1Q07 results and comments

Transcription

1 1Q07 results and comments INVESTOR & ANALYST UPDATE 24 th May

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: ITM listing 3. Operational review 4. Commercial review 5. Financial review 3

4 1. Introduction Virach Makaranithiroj Head of Investor Relations 4

5 Highlights of 1Q07 the figures Coal Power Total Q-Q Revenue Bt 5,783 m Bt 917 m Bt 6,700 m -34% EBIT Bt 799 m Bt 1,522 m Bt 2,321 m 0% Net income Bt 113 m Bt 1,081 m Bt 1,194 m +4% * Coal sales 4.3 MT * +21% before nonrecurring items Down 2.2 MT -34% Q-Q 5

6 2. Focus: ITM listing Somruedee Somphong Chief Financial Officer 6

7 Introduction Banpu planning listing/ipo of Indonesian coal interests on Jakarta Stock Exchange ( JSX ) km KALIMANTAN Intention is to list assets through PT Indo Tambangraya Megah ( ITM ) by Q Main reasons for listing: Facilitate further growth in Indonesia Raise capital at asset level Increase accountability Enhance value transparency TRUBAINDO 5mtpa JORONG 3.5mtpa BHARINTO Project:first output 2009 INDOMINCO KITADIN- EMBALUT Suspended operation 10.5mtpa Bontang coal terminal Location of Banpu s Indonesian coal assets 7

8 ITM structure At the time of the IPO, ITM will consist of three operating mines (Indominco, Trubaindo and Jorong) and one important growth project (Bharinto). ITM will also have one suspended operation (Kitadin). BMC 100% BMS 95% Centralink 100% ITM Banpu Minerals Company (Banpu PLC 100%) Banpu Minerals Singapore PT Centralink Wisesa International PT Indo Tambangraya Megah Acquired Bharinto in 2004 Jorong was acquired in 1997 and will be merged into ITM in 2007 prior to the IPO The Indocoal assets 100% 90% 100% 100% 99% 95% Indominco Trubaindo Kitadin Barasentosa Bharinto Jorong PT Indominco Mandiri (CCOW Gen.I) PT Truba Indo Coal Mining (CCOW Gen II) PT Kitadin (KP) PT Barasentosa (Non active) PT Bharinto Ekaama (CCOW Gen II) PT Jorong Barntama Greston (CCOW Gen II) Output 19 Mt Reserves 204 Mt Resources 1,000 Mt Output 07f: 10.5 Mt Reserves Reserves Reserves Reserves Reserves Reserves 82 Mt 61 Mt 17 Mt 33 Mt 29 Mt 15 Mt 287 Mt Resources KALIMANTAN Output 07f: 5 Mt 300 Mt Resources KALIMANTAN Output 07f: 0 Mt? 151 Mt Resources KALIMANTAN 39 Mt Resources SUMATRA First output Mt Resources KALIMANTAN Output 07f: 3.5 Mt 44 Mt Resources KALIMANTAN DIVESTED MAY 2007 Figures as at 31 st Mar

9 ITM profile Leading coal producer: third largest in Indonesia based on 2006 production (see graph) Strong markets: Strong demand from East Asian coal importing countries Competitive supply to new Asian markets (China, India ) Indonesian government policy 10GW coal-fired power by 2010 Own coal terminal: by 2008 shipments up to 18Mtpa Strong growth track-record: output growth 25% pa Potential for growth through acquisitions Indonesian coal producers: 2006 output Bumi Adaro ITM Kideco Berau PTBA ITM historical output 20 Mt 15 Mt 10 Mt 5 Mt Indominco Jorong 11 Mt 10 Mt cagr 25% 6.5 Kitadin Mt 18 Mt Trubaindo Mt Mt Source: AWR Lloyd Source: Banpu 9

10 ITM corporate governance CORPORATE GOVERNANCE STANDARDS RATIONALE: ACCOUNTABILITY Provides window to fair value of Indonesian coal assets Imposes professional discipline on ITM management to report on performance in transparent manner ITM management will be directly accountable to the market: strategy and allocation of capital must be justified (focus on NPV returns) Enhances local corporate citizenship Banpu s own reporting standards (e.g. JORC reserves standards, best practice investor relations, corporate governance ) JSX requirements Board of Commissioners (appointed/ dismissed by shareholders) Board of Directors (at least one non-exec) and corporate secretary Separate audit, risk management and nomination committees HR and organisation policy Finance, accounting and budgeting policy Information systems, reporting structure 10

11 3. Operational review Rawi Corsiri Chief Operating Officer 11

12 Estimated 2007 production 21m tonnes (excl. China) 100% basis Daning 3.2 mt (Banpu 12.5%) Hebi 1.4 mt (Banpu 40%) Thailand 2 mt Trubaindo 5 mt Jorong 3.5 mt Indominco-Bontang 10.5 mt Kitadin 12

13 Indo and Thai coal production review and outlook Maintain high stripping ratio due to favorable market price Indominco-Bontang CV kcal/kg 2Q SR 10.3:1 3Q :1 4Q :1 1Q :1 2Q07F 2.6 Seasonal fluctuation is anticipated Trubaindo CV kcal/kg 2Q 0.8 3Q 1.5 4Q Q Q07F 0.8 SR Production discontinued after mine suspension Kitadin-Embalut CV 5800 kcal/kg 2Q 0.4 SR 6.9 3Q Q Output will gradually rise in later periods Jorong CV 5300 kcal/kg 2Q 3Q 4Q SR Q Q07F 0.8 Under mine closure stage in this year LP-2 / CMMC CV kcal/kg 2Q 0.6 SR 4.7 3Q Q Q Q07F

14 China coal operations Progress: New washing plant has raised PCI output Safety system (ventilation, gas testing methods) has been upgraded Undergoing expansion to 2 mtpa Challenges: Strict management of seam gas compliance HZTM (Hebi Zhong Tai Mining) Henan Province, PRC CV kcal/kg (Banpu 40%) 1 Progress: 2 nd longwall has passed regulatory testing and government inspection Ventilation and degas systems have been installed Rail spur under construction Challenges: Tighter safety regulations imposed in Shanxi Daning Shanxi Province, PRC CV kcal/kg (Banpu 12.5%) 2 1. Flotation (washing) plant at HZTM 2. Rail spur construction at Daning 14

15 Power Thailand: BLCP 50% Banpu-owned 1,434MW coalfired IPP project in Map Ta Put Industrial Estate is now in full operation Unit 1 COD : 1 st October 2006 Unit 2 COD : 1 st February 2007 Equity income to Banpu : 1Q07 4Q06 Bt 1,277 m Bt 664 m 15

16 Power China EBITDA margin recovered after completing maintenance of heat pipeline Luannan Hebei Province, PRC Power 100MW; Steam 128tph (Banpu 100% ) 1Q06 4Q06 1Q07 Sales* (USD m) EBITDA (USD m) Utilization (Hours) Power tariff (RMB/kwh) Coal price** (RMB/t) , , , First phase upgrade project (hot water) completed; Second phase underway Zhengding Hebei Province, PRC Power 48MW; Steam 180tph (100%) 1Q06 4Q06 1Q , , , Second phase expansion completed; third phase (25MW) underway Zouping Shandong Province, PRC Power 100MW***; Steam 490tph (70%) 1Q06 4Q06 1Q , , , * Unaudited figures ** Including transportation *** Including Expansion 100% basis 16

17 4. Commercial review Rawi Corsiri Chief Operating Officer 17

18 Average Selling Prices (ASP) US$/Tonne BJI Weighted avg BJI* May 17, 2007 : $ Q02 2Q02 3Q02 Indominco 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07e Note: *Barlow Jonker Index (BJI) based on CV 6,700 kcal/kg GAD from Australia to Japan Source: Barlow Jonker ASP 1q07 : $36.17 / tonne ASP 2007e : c.$38 / tonne 18

19 Geographic distribution of customers Coal sales by value: Bt 5,750m in 1Q07 Japan 28% Taiwan 18% Other 4% Korea 5% India 7% China 15% Europe 4% Indonesia 3% Thai 17% Philippines 6% Focus on quality of sales North & East Asia increasingly core with Chinese growth direct to end users Keeping Thai customers replacing Thai production by Indonesian Impact of LT sales to IPPs in Indonesia, China and Philippines lessens downsides 19

20 Coal sales by source and destination Mt % Coal sales volume: 4.32 MT in 1Q07 Thai mines Jorong Kitadin Indominco-Bontang Trubaindo 16% 16% 13% 10% 6% 5% 4% 3% 3% Focus on quality of sales Thai market share maintained through replacement of domestic with imported Indonesian coal Jorong remains supplier to nearby markets with increased Thailand, Indonesia and Philippines share with less to India Indominco-Bontang becoming attractive to new customers who previously bought lower grade coals (e.g. China) - Japan Thailand Taiwan China Philippines Others Indonesia Korea Europe India Trubaindo is positioned in premium markets and as an upgrading blend additive 20

21 Indicative 2007 coal sales Approx. 21 MT Uncontracted Contracted & Unpriced 4% 9% 87% Fully sold on Thai and most Indonesian low CV grades No rush to commit remaining high CV grades, more positive market expected Contracted & Priced Chinese import demand is expected to continue strong from end last year 21

22 5. Financial review Somruedee Somphong Chief Financial Officer 22

23 Sales revenues : coal and power Units: Bt. million 7,512 7,170 8,418 10,141 (1,551) (658) (284) (968) (1) (15) 6,667-11% Y on Y -34% Q on Q Sales volume declined 0.9mt due to a 10-day suspension at Bontang Port Sales volume lowered by 0.5mt 1Q06 2Q06 3Q06 Indominco Kitadin Jorong Trubaindo Coal Thai 4Q06 BPIC 1Q07 Note : Revenues from other businesses (e.g. industrial minerals) are not included 23

24 Avg. gross margin 1Q07 at 38% Bt. million GPM Sales revenue Indominco 40% 39% 40% 3,353 4,225 4,904 Trubaindo Trubaindo 39% 42% 33% 1,439 1,561 2,529 Jorong 35% 35% 34% Kitadin-Embalut Kitadin-Embalut 36% 12% % 189 Thai mines Thai mines 13% % Q07 4Q06 1Q06 24

25 Consolidated EBITDA Units: Bt. million 1,818 3,187 (1,358) (1) +4 COD of BLCP Unit 2 in February 3, % Y on Y Royalty decreased with revenues Sales volume declined 34% QoQ SG&A declined with sales 1Q06 4Q06 Gross profit SG&A Royalty Equity Other incomes incomes D&A 1Q07 25

26 Net profit variance Units: Bt. million 746 1, (174) +8 1,194 +4% Q on Q +60% Y on Y FX loss due to strengthening of Thai Baht 1Q06 4Q06 EBIT Financial charges Tax Nonrecurring FX Others 1Q07 26

27 Medium term ( ) CAPEX plans: $469million Units: USD million Coal Indonesia Coal China 120 Power Thailand & neighbor 50 Power China Status Coal projects Committed Pre-feasibility Conceptual Bontang Port 66 Bharinto 45 Indonesia 50 China 120 Power projects BLCP 93 China Power 30 China 60 Hongsa 5 The capital expenditure figures shown above are indicative only and do not include estimates for maintenance or sustaining capital expenditure. The figures shown in the Conceptual column should be treated with extra caution and are likely to change as new projects are conceived, some are cancelled and as pre-feasibility analyses generate modified estimates of capital expenditure requirements. 27

28 Balance sheet Net D/E (Times) Net gearing (%) Debt structure Fixed 56% Floating 44% % 25% 34% 38% 41% 42% Q06 2Q06 3Q06 4Q06 1Q07 91 As end of March

29 Question & Answer 29

30 APPENDICES 30

31 Operating profit Units: Bt. million 1Q07 4Q06 1Q06 QoQ % YoY % Total sales revenues* Sales revenues Coal 5,786 9,231 7,323-37% -21% Sales revenues Power (BPIC) % 254% Cost of sales (4,220) (6,324) (4,809) - - Gross profit 2,480 3,838 2,773-35% -11% GPM 37% Note: * Including other business 6,700 10,162 7,582-34% -12% Gross profit - Coal 2,220 3,563 2,716-38% -18% Gross profit Power (BPIC) % 357% GPM - Coal 38% GPM Power (BPIC) 28% 38% 39% 29% 37% 37% 22% 31

32 Operating profit Units: Bt. million 1Q07 4Q06 1Q06 QoQ % YoY % Gross profit 2,480 3,838 2,773-35% -11% GPM 37% 38% 37% SG&A (826) (1,326) (989) Royalty (671) (1,008) (781) Income from associates 1, Dividend income Coal & Power Other income EBIT 2,321 2,316 1,124 0% 106% EBIT - Coal 799 1,419 1,080-44% -26% EBIT - Power 1, % 3,359% EBITDA 3,195 3,187 1,818 0% 76% 32

33 Net profit Units: Bt. million 1Q07 4Q06 1Q06 QoQ % YoY % EBIT Interest expenses 2,321 (273) 2,316 (266) 1,124 (230) 0% 106% Financial expenses (46) (57) (53) Income tax (core business) (263) (546) (300) Minorities (22) (30) (33) Net profit before extra items 1,716 1, % 238% Non-recurring items* (149) (311) 169 Income tax (non-core business) (237) - - Net profit before FX 1,330 1, % 97% FX translations (137) Net profit 1,194 1, % 60% EPS (Bt/share) Note: * Income from non-core assets and other non-operating expenses 33