PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — Macquarie ASEAN Conference 2013
34 slides from PT Alamtri Resources Indonesia Tbk's conference presentation, August 2013
Slide 1: Delivering Positive Energy
Delivering Positive Energy Macquarie ASEAN conference, August 2013, Singapore
Slide 2: Disclaimer
Disclaimer These materials have been prepared by PT Adaro Energy (the “Company”) and have not been independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained
Slide 3: Agenda
Agenda I. Corporate Information II. Adaro’s Strategy III. Industry Outlook 3
Slide 4: I. Corporate Information
I. Corporate Information 4
Slide 5: Adaro Energy Snapshot
Adaro Energy Snapshot • Largest single-location coal 2010A: 42.2 Mt producer in southern hemisphere Production 2011A: 47.7 Mt 2012A: 47.2 Mt (5 year CAGR 6%) • Top 5 thermal coal exporter globally Sub-bituminous, medium calorific • Largest supplier to domestic market Envirocoal value, ultra-
Slide 6: Key Messages
Key Messages • On track to deliver on our long-term strategy to create maximum value from Indonesian coal. • Focus on core business, operational excellence, risk reduction and customers. • Monitor and reduce expenses and capital expenditures to preserve cash. • Continue to improve efficiency and cre
Slide 7: Recent Performance: On Track
Recent Performance: On Track • EBITDA US$190 million for 1Q13 • We achieved record quarterly with an EBITDA margin of 25.6%, production volume in 2Q13 of amongst the best in the industry. 13.52 Mt, bringing 1H13 total to 24.94 Mt. On track to achieve 2013 production guidance of 50 to 53 Mt. • Adaro
Slide 8: Adaro's Operational and Financial Highlights
Adaro’s Operational and Financial Highlights OPERATIONAL 1H 2013 1H 2012 % Change Production (Mt) 24.94 23.01 8% Sales (Mt) 25.00 23.69 6% OB removal (Mbcm) 142.07 156.83 -9% FINANCIAL (US$ millions, unless indicated) 1Q 2013 1Q 2012 % Change Net revenue 741 916 -19.1% Cost of revenue (583) (616) -5
Slide 9: 2013 Guidance
2013 Guidance Production Volumes (Mt) Consolidated Strip Ratio (x) 50 - 53 6.4 47.7 47.2 5.5 5.9 5.75 38.5 40.6 42.2 5.0 4.25 2008A 2009A 2010A 2011A 2012A 2013F 2008A 2009A 2010A 2011A 2012A 2013F Coal Cash Cost (ex-royalty, US$/t) 36 39 35-38 27 27 31 2008A 2009A 2010A 2011A 2012A 2013F EBITDA (US
Slide 10: Creating Sustainable Value from Indonesian Coal
Creating Sustainable Value from Indonesian Coal Pit to Power Integration PT Adaro Energy Adaro Mining Adaro Mining Adaro Adaro Power Assets (ATA) Services Logistics Adaro Indonesia (AI) 100% Saptaindra 100% Maritim Barito 100% Makmur Sejahtera 100% Coal mining, S Kalimantan Sejati (SIS) Perkasa (MBP
Slide 11: Adaro Energy Mining Assets
5 Adaro Energy Mining Assets 6 12 billion tonnes of coal resources are attributable to Adaro across 5 locations and 17 mining concessions, eight of which are CCA and CCoWs and the remaining IUPs. 1 2 3 4 1 2 3 4 5 6 Adaro Indonesia: Balangan: MIP: 75% stake BEE: 61.04% BEP: 10.22% IMC: 25% joint Exi
Slide 12: Adaro Indonesia Core Operations
Adaro Indonesia Core Operations Coal Cooperation Agreement – Adaro Indonesia Shiploading at Taboneo offshore Indonesia Bulk anchorage Terminal, Pulau Laut Barging to Indonesia Bulk Terminal Barging to domestic customers 12
Slide 13: Supply Chain Vertical Integration
Supply Chain Vertical Integration Coal Mining Coal Hauling • Adaro Indonesia (AI) produced 47.2 Mt • 80km private paved haul road using in 2012 from a single Coal Cooperation chipseal, which improves the operational Agreement (CCA) area in S Kalimantan. efficiency. • 921 Mt of Reserves and 4.7 Bt of
Slide 14: Supply Chain Vertical Integration
Supply Chain Vertical Integration Coal Processing & Barge Loading Barging At Kelanis river terminal: • Supported by our subsidiary, • Expanding to reach 70 Mt PT Maritim Barito Perkasa (MBP). coal-handling capacity per year. • 55 sets of tugs and barges used by • 450,000 tonne stockpile + 80,000 ton
Slide 15: Supply Chain Vertical Integration
Supply Chain Vertical Integration Barito River Channel Shiploading and Port • Sarana Daya Mandiri (SDM), dredged • Offshore loading at Taboneo: capacity the river channel in 2008, increasing up to 165,000 tonnes/day: 5 floating capacity to 200 Mt per year and now cranes (15,000-20,000 tonnes/day, ma
Slide 16: Diversified Customer Base with Long-term Contracts
Diversified Customer Base with Long-term Contracts Customer type by % volume (1H13) Geographical breakdown of customers (1H13) Taiwan, 2% Others, 4% 1% America, 7% 3% China, 5% Indonesia, Malaysia, 20% Power 7% Cement Spain, 7% India, 22% Others Korea, 8% 91% Japan, 12% Hong Kong 9% Mostly sovereign
Slide 17: Significant Scale and Profitability
Significant Scale and Profitability 2012 Production Volumes (Mt) 2012 Largest Producing Concession in Southern Hemisphere (Mt) 248.5 47.2 43.7 33.7 29.5 30.0 79.2 73.6 19.9 74.2 68.7 11.3 47.2 27.2 14.0 Arutmin Indonesia Loy Yang Berau Kideco KPC Indominco ITM Bumi Peabody thermal thermal Xstrata -
Slide 18: Exceptional Access to Capital
Exceptional Access to Capital 2009: US$800 million 10-year, non call 5, Reg S/144A, 2012: US$160 million 7 year, concluded with 10 Guaranteed Senior Notes banks • Currently rated at Ba1 and BB+ • Received total commitments of • Received total commitments of US$6 billion US$915 million with one b
Slide 19: Reputable Shareholders and Experienced Management
Reputable Shareholders and Experienced Management Reputable and Supportive Shareholders Management Team with Proven Track Record • Edwin Soeryadjaya • More than 100 years of combined industry experience • Teddy Rachmat • Combined 64 years at Adaro Energy together • Boy Garibaldi Thohir hold 64% • Be
Slide 20: CSR Commitment has been Recognized
CSR Commitment has been Recognized PROPER Gold Award for the year 2012 Primaniyarta Award in 2007, 2010 and 2011 Adaro Indonesia received the highest level Best performing exporters from the Ministry of PROPER award for environmental rehabilitation Trade. Presented by Indonesia’s Vice President exce
Slide 21: II. Adaro's Strategy
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Slide 22: Our Strategy to Create Long-term Value
Our Strategy to Create Long-term Value Organic Improve Increase Deepen growth efficiency reserves integration from our current of our coal supply and diversify by moving reserve base chain and focus products, locations downstream into on cost control power generation • Organic growth in and licenses
Slide 23: Proven Track Record of Production Growth
Proven Track Record of Production Growth 2013 2012 2011 2010 Units Guidance Actual Actual Actual Production volume Mt 50 – 53 47.2 47.7 42.2 E5000 Mt 37 39.5 42.3 39.7 E4700 Mt 8 n.a. n.a. n.a. 47.7 47.2 E4000 Mt 8 7.6 5.4 2.5 Strip ratio bcm/tonne 5.75 6.4 5.9 5.5 42.2 331.5* 40.6 38.5 299.3 36.1 3
Slide 24: Improving Efficiency and Cost Control
Improving Efficiency and Cost Control Adaro has consistently engaged in cost-reduction projects, including sealing the haul road, dredging the Barito River channel and pioneering the Taboneo offshore anchorage Project Purpose Budget Spend to 1H13 Completion Overburden Crusher Transport 34 Mbcm of US
Slide 25: Acquired Assets
Acquired Assets Acquisition Price/ Date Location Asset License / Expected Ownership Expiry Operation IndoMet Coal (IMC) US$335m Mar Central Greenfield - CCoW 30 years 2013 JV with BHP 25% 2010 Kalimantan coking coal after mining start Mustika Indah US$222.5m Aug South Greenfield - IUP 2013 - Permai
Slide 26: South Sumatra Strategy
South Sumatra Strategy MIP JORC Compliant Coal Resources and Reserves (Millions of ROM Tonnes) Total Ash % Total Sulfur % Calorific Value Total (Mt) Moisture % (GAR) (GAR) (kcal/kg, GAR) Resources 282 33.9 5.5 0.4 4,345 Reserves 273 34.1 6.0 0.4 4,281 The key advantages of our investments in South S
Slide 27: Deepen Integration by Moving into Power
Deepen Integration by Moving into Power Bhimasena Power South Kalimantan 2 x 1000 MW 2 x 100 MW Stake Acquired 34% 65% Partner(s) J-Power (34%) and Itochu (32%) Korea EWP (35%) Location Central Java South Kalimantan • Commercially and financially attractive with solid IRR and low-cost long-term proj
Slide 28: III. Industry Outlook
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Slide 29: Historical Newcastle Thermal Coal Price
Historical Newcastle Thermal Coal Price McCloskey Newcastle 250 200 192.5 150 100 77.3 50 0 Aug-03 Aug-04 Aug-05 Aug-06 Aug-07 Aug-08 Aug-09 Aug-10 Aug-11 Aug-12 Aug-13 • Wood Mackenzie expects little movement in Newcastle benchmark price in 2013 as market continues to rationalize supply. In 2014, w
Slide 30: Market Update: Prices
Market Update: Prices 4-Jan-13 7-Jun-13 ∆ (%) • Newcastle has dipped to the mid-$83 level this week, gCN 94.16 86.62 -8% dragged by the sharp drop of the API2 index API2 87.41 77.21 -12% API4 88.87 81.60 -8% • Indonesian indices have held better than other ICI3 - 5000 GAR 57.95 59.96 3% internationa
Slide 31: Landed Cost by Origin
Landed Cost by Origin FOB cost Freight CIF CIF South China Origin CV (US$) (US$) (US$) @ 6000 (US$)* Indonesia 4700 49.00 8.00 57.00 72.77 South Africa 6000 62.00 15.00 77.00 77.00 Colombia 6000 53.00 26.50 79.50 79.50 USA - Illinios 6000 60.00 25.00 85.00 85.00 Australia 6000 73.00 13.50 86.50 86.5
Slide 32: Fundamentals Remain Intact
Fundamentals Remain Intact • Seaborne import demand for thermal coal totaled ~909 Mt in 2012 and is expected to increase to 1,721 Mt by 2025, with growth primarily in Asia. • Low rank coal will continue to be an important component of the fuel supply mix in Asia, contributing 35% to 40% of seaborne
Slide 33: Demand in China and India Still Strong
Demand in China and India Still Strong CHINA: Lower but Stable Growth Rate in the Future • Chinese coal imports reached another record high at 242.5 Mt in 2012. 2011 2012 Source: China Coal Resource Imports (Mt) 176.0 242.5 • Wood Mackenzie expects China’s thermal imports to be 241 Mt and 267 Mt in
Slide 34: Thank You
Thank You Delivering Positive Energy 34