PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — Investor Presentation (September 2016)
29 slides from PT Alamtri Resources Indonesia Tbk's investor presentation, September 2016
Slide 1: Delivering Energy to Build the Nation
DELIVERING ENERGY TO BUILD THE NATION September 2016 www.adaro.com
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: China's Production Cut Has Supported Coal Price
China’s Production Cut Has Supported Coal Price 100.00 700.00 90.00 650.00 600.00 80.00 550.00 70.00 500.00 60.00 450.00 50.00 400.00 40.00 350.00 30.00 300.00 Mar-13 Dec-13 Mar-14 Dec-14 Mar-15 Dec-15 Mar-16 Apr-13 May-13 Oct-13 Apr-14 May-14 Apr-15 May-15 Oct-15 Apr-16 May-16 Jan-13 Jun-13 Aug-13
Slide 4: Outlook for Long-Term Coal Demand Remains Robust
Outlook for Long-Term Coal Demand Remains Robust Source: WoodMackenzie • Global thermal coal markets will continue to be driven by electrification in the developing world, where scalable and economic alternatives are limited. • Increased potential from Southeast Asia, North Asia and India. 4
Slide 5: Especially Demand from Southeast Asia
…Especially Demand from Southeast Asia Coal capacity additions in Southeast Asia Southeast Asia coal demand Total 600 Mt 73 Total 360 Mt 259 Total 97 214 Mt 80 132 268 78 131 56 2013 2020 2030 Domestic Consumption (Non-Indonesia) Domestic Consumption (Indonesia) Source: WoodMackenzie Energy Market S
Slide 6: Where Will the Supply Come From?
Where Will the Supply Come From? Seaborne coal supply by country (Mt) Source: WoodMackenzie • Along with the improvement of Indonesia’s domestic demand, its share in the seaborne market will fall. • Higher coal price is required to encourage production from Australia. 6
Slide 7: As Margins Become Tighter, Miners Continue to Cut Their Cost
As Margins Become Tighter, Miners Continue to Cut Their Cost… Seaborne thermal coal cash cost (CV adjusted) 2015 Cost change (%) Source: Wood Mackenzie, Dataset: November 2015, “Nominal terms” Cost reductions are more apparent for countries with costs in local currencies. Thus several coal producers
Slide 8: Indonesia Has to Prioritize Domestic Demand
With Significant Coal Projects in the Pipeline, Indonesia Has to Prioritize Domestic Demand Indonesia Coal Production and Coal Reserves (projected) 12,000 450 400 10,000 350 Coal Production (Mt) 8,000 300 Coal Reserves (Mt) 250 6,000 200 4,000 150 100 2,000 50 - - 2010 2015 2020 2025 2030 2035 2040
Slide 9: Snapshot of Adaro Energy
Snapshot of Adaro Energy 9
Slide 10: Who is Adaro Energy?
Who is Adaro Energy? • Among the largest single-concession coal 2013A: 52.3 Mt producers in the southern hemisphere Production 2014A: 56.2 Mt 2015A: 51.5 Mt • Top 5 thermal coal exporter globally Sub-bituminous, medium calorific value, • Major supplier to Indonesia’s domestic markets Enviroc
Slide 11: Operational and Financial Highlights
Operational and Financial Highlights OPERATIONAL 1H 2016 1H 2015 % Change Production (Mt) 25.86 25.88 0% Sales (Mt) 27.13 26.59 2% OB removal (Mbcm) 111.23 136.35 -18% FINANCIAL (US$ millions, unless indicated) 1H 2016 1H 2015 % Change Net Revenue 1,176 1,399 -16% Core Earnings 170 148 15% Operation
Slide 12: 2016 Guidance Remains Unchanged
2016 Guidance Remains Unchanged Coal Production (Mt) Consolidated Planned Strip Ratio (bcm/t) 56.2 7 6.3 52.3 52 - 54 5.6 5.7 5.2 51.5 4.71 47.7 47.2 2011A 2012A 2013A 2014A 2015A 2016F 2011A 2012A 2013A 2014A 2015A 2016F Coal Cash Cost (ex-royalty, US$/t) 36 39 35 33 28 26 - 28 2011A 2012A 2013A 20
Slide 13: Cost Control: Key in Delivering Strong Performance
Cost Control: Key in Delivering Strong Performance Adaro’s Estimated Coal Cash Cost Breakdown (1H16) Operational EBITDA Margin Fixed overhead, 5% Mining, Coal 35% - 40% processing, 10% Freight & handling, 20% Banpu ITMG Harum PTBA Adaro Shenhua Fuel, 25% - Source: Bloomberg, based on trailing 12M EB
Slide 14: Solid Balance Sheet and Strong Cash Generation
Solid Balance Sheet and Strong Cash Generation Net Debt Position and Leverage Ratio Cash and Free Cash Flow (million US$) 2,500 2.0 800 700 2,000 1.6 600 500 1,500 1.2 400 1,000 0.8 300 200 500 0.4 100 0 0.0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Net Debt (million US$) Net Debt to Equit
Slide 15: Creating Sustainable Value
Creating Sustainable Value Three engines of growth integrating pit-to-power Adaro Energy (AE) Coal Mining Assets Mining Services and Logistics Power Adaro Indonesia (AI) 100% Saptaindra Sejati (SIS) 100% Maritim Barito 100% Makmur Sejahtera Wisesa 100% Coal mining, S Kalimantan Coal mining and hauli
Slide 16: Adaro Coal Mining
Adaro Coal Mining 16
Slide 17: Deepening Coal Product Portfolio Across Indonesia
Deepening Coal Product Portfolio Across Indonesia 5 6 Adaro has 12 billion tonnes (Bt) of coal resources (including option to acquire 7.9 Bt) and 1.1 Bt of coal reserves. 1 2 3 4 Note: Reserves and 1 2 3 4 5 6 Resources numbers above are before Adaro Indonesia: Balangan: MIP: 75% stake BEE: 61.04% B
Slide 18: Diversified Customer Base
Diversified Customer Base Customer type by % volume (1H16) Geographical breakdown of customers (1H16) Others, 11% 10% Indonesia, Spain, 5% 24% South Korea, 7% Power Malaysia, 8% India, 16% Others Japan, 8% 89% China, Hong Kong, 8% 14% * Others include cement, pulp & paper, and industrial * Others in
Slide 19: Strong Production Track Record
Strong Production Track Record 60 350 2016 2015 2014 Units Guidance Actual Actual Production volume Mt 52 - 54 51.5 56.2 300 50 Strip ratio bcm/tonne 4.71 5.19 5.68 250 Overburden removal (Mbcm) 40 Production (Mt) 200 30 150 20 100 10 50 0 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 200
Slide 20: Our Reliable Coal Supply Chain
Our Reliable Coal Supply Chain Most of Adaro's coal come from the deposits in South Kalimantan mined by AI. The physical mining and transporting of coal to customers is done by contractors appointed by AI. We tightly control this coal supply chain by using a subsidiary company at each stage as one o
Slide 21: Adaro Metallurgical Coal Asset
Adaro Metallurgical Coal Asset Indomet Coal Project (IMC) in Central and East Kalimantan • On 6th June 2016, Adaro Energy entered into Share Sale Agreements with BHP companies with the purpose to purchase and assign all shares in 7 CCOW’s in Central and East Kalimantan • The transaction value was $1
Slide 22: Adaro Mining Services and Logistics
Adaro Mining Services and Logistics 22
Slide 23: Key to Operational Excellence
Key to Operational Excellence • Important part of our vertical integration. • Ensures operational excellence, productivity improvement and timely reliable delivery to customers. • We expect growing contribution from the non coal mining part of our business. • Non coal mining contributed 42% of Adaro
Slide 24: Highlights of Mining Services and Logistics
Highlights of Mining Services and Logistics Name Information PT Saptaindra Sejati (SIS) • One of Indonesia’s leading mining contractors. • Owns more than 1,500 heavy equipment. • FY15 overburden removal volume: 151.5 Mbcm. • FY15 coal production volume: 29.5 Mt. PT Maritim Barito Perkasa (MBP) • Bar
Slide 25: Adaro Power
Adaro Power MSW’s 2x30 MW mine- mouth power plant in Tanjung, South Kalimantan 25
Slide 26: Building Our Future through Adaro Power
Building Our Future through Adaro Power Indonesia's Additional Electricity Generation Capacity (MW) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Coal-fired 3,027 1,024 3,397 17,175 4,548 1,781 400 700 500 2,250 34,802 Others 1,113 3,463 9,041 4,223 1,325 1,184 2,416 3,698 7,918 11,357 45,
Slide 27: Central Java Power Project
Central Java Power Project Reached Financial Close and has Started Construction Bhimasena Power Indonesia Capacity 2x1000 MW Stake Acquired 34% Partner(s) J-Power (34%), Itochu (32%) Location Central Java • Signed 25 years PPA with PLN • Total Capex: US$4.2 billion Development Progress • Concluded f
Slide 28: Pipeline of Power Projects
Pipeline of Power Projects Diversify and secure predictable long-term coal demand Tanjung Power Indonesia East Kalimantan Power Project Capacity 2x100 MW 2x300 MW Stake Acquired 65% 49% Partner(s) Korea EWP (35%) Shenhua Overseas Location South Kalimantan East Kalimantan • Signed MoU between Adaro P
Slide 29: Thank You
THANK YOU www.adaro.com 29 This presentation is also available at www.adaro.com/investing/investor-presentations-and-events-calendar/
PT Adaro Energy — Investor Presentation (September 2016) on 6ix