1Q10 results and comments

Transcription

1 1Q10 results and comments INVESTOR & ANALYST UPDATE 4 June

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: Bontang Coal Terminal 3. Operational review 4. Commercial review 5. Financial review 3

4 1. Introduction Virach Makaranithiroj Head of Investor Relations 4

5 Banpu in 1Q10: the figures Coal sales 6.16 Mt Unit: Bt. million Down 1.0 Mt Coal Power Total Q-Q 14% Q-Q Y-Y Revenue Equity income 13,828 1,045 1, ,251 2,042 12% -1% -12% 190% EBIT Net income 3,452 1,452 1,463 1,265 4,915 2,717-25% -43% 57% 66% 5

6 First step into Australia Banpu has acquired 14.9% stake in Centennial for c.a$280m at average price A$4.8 per share Banpu s first strategic step into the Australian coal sector: objective to go up learning curve (similar to first steps in Indo in 1990s and China ) Discussion has already taken place between the CEOs Banpu will explore the potential for co-operation at different levels Largest independent coalmining company in Australia (16Mt in 2009) 9 mines in New South Wales: mainly underground (longwall) Reserves 420 Mt, Resources 2,351 Mt Sells over two-thirds of output domestically (contracts up for renewal over next few years) Nearly one-third sales to export market CEO: Robert Cameron (founder, 1989) Centennial Ebitda in 2009:A$220M 6

7 2. Focus: Bontang Coal Terminal Philip Gasteen Head of Marketing & Logistics 7

8 BoCT expansion in summary Expansion and upgrades Ship-loading capacity from 11.0 to 20 Mtpa* Truck in-loading capacity from 1,500 to 2,000 tph Barge unloading capacity from 2 to 12 Mtpa Port stockyard capacity from 0.35 to 0.65 Mt Barge loading capacity from 0 to 2 Mtpa Benefits Reduce logistics costs (e.g. bringing Trubaindo coal through Bontang, reduction of rehandling and fine coal losses, faster loading rates ) Enable blending upgrades (improving pricing margins) Reduce dependence on third-party ports (synergies) Target domestic and niche markets * Currently 18.5Mtpa, will be 20Mtpa by end

9 ITM owns the second largest coal terminal in Kalimantan East Kalimantan Tj. Bara Ship-loading capacity Max vessel size 180,000 DWT 95,000 DWT Distance to Japan 2,504 nautical miles Central Kalimantan BCT N.Pulau Laut 15 BoCT (ITM) 60,000 DWT Note: ITM has significant economic advantage in using BoCT over third party ports for its coal exports NSW to Japan 4,324 nautical miles South Kalimantan ,000 DWT IBT 10 80,000 DWT CAPACITY FIGURES FOR OTHER TERMINALS ARE INDICATIVE ESTIMATES ONLY : PLEASE REFER TO COMPANY DATA 9

10 BoCT development timeline Year Shiploading capacity (Mtpa) BoCT Expansion & Upgrade Programme Feb 07 Stage 1 Jun 08 6 new stockpiles Skyline stack conveyor Reclaim system + 4 new feeders Truck dump pad Alternative road Jul 07 Jan 09 Stage 2A Conveyor from barge unloader to stockpile/ship Surge bin Jan 08 Oct 09 - Jan 10 Stage 2B Barge Loader Shiploading: surge barge + conveyor Shiploading: no surge barge New pulley for conveyor system Jun 07 Stage 2C Feb 10 Mar 10 Continuous Barge Unloader Sep 10 Stage 3 New stockpiles Tunnel feeders

11 BoCT expansion budget vs actual (Stage 1 and 2) BOD budget 2006 Actual Stage 1 $27M* Stage 1 $26M * Inclusive of VAT (or $67M pre-vat) $73M* $101M Stage 2 $46M* Stage 2 $75M Higher actual expenditure due to: Additions and changes to scope (e.g. alternative road, shiploading tph increase, new pulley for conveyor system, other capacity increases ) Raw materials (e.g. steel prices) and other cost increases 11

12 Stage 3 to be completed by Q Expansion and upgrades Dumping station New stockpile 62b with30, ton capacity New stockpile 62a with 50,000 ton capacity New tower conveyor system to stack coal 2 new reclaimer systems with 2,000 tph capacity to connect existing reclaim belts Reclaim using chain feeder Benefits Support high volume of inland coal from IMM Increase product diversification Decrease turnover rate of stock pile Solve bottleneck problem 12

13 BoCT Expansion & Upgrade Program Stage 1 Port Stockyard Belt pulling preparation Stockpiles Dump bin 2 Dump bin 1 Barge Island Area 150Kt Ship 170Kt 300Kt Expansion Stage Stage 1 New stockpile 300 Kt New stockpile, skyline tripper, reclaim conveyor Overhead conveyor Transfer conveyor 13

14 BoCT Expansion & Upgrade Program Stage 2 Port Stockyard Barge Crane Unloader 2007 Continuous Barge Unloader 2010 Floating Terminal Station* 2009 Dump bin 2 Dump bin 1 Barge Island Area 150Kt Increased capacity CBU FTS Ship 170Kt 300Kt Barge Loader Upgrade to 3,700 tph 2009 Expansion Stage Stage 1 Stage 2 Barge Loader 2009 * Completed 2009 but not officially part of BoCT Expansion & Upgrade Programme 14

15 BoCT Expansion & Upgrade Program Stage 3 Port Stockyard New Stockpiles and Truck Dump 30 Kt Dump bin 3 Dump bin 2 Dump bin 1 Barge Island Area CBU 50 Kt FTS Barge Loader Expansion Stage Stage 1 Stage 2 Tunnel Feeders Stage 3 15

16 3. Operational review Somyot Ruchirawat Head of Indonesian Coal 16

17 3. Operational review i) Coal business 17

18 Indonesian coal operations in 1Q10 ITM OPERATIONS & PROJECTS (2010 saleable output targets) East Kalimantan INDOMINCO 13.2 Mt Bontang Coal Terminal Coal output : 1Q10 : 6.0 Mt 2010e : 23 Mt Central Kalimantan Bunyut Port TRUBAINDO 6 Mt Samarinda Palangkaraya BHARINTO 0.2 Mt (Commissioning at end 2010) South Kalimantan Balikpapan Captive Coalfired power project KITADIN- EMBALUT 1.6 Mt Project update: BoCT Expansion: CBU is fully commissioned; implementing Stage 3 expansion Bontang Power Plant: Commissioning is expected by mid 2010 POWER COAL Operation Project Operation Project Banjarmasin JORONG Indominco Underground: Preparing to 2 Mt seek operation approval from government Jorong Port Bharinto: Procuring materials for crushing plant and building construction 18

19 Indonesian quarterly output and SR analysis STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) WBlock E Block 2Q09 3Q09 4Q09 1Q10 2Q09 3Q09 4Q09 1Q10 2Q09 3Q09 4Q09 1Q10 3Q09 4Q09 1Q10 COAL OUTPUT (Mt) COAL OUTPUT (Mt) COAL OUTPUT (Mt) 4.1Mt 3.7Mt 3.3Mt 3.4Mt Mt Mt 1.4Mt 1.3Mt 1.3Mt 1.3Mt COAL OUTPUT (Mt) 0.8Mt 0.7Mt 0.8Mt 0.4Mt 0.3Mt 0.4Mt 0.4Mt 0.4Mt 2Q09 3Q09 4Q09 1Q10 2Q10e Indominco-Bontang CV: kcal/kg W Block production slightly higher than plan 2Q09 3Q09 4Q09 1Q10 2Q10e 2Q09 3Q09 4Q09 1Q10 3Q09 4Q09 1Q10 2Q10e Trubaindo Jorong Kitadin - Embalut CV: kcal/kg Washing plant was completed and under commissioning CV: 5300 kcal/kg Expect lower production in 2010 CV: 5750 kcal/kg Smooth production from good mine planning East block West block Note: output figures are saleable coal 19

20 China coal operations in 1Q10 BANPU CHINA 2010 COAL PRODUCTION TARGETS* PRICE vs. COST PRICE vs. COST (RMB/ t) (RMB/ t) AVERAGE COAL 622 PRICE AVERAGE COAL PRICE Gaohe (45%), Shanxi 6 Mt BEIJING Q09 4Q09 1Q10 COAL OUTPUT (Mt ROM) PRODUCTION COST Q09 4Q09 1Q10 COAL OUTPUT (Mt ROM) PRODUCTION COST Daning (56%), Shanxi 4 Mt 1.16Mt 0.98Mt 0.88Mt 1.33Mt 0.36Mt 0.32Mt 0.34Mt 0.34Mt Hebi (40%), Henan 1.5 Mt 1Q09 4Q09 1Q10 2Q10e Daning 1Q09 4Q09 1Q10 2Q10e Hebi Zhong Tai Mining POWER COAL Operation Project Operation Project * ROM production CV: Kcal/kg Banpu 56% The railroad commenced operation and SAADEC began coal sales on the railroad in March 2010 CV: Kcal/kg Banpu 40% High average coal price in 1Q10 due to higher percentage of PCI coal sales 20

21 3. Operational review ii) Power business 21

22 Power Thailand : BLCP Units: Bt. Million (100% basis) 1Q09 4Q09 Total revenue 5,445 3,214 Availability Payment (AP) Energy Payment (EP) Dispatch (%) Operating cost EBIT 1Q10 Q-Q Y-Y 5,022 56% -8% 2,975 1,538 2,482 61% -17% 2,322 1,424 2,312 62% 0% 94% 94% 97% 2,475 2,079 2,523 21% 2% 2, EBITDA 2,970 1,135 Equity income 1Q10 Bt 997 m* 2, % -20% 2, % -16% * Based on Banpu s 50% interest; including FX gain Bt172million 22

23 Power China : BPIC in 1Q10 Sales* (USD m) EBITDA (USD m) Utilization (Hours) Power tariff (RMB/kwh) Coal price** (RMB/t) Higher sales from both power and steam helped offset the higher coal price and raised EBITDA earning Luannan Hebei Province, PRC Power 100MW; Steam 128tph (Banpu 100% ) 1Q , Q , Q , Higher sales from both power and steam helped offset the higher coal price and raised EBITDA earning Zhengding Hebei Province, PRC Power 48MW; Steam 180tph (100%) 1Q , Q , Q , EBITDA earning was dropped due to much higher h coal price whilst lower revenue caused by plant maintenance Zouping Shandong Province, PRC Power 100MW; Steam 430tph 1Q , Q , (70%) 1Q , * Unaudited figures ** Including transportation (100% basis) 23

24 4. Commercial review Philip Gasteen Head of Marketing & Logistics 24

25 Banpu average selling prices in 1Q10 Banpu ASP Coal vs oil price relativity USD per tonne Quarterly BJI Monthly BJI Monthly ASP Rebased to WTI spot price API#4 FOB Richards Bay FOB Newcastle As at May 28th Quarterly ASP $96.8 (+88%) $92.9 (+88%) $64.8 (+15%) Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 BJI* May 27, 2010 ASP 1Q10 $66.3/t (+2% QoQ) $ Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 25

26 Thermal coal market analysis 2Q 2010 update ATLANTIC Exceptionally depressed, gas prices rising USA Thermal supply remains very low RUSSIA Minor recovery of weakened Ruble CHINA Faster import pace expected EAST ASIA Japan still down, but steel mills strong; Korea &Taiwan strong recovery REST OF ASIA Continued growth COLOMBIA Diverts coal to Asia, +/- 7mt already sold INDONESIA More rain early 2Q SOUTH AFRICA Continuing problems with rail INDIA High demand to ease as monsoon comes Jun-Sep AUSTRALIA Availability increasingly tight = Demand = Demand/Supply = Supply 26

27 Indicative 2010 coal sales Coal Coal sales sales contract contract and and pricing pricing status status Comment Contract Status Price Status Of 2H tonnes, about 50% without fixed prices. 94% Contracted 72% Fixed Index linked sales is higher than in previous years. Of 2H tonnes, 32%. Due to introduction of East Block and return of Kitadin Embalut, proportion of lower CV for 2010 rises 6% 6% Cannot compare meaningfully % Unpriced 2% ASP with 2010 ASP, as composition Uncontracted Index changed. Price under negotiation TARGET SALES 2010: c.23 Mt 27

28 Coal sales by geographic destination (ITM and Thai) Coal sales 1Q10 (total 6.16Mt) ITALY 2010 CHINA 2010 HONG KONG 2010 S.KOREA 0.1Mt 2.6Mt 1.3 Mt 0.6Mt 1.5Mt 0.4Mt 0.1Mt 0.3Mt 1.0Mt 3M 09 6M 09 9M M Mt 0.4Mt 0.5Mt 0.5Mt 0.3Mt JAPAN Mt 3.2Mt 2.1Mt 1.4Mt 1.1Mt 1.4Mt 3M 09 6M 09 9M M 09 3M 09 6M 09 9M M Mt 0.5Mt 0.3Mt 0.5Mt 3M 09 6M 09 9M M 10 OTHERS* 0.9Mt INDIA 1.7Mt 1.4Mt 2.2Mt Mt 3M 09 6M 09 9M M 10 TAIWAN 2.6Mt 1.7Mt Mt 0.6Mt 0.2Mt 0.4Mt 3M 09 6M 09 9M M 10 THAILAND 2010 INDONESIA 2010 PHILIPPINES Mt 0.5Mt 0.3Mt 3M 09 6M 09 9M M 10 3M 09 6M 09 9M M 10 *Includes small, nonregular purchasers 1.0Mt 0.3Mt 1.5Mt 2.1Mt 0.5Mt 1.3Mt 1.0Mt 0.6Mt 0.3Mt 0.1Mt 1.8Mt 1.4Mt 0.9Mt 0.6Mt 0.4Mt Mid-to-High CV Low-to-Mid CV 2010 trend expectation 3M 09 6M 09 9M M 10 3M 09 6M 09 9M M 10 3M 09 6M 09 9M M 10 28

29 China thermal coal market review RMB Comment 1,200 1, End Mar 31 May Datong super mixed coal (RMB) (RMB) (6,000 kcal/kg) Datong Shanxi super mixed coal 1,025 Shanxi (5,500 kcal/kg) Common Common mixed coal (4,000 kcal/kg) One-month maintenance of Datong- Qinhuangdao Railway since Apr. 1, suppressing domestic coal supply as the government launched a twomonth safety inspection on coal production of all coal mines, which would affect output of operational coalmines and postpone production of newly built coalmines Severe drought in southwest China increasing demand for thermal power, power plants will soon start their power coal reserve for the peak season in the summer 200 Decreasing supply and increasing demand d would push up coal prices 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q102Q10e Source: 31 May

30 5. Financial review Somruedee Somphong Chief Financial Officer 30

31 Sales revenues Units: Bt. million 17,428 (951) (510) (400) (245) +6 (23) (54) 15,251 13, % Y on Y Temporary suspension of Jorong mine -12% Q on Q Lower selling price by 6% QoQ Lower sale volume by 11% QoQQ 1Q09 4Q09 Indominco Trubaindo Jorong Kitadin -Embalut Coal Thailand Others BPIC 1Q10 31

32 Average gross margin for coal in 1Q10: 45% Bt 9,117 M Bt 8,166 M Coal sales (Bt millions) Bt 7,891 M Bt 4,506 M Bt 3,813 M Bt 3,996 M 55% 41% 42% Gross margin (%) 60% 54% 51% Bt 1,091 M Bt 605 M Bt 691 M Bt 977 M Bt 733 M 35% 36% 38% 47% 49% Bt 35 M Bt 21 M Bt 27M -28% 7% 3% 1Q09 4Q09 1Q10 1Q09 4Q09 1Q10 1Q09 4Q09 1Q10 4Q09 1Q10 1Q09 4Q09 1Q10 Indominco Trubaindo Jorong Kitadin Thai mines 32

33 Consolidated EBITDA Units: Bt. million 7, (123) +1,087 5,405 3,686, (855) (27) +47% QonQ Q -24% Y on Y Power Bt1,562m +229% Q on Q +7% Y on Y Coal sales revenue decreased d 13% QoQQ Higher equity income from China Coal Higher equity income from BLCP Dividend from Ratch Coal Bt3,843m +20% Q on Q -32% Y on Y 1Q09 4Q09 Gross SG&A Royalty Equity Other Other D&A profit Income Income expenses coal China Coal EBITDA Power 1Q10 33

34 Consolidated net profit Units: Bt. million 4,798 1, (913) (276) +1,041 2, % QonQ Q -43% Y on Y Loss from financial derivatives, mainly coal swaps Strengthening of THB against USD Higher equity income from BLCP Dividend from Ratch Power Bt1,265m +464% Q on Q +11% Y on Y Coal Bt1,452m +2% Q on Q -60% Y on Y 1Q09 4Q09 EBIT Financial Tax Minority Non- FX Net Profit charges recurring Power 1Q10 34

35 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 Hongsa project of approx. $400 M Tandung Others Mayang $ 8 M $14 M Embalut $ 11 M Trubaindo UG $ 11 M Bharinto $ 38 M Indominco UG $ 11 M EBlock Conveyor $ 96 M INDONESIA: $189 M The capital expenditure figures shown above do not include estimates for maintenance or sustaining capital expenditure. 35

36 Balance sheet Net D/E (Times) Net gearing (%) Debt structure 0.66 Fixed 36% % 40% % % % % Floating 64% Q10 As end of March 2010 * Net gearing = ND / (ND+E) 91 36

37 Dividend payments Dividend per share (Bt) 8 5 (Special) (2H09) (1H09)

38 Questions & Answers 38

39 APPENDICES 39

40 Operating profit Units: Bt. million 1Q10 4Q09 1Q09 QoQ% YoY% Total sales revenues* 15,251 17,428 13,624-12% 12% Sales revenues Coal 13,613 15,713 12,344-13% 10% Sales revenues Power (BPIC) 1,423 1,477 1,269-4% 12% Cost of sales (8,759) (10,051) (6,451) Gross profit* 6,492 7,376 7,173-12% -9% Gross profit - Coal 6,125 6,979 6,835-12% -10% Gross profit Power (BPIC) % 3% GPM 43% 42% 53% GPM - Coal 45% 44% 55% GPM Power (BPIC) 24% 25% 26% Note: * Including other business 40

41 Operating profit Units: Bt. million 1Q10 4Q09 1Q09 QoQ% YoY% Gross profit 6,492 7,376 7,173-12% -9% GPM 43% 42% 53% SG&A (1,515) (1,820) (1,148) Royalty (1,647) (1,881) (1,548) Income from associates 2, ,057 Dividend id d income Coal & Power Other income Other expenses - Operations (778) (1,355) (300) EBIT 4,915 3,121 6,558 57% -25% EBIT - Coal 3,452 2,697 5,207 28% -34% EBIT - Power 1, , % 8% EBITDA 5,405 3,686 7,080 47% -24% EBITDA - Coal 3,843 3,211 5,623 20% -32% EBITDA - Power 1, , % 7% 41

42 Net profit Units: Bt. million 1Q10 4Q09 1Q09 QoQ% YoY% EBIT Interest expenses 4,915 (272) 3,121 (289) 6,558 (348) 57% -25% Financial expenses (52) (55) (31) Income tax (core business) (864) (927) (1,591) Minorities (527) (914) (937) Net profit before extra items 3, , % -12% Non-recurring items* (117) Net profit before FX 3,083 1,731 4, % -30% FX translations (366) (90) 387 Net profit 2,717 1,641 4,798 66% -43% EPS (Bt/share) Note: * Income from non-core assets and other non-operating expenses 42

43 Banpu s Resources & Reserves statement (100% basis) Mine operation Interest and (%) project As at 31 March 2010 As at 31 December 2009 Measured Indicated Total Proved Probable Total Total Total Resources Resources Resources Reserves Reserves Reserves Resources Reserves Mine operation Jorong Indominco Kitadin Trubaindo Lampang Payao Daning Hebi* Project Bharinto Gaohe Total 1, , , Note: figures have been estimated in accordance to JORC Code unless otherwise stated * Figures have been estimated in accordance to Chinese reporting standard 43

44 Coal reserves by operation and project (100% basis) Unit: Mt CHINA Resources: 627 Reserves: 310 Daning Hebi Proved reserves Probable reserves Resources (Measured & Indicated) d) Gaohe THAILAND Resources: 1 Lampang Payao Indominco INDONESIA Resources: 1,644 Reserves: 289 Trubaindo Jorong Kitadin Bharinto As at 31 March

45 Banpu Coal Resources & Reserves Statement INDICATED 575 Mt 381 Mt 100% basis As at 31 March 2010 Equity tonnage Notes: Reporting generally in accordance with JORC Code plus some internal estimates. Major changes audited by independent experts. * Only Measured and Indicated Coal Resources MEASURED 1,698 Mt 1,130 Mt 164 Mt 196 Mt PROBABLE 281 Mt PROVED 318 Mt RESOURCES* 2,273 Mt (100% basis) RESERVES 599 Mt (100% basis) 45

46 Coal reserves by operation and project (equity basis) Unit: Mt CHINA Resources: 300 Reserves: 149 Daning Hebi Proved reserves Probable reserves Resources (Measured & Indicated) d) Gaohe THAILAND Lampang Payao Indominco INDONESIA Resources: 1,210 Reserves: 212 Trubaindo Jorong Kitadin Bharinto As at 31 March