PT Indika Energy Tbk · IDX:INDY
PT Indika Energy Tbk — FY2020 Earnings Presentation
54 slides from PT Indika Energy Tbk's earnings presentation, Apr 5, 2021
Slide 1: Indika Energy Group Company Update FY 2020
INDIKA ENERGY GROUP COMPANY UPDATE FY 2020 PT Indika Energy Tbk. 5 April 2021
Slide 2: Disclaimers
Disclaimers Investors and security holders are cautioned that this communication contains forward-looking statements and that forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict and are generally beyond the control of PT Indika Energy Tbk
Slide 3: Table of Contents
Table of Contents Page # ▪ Indika Energy - Overview 4-5 ▪ Proactive Response during Covid-19 pandemic 6 ▪ Income Statement Analysis 7-8 ▪ Highlights – Latest Cash and Debt Position 9 – 10 ▪ Proactive Liability Management amid Low Coal Price Environment 11 ▪ Cost Saving and Improvement Initiatives 12
Slide 4: Indika Energy is Indonesia's Leading Integrated and Diversified Company
Indika Energy is Indonesia’s Leading Integrated and Diversified Company ✓ Integrated energy value chain with portfolio spanning across Indonesia ✓ Well-placed to capture domestic economic growth and global economic recovery ✓ Provides complementary products and services to domestic and international
Slide 5: Key Recent Development
Key Recent Development Jun-2020: Revised Dec-2020: wins Gold PROPER mining law passed Award, the highest recognition Dec-2017: Increased Apr-2018: Signed a storage Mar-2019: Construction from Ministry of Environment and stake in Kideco to facility Agreement with PT agreement with PT Freepo
Slide 6: Proactive Response to COVID-19
Proactive Response to COVID-19 Prioritizing health and safety measures for all employees; imposing stringent Covid-19 protocol, including: ▪ Regular testing for Covid-19 PCR Swab for all employees, both in Jakarta and in mine sites. ▪ Restricted access to mine sites and building. Requirement for a
Slide 7: Indika Energy – FY20 Revenue Breakdown
Indika Energy – FY20 Revenue Breakdown Revenue FY20: US$2,077.2 million Revenue FY19: US$2,782.7 million MBSS Others MBSS Others 3% 5% 3% 3% 4) Tripatra Tripatra 15% 13% Petrosea Kideco Petrosea Kideco 52% 55% 16% 15% Indika Indika Resources Resources 11% 9% FY20 Revenues FY19 Revenues Subsidiary Yo
Slide 8: Consolidated Income Statement Highlights
Indika Energy’s Consolidated Income Statement Highlights Summary P&L Quarter Data Year To Date 4Q20 4Q19 YoY 2Q20 QoQ FY20 FY19 YTD YoY Revenues 538.6 702.8 -23.4% 409.7 31.4% 2,077.2 2,782.7 -25.4% COGS (499.0) (604.0) -17.4% (369.7) 35.0% (1,823.3) (2,356.0) -22.6% Gross Profit 39.6 98.8 -59.9% 40
Slide 9: Indika Energy – Strong Cash Position
Indika Energy – Strong Cash Position Cash and Debt Breakdown as of 31 December 2020 US$ million 4) 1,691.7 1800.0 33.9 1600.0 1400.0 407.8 1200.0 1000.0 792.11) 800.0 79.6 61.3 600.0 1,250.0 400.0 651.2 200.0 0.0 CASH DEBT Cash Fin. Assets Rest. Cash Bonds 2) Bank Loans 3) Leases 4) 1) PTRO: US$134.
Slide 10: Indika Energy – Sound Balance Sheet
Indika Energy – Sound Balance Sheet Cash Breakdown by Subsidiaries LTM Free Cash Flow US$ million US$ million HoldCo & Others Kideco Petrosea Tripatra MBSS 350 323.0 35.2 300 34.6 40 42.7 133.6 40.3 250 152.5 134.4 211.0 154.3 198.4 81.3 200 176.4 59.6 187.5 84.7 144.4 171.3 150 122.9 114.1 37.5 60.
Slide 11: Successful Refinancing to Support Future Growth
Successful Refinancing to Support Future Growth Indika Energy successfully issued global bond of US$675million with 5-year tenor and 8.25% coupon • Additional debt to support diversification plan • Improve liquidity and lengthen maturity profile • Obtained 85.9% consent from 2024 bondholders to alig
Slide 12: Strengthen Balance Sheet with active liability management
Strengthen Balance Sheet with active liability management ✓ Extending bonds maturity in 2022 & 2023 to 2025 ✓ Net debt to EBITDA was 3.3x as of Dec 2020 ✓ Cash balance remains strong at USD792.1m as of Dec 2020 ✓ Selective capital spending – balancing maintenance capex and replacement and additional
Slide 13: Group-wide Cost Saving and Operational Improvement Initiatives
Group-wide Cost Saving and Operational Improvement Initiatives Oil Brent Price US$/bbl • Minerva Project - a technology-based initiative, using 80 digitalization and data analysis. Three main areas of 70 improvement: 60 ✓ Fleet management system 50 52 40 ✓ Mine planning 30 ✓ Performance management 2
Slide 14: Operational Improvement also reduces carbon emissions
Operational Improvement also reduces carbon emissions Fuel Consumption Mine Planning Optimization Some benefits of technological application in our operations: Fuel consumption: provide real-time monitoring of Energy use management: Optimize mine design Fuel performance with capturing man, machine a
Slide 15: Petrosea Inducted into WEF's Global Lighthouse Network
Petrosea has been Inducted into WEF's Global Lighthouse Network Industrial lighthouses are diversifying and digitizing beyond the four walls of the factory Petrosea is the only local company in Indonesia and Southeast Asia with this status 15
Slide 16: Operational Highlights Vs 2020 Corporate Guidance
Indika Energy’s Operational Highlights Vs 2020 Corporate Guidance 2020 2020 Revised Revised CAPEX Budget FY20 % Operational Data Guidance Budget FY20 FY19 % KIDECO (US$M) (US$M) Production (MT) 33.1 33.0 34.3 -3.8% Strip Ratio (x) 5.8 5.7 6.3 -9.5% Kideco 3.4 1.3 37.9% Newcastle Benchmark ($/ton) 60
Slide 17: Corporate Guidance 2021
Corporate Guidance 2021 FY20 2021 Change CAPEX FY20 2021 Budget Change Operational Data Guidance Actual Budget (%) (US$M) (US$M) (%) KIDECO Kideco 1.3 12.9 892.3% Production (MT) 33.0 30.0* / 34.0 N/A Petrosea 30.0 80.0 166.8% Strip Ratio (x) 5.7 5.5 -3.5% MBSS 14 6.9 -50.7% Newcastle Benchmark ($/t
Slide 18: Thermal Coal Price 2021 – Improved Coal Price Environment
Thermal Coal Price 2021 – Improved Coal Price Environment USD/ton CNY/ton 140 900 117.5 782.0 120 800 655.7 692.9 701.5 597.2 700 100 609.0 85.8 600 97.2 630.0 570.1 80 95.7 80.1 514.5 500 92.4 52.8 366 66.1 60 63.9 400 51.3 54.2 43.1 48.0 300 40 42.0 40.1 37.6 33.5 32.3 200 26.6 24.2 20 100 0 0 1Q1
Slide 19: Indonesia Coal Sector
Indonesia Coal Sector National Coal Production China Coal Import Million Ton Million Ton Indonesia Other Countries National Coal Production Domestic Consumption 350.0 700 610 300.0 600 549 561 550 451 459 461 250.0 500 163.1 156.2 160.8 400 200.0 162.1 151.8 300 150.0 130.2 200 138 138 100.0 128 115
Slide 20: Coal Outlook – LT Demand Remains Solid
Coal Outlook – LT Demand Remains Solid Source: BP Energy Outlook 2019 • In the LT basis, International Energy Agency forecasts higher global coal consumption by 2030 and only marginally lower consumption by 2040 • Thermal coal remains the largest power generator in the world • Growing demand driven
Slide 21: Kideco: Impact of the Revised Mining Law
Kideco: Impact of the Revised Mining Law On 10-Jun-2020, the Indonesian parliament issued Mining Law No. 3 of 2020, which technically guarantees holders of CoW / CCoW extensions for an effective: (a) 20 years (in the form of two 10-year extensions) if the CoW or CCoW has never been extended; or (b
Slide 22: Strategies to Enhance Our Position as a Leading Integrated and Diversified Company
Strategies to Enhance Our Position as a Leading Integrated and Diversified Indonesian Company Continue to extract operational efficiencies and harness significant synergies among Group companies • Continuing to increase operational efficiency and reduce costs • Managing capital expenditure and negot
Slide 23: Diversification Beyond Coal is a Core Part of Strategy
Diversification Beyond Coal is a Core Part of Strategy ✓ Target non-coal related businesses to make up c.50% of total revenue Non Coal : 24% by 2025 Others Tripatra 5% ✓ Seeking to transition toward lower contribution from coal-related 13% activities Petrosea E&C & etc ✓ Various initiatives underway
Slide 24: Diversification Investments – Gold Asset Project
Diversification Investments – Gold Asset Project A Strategic investment in Nusantara Resources Limited (ASX: NUS). Nusantara owned 100% PT Masmindo Dwi Area which has sole rights to exploit in Awak Mas Gold Project Location : South Sulawesi, 370 km from Makasar Potential Resources : 2.35 million onz
Slide 25: Awak Mas/Masmindo Gold Project – Investment Structure
Awak Mas/Masmindo Gold Project – Investment Structure Exercised 1st option: After 2nd option: USD 15m for 25% in MDWI USD 25m for 15% in MDWI Project Activities 2 stage Stage 1 : To reach Final Investment Decision (1H21) Current ownership: 45.8% Complete: FEED Potential ownership: 56.7% Detailed Des
Slide 26: Diversification Investments – Fuel Storage Project
Diversification Investments – Fuel Storage Project Build and operate fuel storages exclusively for ExxonMobil Phase 1 Location : Balikpapan, Kariangau, East Kalimantan Project Company : PT Karingau Gapura Terminal Energy Total Project Cost : US$115million Funding Structure : US$75 million - bank loa
Slide 27: Diversification Investments – Patimban Port
Diversification Investments – Patimban Port ▪ A strategic infrastructure project development; as the first integrated supply chain port in Indonesia ▪ On 30 Dec 20, Ministry of Transport has appointed Consortium of Patimban as operator of Patimban Port ▪ Indika joined the consortium through Indika L
Slide 28: Diversification Investments – Renewable Energy
Diversification Investments – Renewable Energy DIVERSIFICATION • Indika Energy partners with Fourth Partner Energy, India’s leading solar INVESTMENT developer, to launch an integrated solar power company, Empat Mitra Indika Tenaga Surya (EMITS), with 51% stakes. Solar-powered Solutions • EMITS will
Slide 29: Strong Focus on and Commitment to ESG Initiatives
Strong Focus on and Commitment to ESG Initiatives Environmental Social Responsibility Governance ✓ Comply with all Indonesian environmental laws, ✓ Focus on supporting long-term economic growth and improving the quality of life in regions of operation regulations and standards ✓ Continuously impleme
Slide 30: Awards / Recognition/Certification
Awards / Recognition/Certification • Kideco has won Gold PROPER National Award from Ministry PT Indika Energy Tbk has been ranked 1st in the Basic Materials of Environment and Forestry (KLH) - 2020 Sector of the 2020 Global Fixed-Income Investor Relations • Out of 2,038 national companies participat
Slide 31: Environment
Environment ✓ Comply with all Indonesian environmental laws, regulations and standards International HSE Standards in Our Operations ✓ Asset environmental impact based on five key factors ✓ Environmentally friendly technologies at operations ✓ Occupational Health & Safety Management System ISO 45001
Slide 32: Social Responsibility
Social Responsibility Protect health and wellbeing of Indika’s people and have a positive impact in the community Key Initiatives Indika Foundation Develop education infrastructure ✓ Established in 2017 Provide scholarships and key skills vocational training ✓ Key initiatives and programs Engi
Slide 33: Governance
Governance High Commitment on Commitment to Highly Ethical Business ✓ Continuously implementing and improving good corporate governance GCG Principles Practices ✓ Recent addition of three individuals to Board of Directors, including a 1. Transparency 1. High integrity in business female member (repr
Slide 34: Appendix
INDIKA ENE 34
Slide 35: Indika Energy, Indonesia's leading fully integrated energy company
Indika Energy, Indonesia’s leading fully integrated energy company PT Indika Energy Tbk. 1 ▪ Energy Resources 2 ▪ Energy Services 3 ▪ Energy Infrastructure 4 ▪ Other Portfolios - Established since 1991 - Established since 1994 - Established since 2011 - 3rd largest coal producer - Integrated water c
Slide 36: Group synergy and multi-sector expertise
As a Group, Indika Energy creates synergy and offers comprehensive set of multi-sector expertise and competencies Synergy across the Group Example: IEG end-to-end competencies in coal value chain Identification / • Operational synergy from intra-Group cross-selling acquisition of assets resources op
Slide 37: Indika Energy Subsidiary Results
Indika Energy Subsidiary Results Petrosea MBSS Tripatra Cirebon Electric Power Total Backlog Total Backlog Total Backlog 660MW Power Plant $830.0M $92.5M $147.0M FY20 Net Income FY20 Net Income FY20 Net Income FY20 Net Income $32.5M - $14.9M -$43.5M $6.7M (20% Indika) FY20 EBITDA Margin FY20 EBITDA
Slide 38: Indika Energy's Subsidiaries Backlog
Indika Energy’s Subsidiaries Backlog New Contract/ Remaining Revenue Remaining Adjustment Value Descriptions Contract Value Recognition Contract Value in 2020 Per 31 Dec 2019 Per 31 Dec 2020 Per 31 Dec 2020 Petrosea Contract mining 483.1 477.4 209.9 750.6 E&C 120.1 (7.0) 65.8 47.3 POSB 51.4 4.5 23.8
Slide 39: Indika Energy's Financial Highlights
Indika Energy’s Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 3,500.0 800 780 2,962.9 3,000.0 641.2 700 650 2,500.0 600 508.1 2,079.9 2,077.2 520 500 2,000.0 426.7 390 400 1,500.0 289.5 1,098.8 253.9 300 260 1,000.0 775.2 200 122.9 115.9 500.0 130 88.7 100 34
Slide 40: Key Business and Credit Ratios
Indika Energy’s Key Business and Credit Ratios LTM Adj EBITDA* (USD mn) & LTM Adj EBITDA Margin (%) Gross Debt & Net Debt / LTM Adj. EBITDA (x) Debt / Capital (%) 700.0 652.5 30.0% 7.0 70.0% 66.1% 6.2 59.9% 600.0 26.6% 25.0% 6.0 60.0% 56.4% 56.7% 5.2 52.3% 500.0 436.0 4.9 20.1% 20.0% 5.0 50.0% 400.0
Slide 41: Kideco – Leading Coal Producer in Indonesia
Kideco – Leading Coal Producer in Indonesia • Third largest coal producer in Indonesia • Environmental friendly thermal coal with ultra-low sulphur of 0.1% and low ash of (2.1% to 4.9%) • Attractive location with well-built infrastructure, and integrated value chain within the group, allowing for st
Slide 42: Kideco's Financial Highlights
Kideco’s Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 600.0 500 469.4 527.8 450.3 2,000 1,802.2 492.1 1,633.0 500.0 1,574.2 400 1,600 400.0 1,247.8 1,249.5 300 1,200 300.0 248.5 208.2 200 155.4 800 200.0 180.0 177.2 138.3 400 100 100.0 0 0.0 0 2016 2017 2018
Slide 43: Kideco's Operational Highlights
Kideco’s Operational Highlights Cash Cost Breakdown Coal Production (mn ton) Coal Sales (mn ton) 45.0 Labor Others 45 Freight 1% 1% 34.0 34.3 33.0 34.9 5% O/H 32.1 32.0 34.1 33.0 32.5 31.5 8% 30.0 30 Material 8% Gov. 15.0 Royalty Contract 15 15% Mining + Rental 62% 0.0 0 2016 2017 2018 2019 2020 201
Slide 44: Kideco's Operational Highlights
Kideco’s Operational Highlights Quarter Data Yearly Data Summary P&L (US$mn) 4Q20 4Q19 YoY 3Q20 QoQ FY20 FY19 YoY Sales 330.9 379.8 -12.9% 255.3 29.6% 1249.5 1574.2 -20.6% Gross profit 47.5 48.2 -1.5% 15.9 198.9% 177.1 248.3 -28.7% Operating profit 37.2 39.2 -5.0% 9.1 307.3% 138.2 211.1 -34.5% Net i
Slide 45: Peer Comparison (9M20 Data)
Peer Comparison (9M20 Data) PRODUCTION ANNUAL (MT) STRIP RATIO (x) CASH COSTS ex Royalty (US$/t) 60 55 12 60 10.5 53 50 10 50 39 40 8 40 36 32 33 5.9 30 26 6 30 4.4 18 3.9 20 4 20 10 2 10 0 0 - ADRO INDY * PTBA ITMG PTBA ADRO INDY * ITMG ADRO PTBA INDY * ITMG EBITDA MARGIN Domestic Sales/ Total (DMO
Slide 46: Petrosea's Financial Highlights (1)
Petrosea’s Financial Highlights (1) * Revenues (USD mn) Gross Profit (USD mn) Overburden Removal (mbcm) 600 100 140 81.1 121.1 123.5 500 465.7 476.4 80 73.1 74.9 105 97.6 94.4 400 340.7 60 313.5 300 45.7 70 57.3 209.4 40 34.9 200 35 20 100 0 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016
Slide 47: Petrosea's Financial Highlights (2)
Petrosea’s Financial Highlights (2) * Revenues Breakdown by Value FY20: USD340.7 mn FY19: USD476.4 mn Others Other 1.5% 0.6% POSB POSB KPI KPI 9.9% 7.0% 8.8% 10.6% E&C E&C 19.3% Contract 20.5% Contract Mining Mining 61.6% 60.2% * Cost Structure FY20: USD265.8 mn FY19: USD395.3 mn Amortization Materi
Slide 48: Tripatra's Financial Highlights (1)
Tripatra’s Financial Highlights (1) Revenue (USD mn) Gross Profit (USD mn) Net Profit* (USD mn) 500 462.3 60 45 45.0 35 45 41.7 25.8 28.4 37.5 22.8 34.2 25 375 16.9 299.4 30 15 274.8 278.3 15 5 250 217.5 -5 2016 2017 2018 2019 2020 0 -15 2016 2017 2018 2019 2020 125 -15 -25 -35 -30 0 -45 -31.7 -43.5
Slide 49: Tripatra's Financial Highlights (2)
Tripatra’s Financial Highlights (2) * Revenues Breakdown by Value FY20: USD299.4mn FY19: USD462.3mn TPE TPE 7.9% 8.0% TPEC TPEC 92.1% 92.0% Cost Structure FY20 USD331.1 mn FY19: USD424.8 mn Material 3.5% Material Others Others 16.3% 33.7% 28.1% Sub Sub Contractors Contractors 48.6% Rental 35.2% Rent
Slide 50: MBSS' Financial Highlights (1)
MBSS’ Financial Highlights (1) * Revenues (USD mn) Gross Profit (USD mn) EBITDA (USD mn) 100.0 20 30 27.7 18.4 25 24.0 75.4 77.8 16 75.0 65.8 68.5 20 18.4 54.9 12 14.8 14.8 50.0 15 8 10 4.9 25.0 3.9 4 2.5 5 0.9 - 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Net Prof
Slide 51: MBSS' Financial Highlights (2)
MBSS’ Financial Highlights (2) * Revenues Breakdown FY20 USD54.9mn FY19: USD77.8mn FC FC 31% 27% Barging Barging 69% 73% *Cost Structure 9M20: USD51.0 mn FY19: USD59.4mn Insurance 3% Others Insurance Others 10% 2.1% 15.3% Spareparts 13% Spareparts Depreciation 8.4% Depreciation 42% 33.9% Port charge
Slide 52: Indika Resources' Financial Highlights
Indika Resources’ Financial Highlights Revenues (USD mn) Cost of Good Sold (USD mn) Gross Profit (USD mn) 450.0 400.0 395.6 359.4 40.0 36.2 400.0 350.0 306.5 300.8 35.0 350.0 319.8 322.1 300.0 30.0 300.0 250.0 25.0 22.6 250.0 209.3 21.3 216.7 190.5 200.0 167.9 20.0 200.0 150.0 15.0 13.3 150.0 100.0
Slide 53: Indika Resources' Financial Highlights (2)
Indika Resources’ Financial Highlights (2) * Revenues Breakdown FY20: USD155.0 mn FY19: USD245.7 mn MUTU MUTU 40.5% 38.8% Coal Coal Trading Trading 59.5% 61.2% MUTU ASP (USD/ton) * MUTU Cash Cost ex Royalty (USD/ton) 100 120.0 87.6 110.5 78.3 76.3 80 100.0 66.5 60.1 80.0 60 62.2 61.3 60.0 53.2 40 46
Slide 54: Notes Outstanding
Notes Outstanding Ba 3 Negative Outlook (as of Oct. 2020) The Senior BB - / Negative Outlook Notes are rated: International Ratings (as of Oct 2020) A + / Negative Outlook National Ratings (as of Oct 2020) Indo Energy Capital III Pte. Ltd. Indo Energy Capital IV Pte. Ltd. USD575.0 mn USD675.0 mn 5.8