Investor update. 3 March Rawi Corsiri Somruedee Somphong

Transcription

1 Investor update 3 March 2003 Rawi Corsiri Somruedee Somphong COO CFO

2 Agenda 1 Quarterly overview 2 Results highlight 3 Industry outlook 4 Business scenario 2

3 Quarterly overview Corporate rating upgraded to A by TRIS Awarded the best corporate governance by the Assets Coal Business - Secured insurance of US$91m on investment in Indonesia in Oct 02 - Coal Reserves & Resources re-assessment by the UK registered mining consultant in Jan 03 - Holding of Indominco increased to 100% in Feb

4 Quarterly overview Power Business - TECO s first dividend payment of Bt188m in Dec 02 - One gas-fired unit temporary shut-down due to the damage in compressor blades - RATCH s 2002 net profit reported at Bt4.7b Finance - ECD redemption of US$0.65m in Jan 03 - Bt1.6b capital increase from 46% warrant conversion in Jan 03 - Refinanced Indominco s CD and long-term loan of US$80m in Feb 03 - Bt3b amortizing debenture launched at 2.95% in Feb 03 - TRIS assigned A rating for the debenture in Feb

5 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 4% 1,815 2,214 1, , ,038 1,188 1,153 Oct-Dec, 01 Jan-Mar, 02 Apr-Jun, 02 Jul-Sep, 02 Oct-Dec, 02 Tonnage sales in 4Q increased by 4% driven by strong increase of International sales of Indocoal Sales to Thai market declined q-q, however, inlined with expectation. Note that Thai market sales in 3Q02 were extraordinary Source: Banpu (Indocoal consolidation started in Mar02) 5

6 Sales revenue 3,500 3,000 2,500 International sales - Indocoal International sales - Jorong Thai market sales 5% Overall sale revenues increased 5% mainly from Indocoal s international sales Unit in '000 Baht 2,000 1,500 1, , , ,015 1, With higher competitive price to domestic coal, demand for the high quality coal in Thai market overwhelmed the demand for domestic coal 0 Oct-Dec,01 Jan-Mar,02 Apr-Jun,02 Jul-Sep,02 Oct-Dec,02 Source: Banpu (Indocoal consolidation started in Mar02) 6

7 Market position - Thailand 4Q Others 23% Banpu 48% Others 23% Banpu 45% ITD 9% ITD 7% Siam Cement 6% G Prem Jee 3% Lanna 11% Siam Cement 6% G Prem Jee 7% Lanna 12% Banpu s sales in Thailand achieved 48% market share YTD, Banpu shared 45% of the homeland market Source: Banpu Note: Total domestic coal consumptions in Thailand estimated at 11mt 7

8 Coal reserves & Production capacity Site / area Saleable tonnes*, million, as at 31 December Location BANPU s Proved Probable Total Measured Indicated Total Production by coal type holding Reserves Reserves Reserves Resources Resources Resources Capacity BITUMINUS JORONG Indonesia 95% INDOMINCO Indonesia 65% KITADIN 1 Indonesia 100% TRUBAINDO 2 Indonesia 90% MAMPUN PANDAN 2 Indonesia 95% LIGNITE LAMPANG LP 2 Thailand 100% CHIANG MUAN Thailand 94% LAMPHUN Thailand 100% BARASENTOSA 2 Indonesia 86% Total Note : 1. Of Kitadin's totals, 1.2 m tons of reserve and 1.1 m tons of resource are attributed to the underground mining operations 2. Prospective sites 8

9 Agenda 1 2 Quarterly overview Results highlight 3 Industry outlook 4 Business scenario 9

10 Quarterly results Year-end Dec (Btm) 4 Q0 2 3 Q0 2 Sales 3,167 3,048 Gross profit SG&A (403) (373) Royalty (257) (249) Equity income - Power Other income EBIT Interest expense (131) (168) Income tax Minorities 5 11 Net profit before extra items Non-recurring items ECD redemption premiums - (19) Mine property expenses (54) (47) Net profit before FX Net profit Sales revenues increased slightly in 4Q02 since the delivery prices were concluded at 3Q02 prices Therefore, gross profit margin reported q-q lower at 21% in this quarter Other income in 4Q include service & management fee, dividend from associates and interest income 10

11 Annual results Jan-Dec (Btm) Sales 10,909 5,415 Gross profit 2,823 1,369 SG&A (1,410) (983) Royalty (869) (230) Equity income - Power Dividend income - Power Other income EBIT 1, Interest expense (659) (491) Income tax (44) (77) Minorities (50) (31) Net profit before extra items Non-recurring items ECD redemption premiums (337) (197) Mine property expenses (79) - Net profit before FX Net profit 1, Sales revenue in 2002 substantially increase mainly from incremental volume sales of Indonesian coal 2002 gross profit margin reported at 26% -- slightly better than the previous year of 25% Solid improvement of EBIT driven by power business Also, a strong net profit (before extra items) of Bt736m 11

12 Operational breakdown Q02 3Q02 2Q02 1Q02 Tonnage sales ('000 tonnes) Thai market 4,736 1,153 1,356 1,188 1,038 - Domestic 3, Import 1, Jorong 1, Indocoal 6,326 2,214 1,815 1, Sales revenue (Btm) Thai market 3, , Domestic 1, Import 1, Jorong 1, Indocoal 5,943 1,956 1,643 1, GPM Thai market 22% 19% 25% 22% 23% - Domestic 37% 35% 33% 38% 42% - Import 12% 10% 20% 8% 6% Jorong 47% 40% 44% 54% 48% Indocoal 23% 18% 22% 27% 27% 12

13 Balance sheets Historical net D/E Oct-Dec, 01 Jan-Mar, 02 Apr-Jun, 02 Jul-Sep, 02 Oct-Dec, Unit in '000 Baht Oct-Dec, 01 Jan-Mar, 02 Apr-Jun, 02 Jul-Sep, 02 Oct-Dec, 02 Total assets 15,799 23,291 23,310 23,584 23,701 Total debts 8,988 15,246 14,399 15,135 14,850 Net debts 6,454 9,238 9,193 9,460 10,604 Shareholders' equity 6,811 8,045 8,911 8,449 8,

14 Agenda 1 Quarterly overview 2 Results highlight 3 4 Industry outlook Business scenario 14

15 Thermal coal Spot price Kcal/kg Current 4Q02 3Q02 2Q02 Australia Gladstone Newcastle China - Qinghuadao Indonesia Kalimantan Russia Pacific Source: International Coal Report (24 Feb 2003) 15

16 Thermal coal Price trend Steam coal price forecast Likely price movement in Q2002 1Q2003 2Q2003 2H2003 CIF ARA FOB RBCT FOB New castle With supplier discipline CIF ARA FOB RBCT FOB New castle Source: Steam coal forecaster, Q3/

17 Thermal coal Supply side Steam coal supply forecast in major country Poland Russia Canada US Colombia Venezuela South Africa China Indonesia Australia Total Source: Steam coal forecaster, Q3/

18 Thermal coal Demand side Steam coal trade forecast Europe Mediteranean Americas Asia TotalCoal trade Japan In 2003, 5 new coal-fired stations with total capacity of 3,300 MW adding 8-10 mt at full capacity Taiwan Incremental demand in 2003 to be contributed by a 1,300 MW IPP will add 2mt in Likewise, a small increase of 1mt in Korea Coal import growth had been slowed with slightly over 2mt y-y increase due to increased nuclear generation and in the adoption of gas as a fuel for power. China Coal imports into China in Jan-Oct 02 increased to 8mt from less than 2mt during the same period last year. Source: Steam coal forecaster, Q3/

19 Additional demand from Asian coal fired IPPs Project Country Capacity Scheduled BLCP Power Thailand 2 x , 2007 Janamanjang Malaysia 3 x Jimah Power Malaysia 2 x , 2008 SKS Tanjung Bin Malaysia 2 x , 2008 North Chennai Stage II India 2 x Tuticorin India 1 x Mindanao Philippines 2 x Malaysia Incremental demand to be contributed by 4 units coal-fired IPPs adding around 6-8mt during India Expansion of three coal-fired IPPs in India required around 4-5mt in 2005 Source: Asian coal forecast 2003 conference 19

20 Coal demand & supply in Thailand (million tonnes) E Consumption EGAT Industrial sector Production EGAT Private producer Imported EGAT Industrial sector Source : EPPO ( Energy Policy and Planning Office), Banpu 20

21 Japan coal tax Japan s import tariff on coal will be introduced and tax rates on LPG, and LNG are to be lifted. Beginning in Oct-03, coal imported tariff will be applied at 230 Yen/ton, and will increase to 460 Yen/ton from Apr-05 and 700 Yen/ton from Apr07, respectively. However, coal for production of iron / steel, and cement are indemnified from the tax as well as coal consumed in Okinawa Perfecture power generation. Coal will remain the most competitive fuel. Implication is positive giving anticipated stock building ahead of Oct-03 The coal tax would have no material impact on Japanese thermal coal demand growth in the medium term, said Xstrata chief Mike Davis 21

22 Thai Power Industry MW 30,000 28,000 26,000 24,000 22,000 20,000 18,000 16,000 14,000 12,000 10,000 Jan 02 Feb 02 Power demand & dependable supply during Jan 02 Feb 03 Mar 02 Apr 02 May 02 Jun 02 Jul 02 Aug 02 Sep 02 Oct 02 Nov 02 Dec 02 Dependable Supply Demand Jan 03 Feb03 Source:- System Control and Operation Division, EGAT, Economic Policy Division, EGAT 22

23 Summary of Thai power industry development Power demand in terms of energy (Kwh) in 2H02 grew at 7% with expected continued growth of 8% in Jan 03 In terms of MW, EGAT anticipated an average 6 % growth in As a result, peak demand estimated to grow from16,681 MW to 17,700 MW in this year According to the latest PDP (2003 Power Development Plan proposed by EGAT) that power demand forecast to grow at 6% p.a. in the next 10 years, additional demand is required at 1,500MW p.a. Under the country s ESI (Electric Supply Industry) scheme, EGAT has proposed the partial liberalization structure. However, the government s decision on the new ESI is remained to be seen In our view, the partial liberalized ESI will create certain advantages for existing players 23

24 Forecast electricity demand vs supply MW 37,500 Low Reserve Margin ,000 32,500 30,000 27,500 25,000 22,500 20,000 17,500 15, % Reserve Margin Peak Demand Dependable Supply Banpu Forecast Supply Assumptions of Banpu s supply base case: On-course BLCP, 2-yr delay of Bor Nok, 3-yr delay of Hin Krut, No EGAT s retire or repower, Nam Thuen II in

25 Agenda 1 Quarterly overview 2 Results highlight 3 Industry outlook 4 Business scenario 25

26 Breakdown of coal sales in ,000 Sales growth from 14mt to 15mt 15,000 Others 10,000 5,000 Domestic mines Indonesia mines E 26

27 Target sales from Indonesian mines 2003 Target from Indonesian mines 11.5mt Europe 7% Others 14% Japan 30% Korea 10% Indonesia 10% Thailand 14% Taiwan 15% 27

28 Coal sources in Thailand market 2003 Target of Thailand Market 4.6mt Import from Others 6 % Import from I ndonesian mi LP-2 43% nes 35% BP-1 6% CMMC 10% 28

29 Summary of power business TECO Rescheduled routine maintenance of one gas turbine generator two months earlier in 1Q03. TECO s full operations back to normal beginning 1 Mar 03 RATCH Dividend payment from RATCH of Bt326m in Apr 03 BLCP Project financing aimed to completed by Jul

30 BANPU s MOU with RATCH Purpose to become the strategic alliances in the power generation business Under the MOU, BANPU s power projects (in which Banpu invested through the holding companies) including 37.5% holding of Tri-Energy (700MW combined cycle), and part of BLCP (1,347MW thermal) to be purchased and transferred to RATCH Details transaction on share pricing method of payment pending to be clarified at completion of due diligence The success of transaction remains uncertain Key conditions to finalize by end of Apr 03 and transaction expected to completed by end of Jun

31 Planned capex (US$m) Jorong Indocoal Power Total

32 Q & A 32

33 Appendices Debt portfolio Summary of Indocoal financials Summary of TECO s financials Coal benchmark price movement 33

34 Debt portfolio: as at 31 December 2002 Debentures BANPU ECD #2 BANPU #4 BANPU #5 BANPU #6 O/S amount US$3.1m Bt750m Bt2,250m Bt500m Maturity date Apr-03 Nov-04 Apr-06 Apr-08 Interest rate 2.75% MLR-0.25% 5.80% MLR-0.375% "A" "A" Rating - - (TRIS) (TRIS) Bank loans BANPU Indocoal Long-term Btm 3,130 US$m 55.1 Short-term Btm 1,700 IDRm5,911 Note: On 4 Nov 02, Banpu redeemed Banpu#3 amounting of Btm 976 (incl. interest paid) On 4 Oct 02, banpu amortized Banpu#5 in an amount of Btm 323 (incl. interest paid) 34

35 Indocoal s financials Y/E Dec (Btm) Q02 3Q02 2Q02 1Q02 Revenues 6,523 2,097 1,874 1, Cost of sales (5,009) (1,688) (1,439) (1,420) (462) SG&A (503) (144) (203) (120) (37) Royalty (638) (206) (183) (193) (56) Interest expenses (231) (60) (68) (84) (20) Net operating profit (19) FX translation 696 (40) (149) Mining property (79) (54) (47) 57 (35) Minority interest Income tax (7) (88) - Reported net profit 752 (50) (177)

36 TECO s financials Y/E Dec (Btm) 4Q02 4Q01 YE 2002 YE 2001 Revenues 2,368 2,182 8,811 8,039 Cost of sales (1,759) (1,639) (6,572) (6,062) SG&A (43) (160) (147) (268) Swap cost (121) - (478) - Legal fee (113) (151) (1,006) Interest expenses (113) (151) (467) (1,006) Net operating profit , FX translation (258) Reported net profit ,

37 Benchmark price movement Source: Barlow Jonker 37 Oct-00 Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 US$ / ton Japanese Benchmark Price BJ FOB Spot Price