 M Coal sales (Bt millions) Bt 6,952M Bt 4,582 M Bt 3,709 M Gross margin (%) 39% 53% 50% 65% Bt 3,461 M Bt 1,146 M 56% 57% Bt 1,140 M Bt 802M 37% 47% 43% Bt 173 M 61% Bt 81 M Bt 45 M Bt 0.2M -16% -23% 3Q08 2Q09 3Q09 3Q08 2Q09 3Q09 3Q08 2Q09 3Q09 3Q09 3Q08 2Q09 3Q09 Indominco Trubaindo Jorong Kitadin Thai mines 31

32 Consolidated EBITDA Units: Bt. million (123) (1,143) 5,711 6,833 (23) (25) ,088 +7% Y on Y -11% Q on Q Power Bt1,485m +2% Q on Q +27% Y on Y Lower equity income from China Coal Coal Bt4,603m -14% Q on Q +1% Y on Y 3Q08 2Q09 Gross profit SG&A Royalty Equity Other Income Income China Coal Other expenses D&A coal EBITDA Power 3Q09 32

33 Consolidated net profit Units: Bt. million 3,111 3,982 (890) +16 (334) (250) , % Y on Y -4% Q on Q Gain from financial derivatives, mainly coal swaps Power Bt1,234m +6% Q on Q +40% Y on Y Strengthening of THB against USD Coal Bt2,575m -9% Q on Q +15% Y on Y 3Q08 2Q09 EBIT Financial charges Tax Minority Nonrecurring FX Net Profit Power 3Q09 33

34 Capital expenditure plans (total c.$466 M) INDICATIVE ONLY Units: USD million Hebi $ 5 M Gaohe $ 17 M CHINA: $22 M Hong Sa $ 255 M LAOS: $255 M* *Note: $255M is for only and is part of total estimated Banpu capex on Hong Sa project of approx. $400 M Tandung Mayang $ 8 M Embalut $ 11 M Trubaindo UG $ 11 M Bharinto $ 38 M Others $14 M Indominco UG $ 11 M E Block Conveyor $ 96 M INDONESIA: $189 M The capital expenditure figures shown above do not include estimates for maintenance or sustaining capital expenditure. 34

35 Balance sheet Net D/E (Times) Net gearing (%) Debt structure 0.66 Fixed 37% Floating 63% 25% 40% % 26% 19% Q09 As end of September

36 Questions & Answers 36

37 APPENDICES 37

38 Operating profit Units: Bt. million 3Q09 2Q09 3Q08 QoQ % YoY % Total sales revenues* 13,881 12,932 14,352 7% -3% Sales revenues Coal 12,801 11,846 13,382 8% -4% Sales revenues Power (BPIC) 999 1, % 6% Cost of sales (7,057) (6,431) (8,079) Gross profit* 6,824 6,501 6,273 5% 9% Gross profit - Coal 6,555 6,260 6,271 5% 5% Gross profit Power (BPIC) (9) 12% GPM 49% 50% 44% GPM - Coal 51% 53% 47% GPM Power (BPIC) 26% 22% -1% Note: * Including other business 38

39 Operating profit Units: Bt. million 3Q09 2Q09 3Q08 QoQ % YoY % Gross profit 6,824 6,501 6,273 5% 9% GPM 49% 50% 44% SG&A (1,151) (1,270) (1,449) Royalty (1,580) (1,457) (1,559) Income from associates 1,676 3,011 1,707 Dividend income Coal & Power Other income Other expenses - Operations (498) (473) (169) EBIT 5,582 6,406 5,212-13% 7% EBIT - Coal 4,166 5,056 4,141-18% 1% EBIT - Power 1,416 1,350 1,071 5% 32% EBITDA 6,088 6,833 5,711-11% 7% EBITDA - Coal 4,603 5,383 4,543-14% 1% EBITDA - Power 1,485 1,450 1,168 2% 27% 39

40 Net profit Units: Bt. million 3Q09 2Q09 3Q08 QoQ % YoY % EBIT Interest expenses 5,582 (312) 6,406 (332) 5,212 (382) -13% 7% Financial expenses (48) (47) (31) Income tax (core business) (1,214) (878) (920) Minorities (986) (736) (481) Net profit before extra items 3,021 4,413 3,397-32% -11% Non-recurring items* (496) Net profit before FX 3,991 4,618 2,902-14% 38% FX translations (183) (635) 210 Net profit 3,809 3,982 3,111-4% 22% EPS (Bt/share) Note: * Income from non-core assets and other non-operating expenses 40