PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — Adaro Energy — Investor Presentation (February 2018)
26 slides from PT Alamtri Resources Indonesia Tbk's investor presentation, February 2018
Slide 1: Energy for Change
ENERGY FOR CHANGE 1 February 2018
Slide 2: Key questions
Key questions: • What is Adaro Energy guidance for 2018? • What is the outlook for coal industry? • What is the progress of Adaro Energy’s projects? • What is Adaro Energy’s strategy and future plans? 2
Slide 3: Adaro Energy 2018 guidance
Adaro Energy 2018 guidance Coal production (Mt) Consolidated planned strip ratio (bcm/t) 56.2 5.6 5.7 54 - 56 5.2 4.9 4.6 4.5 52.3 52.5 51.5 51.8 2013A 2014A 2015A 2016A 2017A 2018F 2013A 2014A 2015A 2016A 2017A 2018F Operational EBITDA (US$ billions) Capital expenditure (US$ million) 750 – 900 1.3
Slide 4: Coal price gaining back momentum
Coal price gaining back momentum 120 750 110 700 100 650 90 600 80 550 RMB US$ 70 500 60 450 50 400 40 350 30 300 Global Coal Newcastle (US$) QHD 5500 NAR (RMB) • Despite higher demand for coal in 2017, supply was unable to catch up, therefore coal prices remained resilient. • Domestic thermal coal
Slide 5: Long term coal demand outlook remains robust
Long term coal demand outlook remains robust… Seaborne thermal coal demand by country (Mt) • As China’s dominant role in the seaborne market gradually cedes, Southeast Asia and India will become the key drivers. • Electrification in the developing world continues to drive coal demand. Despite progre
Slide 6: …especially from Southeast Asia
…especially from Southeast Asia Coal capacity additions inSoutheast Asia per annum • Coal remains as the fuel of choice for developing economies in Southeast Asia. – Affordable and abundant. • Between 2018-2020 there will be ~13GW of coal fired capacity commissioning in SEA. • Wood Mackenzie expects
Slide 7: Quick look on Indonesia
Quick look on Indonesia Indonesia generation-mix and exports (TWh, Mt) • Indonesia will need to constantly balance its export and domestic market, especially in the near term when exports remain high. » With nearly 50 GW of coal capacity additions and domestic demand growing 2.5 times between now to
Slide 8: Performance of Adaro Energy
Performance of Adaro Energy 8
Slide 9: Resilient operational and financial results
Resilient operational and financial results OPERATIONAL 2017 2016 % Change Production (Mt) 51.79 52.64 -2% Sales (Mt) 51.82 54.09 -4% OB removal (Mbcm) 238.70 234.13 2% FINANCIAL (US$ millions, unless indicated) 9M17 9M16 % Change Net Revenue 2,439 1,778 37% Core Earnings 495 281 76% Operational EBI
Slide 10: Summary of Adaro's operational achievement in 2017
Summary of Adaro’s operational achievement in 2017 4Q17 vs. 4Q17 vs. FY17 vs. Units 4Q17 3Q17 4Q16 FY17 FY16 3Q17 4Q16 FY16 Coal Production Mt 12.43 14.23 -13% 13.31 -7% 51.79 52.64 -2% Sales Volume Mt 12.39 14.17 -13% 13.64 -9% 51.82 54.09 -4% Overburden Removal Mbcm 55.53 71.40 -22% 59.35 -6% 238.
Slide 11: Solid balance sheet and strong cash generation
Solid balance sheet and strong cash generation Reduced debt and achieved net cash Strong cash balance and free cash flow generation 2,500 2.0 1200 2,000 1000 1.6 1,500 800 1.2 1,000 600 0.8 500 400 0.4 0 200 2012 2013 2014 2015 2016 9M17 -500 0.0 0 2012 2013 2014 2015 2016 Net debt (cash) (million U
Slide 12: Cost control – key in delivering strong performance
Cost control – key in delivering strong performance Adaro’s estimated coal cash cost 45% Operational EBITDA margin breakdown (9M17) 40% Fixed 35% overhead, Mining, 30% 5% 35% - 40% 25% Coal processing, 20% 10% 15% 10% Freight & handling, 5% 20% 0% Harum PTBA Adaro Shenhua ITMG Fuel, 25% - Source: Bl
Slide 13: Delivering return to shareholder
Delivering return to shareholder 150 60% 50% 120 40% 90 30% 60 20% 30 10% 0 0% 2012 2013 2014 2015 2016 Dividend (million US$) Payout Ratio • Adaro has continued to pay dividend through the cyclical downturn. • Dividend payout ratio since IPO in 2008 averages ~38% and in total we have paid US$1.07 b
Slide 14: Snapshot of Adaro Energy
ak wr adaro# STORY years, Snapshot of Adaro Energy
Slide 15: Business model that creates sustainable value
Business model that creates sustainable value PT Adaro Energy, Tbk (AE) *Simplified Corporate Structure Adaro Mining Adaro Mining Adaro Logistics Power Services Adaro Indonesia (AI) 88.5% Saptaindra Sejati 100% Maritim Barito 100% Makmur Sejahtera 100% Coal mining, S Kalimantan (SIS) Perkasa (MBP) W
Slide 16: Adaro Mining
Adaro Mining 16
Slide 17: Diversified Coal Assets Across Indonesia
Diversified Coal Assets Across Indonesia 5 Deepening Coal Product Portfolio and Set to Capitalize Assets to Support Indonesia’s Development 6 1 2 3 4 Adaro has more than 13.5 billion tonnes (Bt) of coal resources (including option to acquire 7.9 Bt) and 1.2 Bt of coal reserves. 1 2 3 4 5 6 Adaro Bal
Slide 18: Over two decades of solid production performance
Over two decades of solid production performance Adaro’s historical production 60 350 2018 2017 2016 Units Guidance Actual Actual Production 300 50 Mt 54 – 56 51.8 52.6 volume Overburden Removal (Mbcm) Strip ratio bcm/tonne 4.9 4.61 4.45 250 40 Production (Mt) 200 30 150 20 100 10 50 0 0 1998 2011 1
Slide 19: Strong customer base with focus on Indonesia
Strong customer base with focus on Indonesia Customer type by volume (2017) Geographical breakdown of customers (2017) Philippines, Others, 4% 3% 10% Spain, 4% Indonesia, 20% Taiwan, 6% Hong Kong, 7% Malaysia, 15% India, 8% Power China, 12% Others 90% Japan, 10% South Korea, 11% * Others include cem
Slide 20: Snapshot of Adaro MetCoal Companies (AMC)
Snapshot of Adaro MetCoal Companies (AMC) • Adaro Energy completed the acquisition of AMC from BHP Billiton for 7 CCOWs in Central and East Kalimantan. • The transaction value was $120 million for 75% of the properties. Adaro now owns 100% of the asset. • First coal production has started at the Haj
Slide 21: Adaro Services and Logistics
Adaro Services and Logistics 21
Slide 22: Ensuring operational excellence
Ensuring operational excellence Strengthens Adaro’s Earnings Profile as Contribution to Parent Co Increases • Key part of our vertical integration. • Ensures operational excellence, productivity improvement and timely reliable delivery to customers. • Non coal mining business accounted for 31% of Ad
Slide 23: Adaro Power
Adaro Power 23
Slide 24: Building the foundation of Adaro's future
Building the foundation of Adaro’s future Bhimasena Power Indonesia Tanjung Power Indonesia Capacity 2x1000 MW 2x100 MW Stake 34% 65% Acquired Partner(s) J-Power (34%), Itochu (32%) Korea EWP (35%) Location Central Java South Kalimantan • Signed 25 years PPA with PLN • Signed PPA with PLN • Total Ca
Slide 25: Conclusions and takeaways
Conclusions and takeaways • Coal market is poised to reach supply and demand balance. • Indonesia to lessen coal export and focus on the domestic market. • Long term fundamental for coal remains promising. - Indonesia, Southeast Asia and India will be the main drivers. • Our resilient business model
Slide 26: Thank you
Thank you 26 This presentation is also available at http://www.adaro.com/pages/read/10/45/Presentation