3Q 04 results and comment

Transcription

1 3Q 04 results and comment INVESTOR & ANALYST UPDATE 17 th November 2004

2 1. Summary 2. Focus: BLCP 3. Operational review 4. Commercial review 5. Financial review 2

3 1. Summary Somruedee Somphong Chief Financial Officer 3

4 Summary Net profit of Bt 1,193m in 3Q04 Gross margin 40%, up from 37% in 2Q04 Coal sales 4.1 million tonnes Average selling price US$26.3 per tonne (up 13% QoQ) 4

5 Progress to date Growth Indocoal acquisition (ph.1) Indocoal consolidation (ph.2) Indominco- Bontang acquisition +35% China Investment AACI, 18.8% China Bharinto AACI, Acquisition 99% Increased to 20.9% Further Regional growth H2004 3Q2004 COCO shares sold Port activity sold Restructuring Industrial Minerals sell-down TECO share sold to RATCH ATC Divestment 4% in 2003, 14% remaining stake Industrial Minerals sell-down MoU with EGAT called off RATCH/EGCO MoU with EGAT ATC re: sale/purchase Divestment 1.9% in 1H04, 12.1% remaining stake ATC Divestment 1.3% in 3Q04, 10.7% remaining stake 5

6 2. Focus: BLCP Rawi Corsiri Chief Operating Officer 6

7 BLCP now 17.5% completed Location: Map Taput Industrial Estate Capacity: 1,434 MW Fuel: Coal (approximately 3 Mtpa.) COD: Oct 06 and Feb 07 (c. 700MW each unit) Status (Nov 04): c.17.5% completion (procurement of construction materials secured) 7

8 BLCP has a strong financial structure PPA: Tariff structure: BOI: Project cost: D/E ratio: 25 years with EGAT AP covers fixed costs; EP covers variable (incl. fuel) costs Tax-free for first 8yrs after COD; 15% tax rate for 5yrs after that US$ 1.34 billion 3:1 8

9 BLCP is climbing up the value curve 90% 100% 75% Value? NOVEMBER % 25% NPV 7.5% ILLUSTRATIVE ONLY Source: Bank of America Developme nt approval Heads of agreement (major contracts) Project stage of development Financial Closure 20% completion NOVEMBER 2004 Technical completion COD 9

10 BLCP is the largest new IPP since ,903 MW 2,500 MW THAILAND NEW POWER PLANT COD 4x 700 MW 2,000 1,500 1, MW Lamtakong EGAT Independent 1,400 MW BLCP 700 MW Songkhla 385 MW Khanom 700 MW Gulf Power 700 MW N.Bangkok 700 MW S.Bangkok 700 MW Bangpakong cc no MW Nam Thuen 3x 700 MW 3x 700 MW 3x 700 MW 3x 700 MW 13 14,000 MWs? MW Lan Krabue 300 MW Krabi 108 MW SPP 80 MW SPP (700 MW) Ph.1 BLCP 700 MW Union Power No MW Union Power No Source: Ministry of Energy 10

11 There is potential for more coal-fired IPPs longer term Preparation and planning for new capacity starts now! 250 TWh planning & financing construction new power on-stream 5% 7% 5% other hydro lignite imported coal 200 BLCP kicks-in 150????? 35% 90 TWh??? 7% % 50 72% 47% natural gas Source: Ministry of Energy THAILAND POWER SUPPLY BY FUEL TYPE 11

12 More than 50% of power generation in Asia is coal-fired WORLD ASIA % % Coal-fired Coal-fired Hydro Gas-fired 30 Oil-fired Hydro Gas-fired 10 Nuclear Oil-fired 10 Nuclear 0 Other renewables Other renewables Source: IEEJ Asia Energy Outlook March

13 Thailand s reliance on coal-fired power is low MORE INDIGENOUS COAL RESOURCES LESS 100% 90% 80% 70% 60% 50% 40% 30% 20%? 10% 0% China India Indonesia Vietnam Thailand Philippines Malaysia Japan Korea Taiwan Other Renewables Gas Hydro Oil Source: IEEJ Asian/World energy outlook 2004 Nuclear Coal 13

14 BLCP : Aerial view CW intake Power plant Coal stock yard 14

15 BLCP : Aerial view Power plant Coal stock yard Coal unloading port 15

16 BLCP : Power plant Control room Turbine / Generator Stack Intake 16

17 BLCP : Power plant Control building Boiler structure 17

18 BLCP : Manufacturing work in Japan LP Rotor 18

19 3. Operational review Rawi Corsiri Chief Operating Officer 19

20 Banpu s total coal reserves are approx 156 Mt* * Total 156 mt excluding Daning and Bharinto Daning 21% x 56% x 79 Mt. Operation Project LP-2 9 Mt CMMC 2 Mt Bharinto Reserves 40 Mt. Trubaindo Reserves 52 Mt. Resources 21 Mt. Indominco-Bontang Reserves 34 Mt. Mampun Pandan 14 mt Barasentosa 25 mt Jorong Reserves 32 Mt. Resources 8 Mt. Kitadin-Embalut Reserves 28 Mt. Resources 72 Mt. 20

21 Trubaindo to bring additional 3 Mtpa production in 2005 Daning 4.0 mt Operational 2005 Production est LP mt CMMC 0.6 mt Production est. 2004, 2005 Note: tonnages shown are total gross production targets; they do not take into account Banpu s equity ownership Trubaindo 3.0 mt Operational 4Q04 Jorong 3.0 mt Indominco-Bontang 8.0 mt Kitadin-Embalut 1.8 mt 21

22 Total production for 2004 is on target Strong price outlook will off-set higher costs from higher SR; stock build-up is underway Indominco-Bontang Q1 Q2 Q3 Q4e SR 7.4:1 9.9:1 9.7:1 2004e 8.0mt Higher SR due to mining at flatter pitwall; Production target is adjusted down due to technical difficulties Kitadin-Embalut Q1 Q2 Q3 Q4e SR e 1.8mt Good progress in overburden removal has helped smooth production Jorong Q1 Q2 Q SR Q4e e 3.0mt Economy of scale achieved through strong production LP-2 / CMMC Q1 Q2.5.7 SR Q Q4e e 2.7mt 22

23 New coal projects on schedule Project Location Banpu % Reserves Operational Peak production Coal type Status Trubaindo Kalimantan, Indonesia 95% 52 mt 4Q mt (2006) 6,950 kcal/kg Operational in 4Q04 Daning Shanxi Province, China c.21% 79 mt Late mt (2005) Anthracite Under construction (onschedule) 23

24 Trubaindo : Loading port 24

25 Trubaindo : Coal stock yard Reclaiming pit 25

26 Trubaindo : Coal hauling road 26

27 Trubaindo : Kedang Pahu Bridge Concrete form work 27

28 Trubaindo : Crushing plant Dump Hopper, Primary Crusher Secondary Crusher Radius Stacker 28

29 Trubaindo : Coal stock Temporary ROM Stockpile Mine Operation Seam 3000 Coal Getting Seam 3000 Coal Getting Seam

30 4. Commercial review Rawi Corsiri Chief Operating Officer 30

31 c.45% of sales (by value) are to premium Asian markets Coal sales by value: Bt4,738m in 3Q04 Coal sales by volume: 4.1 Mt in 3Q04 Mt India 10% Italy 10% % 29% Thai mines Jorong Kitadin-Embalut Indominco-Bontang Japan, Korea, Taiwan, Hong Kong 45% Philippines 7% Indonesia 2% Others 1% % 9% 9% Thailand 25% 5% 1% - Japan, Korea, Taiwan, HK Thailand India Italy Philippines Indonesia Others 31

32 Coal prices soften but still high relative to historical level Recent prices trend Coal price softens due to easing fears of supply shocks Short-term outlook Prices in 2005 are likely to stay high relative to historical trend US$/Tonne BJI* Avg. October 04: $53.50 Main drivers Fluctuation in Chinese export will influence price outlook for Asia-Pacific region Note: *Barlow Jonker Index (BJI) based on CV 6,700 kcal/kg GAD from Australia to Japan Source: Barlow Jonker 32

33 But, Banpu average selling price to increase in 2005 US$/Tonne Banpu s coal selling prices are on the uptrend while benchmark prices have peaked ASP 2004 is expected at $25.5 per tonne (+15% from 2003) BJI Weighted avg Indominco ASP 2005 is expected to rise by at least 20% from Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04E 1Q05E 33

34 Because over 50% of 2005 volumes already secured 100% Unpriced Base price % 44% 49% Base price 2003 Base price % Note:For Indonesian coal only 15% 40% 56% 20% 51% 43% 0% 1%

35 5. Financial review Somruedee Somphong Chief Financial Officer 35

36 Coal business revenues increased by 19% QoQ Bt. million (20) +18 (21) 4,738 3,422 2,958 4, % 40% Increased 33% QoQ due to: 10% increase in sales volume and 18% increase in selling price 3Q03 1Q04 2Q04 Indominco Kitadin Jorong Coal Thai 3Q04 Note : Revenues from other businesses (e.g. industrial minerals) are not included 36

37 Average gross profit margin increased to 40% Bt. million GPM Sales revenue 40% 2,993 Indominco-Bontang 32% 30% 2,002 2,245 38% 629 Kitadin-Embalut 50% % % 693 Jorong 41% % 622 Thai mines 40% 38% Q04 2Q04 35% 178 3Q03 37

38 Strong core business generates higher net profit 733 (321) (39) (93) (291) 1,129 Increased 13% QoQ, in line with higher sales revenue 69 1, Increased 18% QoQ: slightly higher sales volume and 13% QoQ increase in ASP Higher tax from increased profit and taxable gain on ATC divestment 2Q04 3Q03 2Q04 Revenues COGs SG&A Royalty Other incomes Financial charges Income taxes Nonrecurring 3Q04 FX Others 3Q04 38

39 Summary of income statement Sales increased from higher tonnage and selling price GPM rose to 40%, in line with higher ASP Dividend income Bt196m mostly from RATCH Higher tax payment due to stronger operation and tax charge on divestment of non-core asset (ATC); Tax shield used up by 2Q04 Non-recurring reflects 12.6m shares of ATC sold Net profit Bt1,193m Year-end Dec (Btm) 3Q04 2Q04 3Q03 Coal sales volume (k tonnes) 4,098 4,041 3,854 Sales revenues 4,785 4,053 3,466 Cost of sales (2,860) (2,539) (2,478) Gross profit 1,925 1, GPM 40% 37% 29% Adminstrative expenses (226) (202) (180) Selling expenses (252) (238) (220) Royalty (480) (387) (363) Equity income - Pow er (22) (53) 270 Dividend income - Pow er Other income EBIT 1, EBIT margin 25% 22% 23% Interest expenses (107) (110) (131) Financial expenses (34) (35) (41) Income tax (456) (164) (55) Minorities (26) (12) (5) Net profit before extra item s Non-recurring items Bond redemption premium - - (57) Mining property expense (18) (15) (11) Net profit 1,156 1, FX translations (151) Net profit 1,193 1, EPS (Bt/share) Depreciation Amortization EBITDA 1,566 1,

40 Balance sheet remains strong Net D/E (Times) Debt profile Fixed rate 82% Floating rate 18% 3Q03 4Q03 1Q04 2Q04 3Q04 As end of 3Q04 40

41 Capital expenditure plan (US$, mln) Total Existing mines and others Expansion and replacement Indominco-Bontang Total New investment New coal mine projects Trubaindo Bharinto China * Total Project - Power BLCP - 50% equity Total Grand total * Planned investments in China are under management s review 41

42 Question & Answer