PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — Investor Presentation (February 2015)
36 slides from PT Alamtri Resources Indonesia Tbk's investor presentation, February 2015
Slide 1: Delivering Positive Energy
Delivering Positive Energy February 2015
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 IV. Appendix 3
Slide 4: I. Corporate Information
I. Corporate Information 4
Slide 5: Adaro Energy Snapshot
Adaro Energy Snapshot • Among the largest single- 2012A: 47.2 Mt concession coal producers in Production 2013A: 52.3 Mt southern hemisphere 2014A: 56.2 Mt • Top 5 thermal coal exporter globally Sub-bituminous, medium calorific value, ultra-low pollutants Envirocoal • Major supplier to domest
Slide 6: Key Messages
Key Messages • We are on track to develop our power division to provide good returns, more stable and predictable cash flows, as well as create captive demand for our coal. • Current market conditions are challenging, however we are doing relatively well and are on track to deliver on our long-term
Slide 7: Resilient Business Model Creating Sustainable Value
Resilient Business Model Creating Sustainable Value Pit to Power Integration Adaro Energy (AE) Mining Assets Mining Services Logistics Power (ATA) Adaro Indonesia (AI) 100% Saptaindra 100% Maritim Barito Perkasa 100% Makmur Sejahtera 100% Coal mining, S Kalimantan Sejati (SIS) (MBP) Wisesa (MSW) Bal
Slide 8: Our Reliable Coal Supply Chain
Our Reliable Coal Supply Chain Majority of AE'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
Slide 9: Recent Performance: On Track
Recent Performance: On Track • We achieved production volume of 56.2 Mt • Liquidity and our Balance Sheet remain in FY14, 8% higher y-o-y. Our production strong with access to cash of US$1.6 volume was better than our full year billion as of 9M14. guidance of 54Mt to 56Mt. • Our sales volume was 57.
Slide 10: Adaro Energy 2015 Guidance
Adaro Energy 2015 Guidance Production Volumes (Mt) Consolidated Planned Strip Ratio (bcm/t) 52.3 56.2 56 - 58 47.7 47.2 42.2 5.9 6.4 5.5 5.75 5.78 5.33 2010A 2011A 2012A 2013A 2014A 2015F 2010A 2011A 2012A 2013A 2014A 2015F Coal Cash Cost (ex-royalty, US$/t) 36 39 34.86 35 - 38 32 31 - 33 2010A 2011
Slide 11: Diversified Customer Base with Long-term Contracts
Diversified Customer Base with Long-term Contracts Customer type by % volume (FY14) Geographical breakdown of customers in Mt (FY14) 15% Others, 10% Indonesia, 22% Malaysia, 6% 1% Hong Kong, Power 9% Cement Others Spain, 7% India, 15% 84% Korea, 9% China, 10% Japan, 12% * Others include pulp & paper
Slide 12: Exceptional Access to Capital
Exceptional Access to Capital Borrower Loan Type Year Secured Tenor Nominal Net Outstanding (in million USD) 9M14 (in million USD) AI and CTI Term & Revolver November 2007 8 years 750 112.5 AI Term October 2009 7 years 800 800 SIS Term & Revolver February 2011 7 years 400 329.5 MBP Term & Revolver M
Slide 13: II. Adaro's Strategy
ll. Adaro’s Strategy adaro# 8
Slide 14: 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 by moving reserve base chain and focus DIVERSIFY downstream into on cost control power generation • Organic growth in products, locations South Kalima
Slide 15: Proven Track Record of Production Growth
Proven Track Record of Production Growth 60 2015 2014 2013 450 Units Guidance Actual Actual 56.2 Production volume Mt 56 - 58 56.2 52.3 52.3 400 50 AI – Tutupan Mt 43.53 38.65 47.7 47.2 AI – Paringin Mt 6.08 5.74 350 AI – Wara Mt 5.71 7.87 42.2 319.1 Balangan Coal Mt 0.89 40.6 40 38.5 331.48 300 Pla
Slide 16: 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 Overburden Crusher Conveyor (OPCC) Transport 34 Mbcm of overburden annuall
Slide 17: Adaro Energy Mining Assets
5 Adaro Energy Mining Assets 6 12 billion tonnes of coal resources are attributable to Adaro across 6 locations and 20 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 18: Balangan Acquisition
Balangan Acquisition 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 172.3 31.9 1.9 0.08 4,436 • Purchased 75% for US$30.4 million enterprise value in 1Q13. • Strategically locat
Slide 19: Deepen Integration by Moving into Power
Deepen Integration by Moving into Power Bhimasena Power 2 x 1000 MW South Kalimantan 2 x 100 MW Stake Acquired 34% 65% Partner(s) J-Power (34%) and Itochu (32%) Korea EWP (35%) Location Central Java South Kalimantan • Commercially and financially attractive with solid IRR and low-cost long-term proj
Slide 20: III. Industry Outlook
Ill. Industry Outlook adaro# *
Slide 21: Key Themes
Key Themes • The market in 2015 is expected to remain oversupply. However, the balance is expected to be smaller than last year. • Imported coal demand from China is forecasted to remain low during 2015 following limit share of coal in primary energy, energy intensity cut and cap electricity consump
Slide 22: Trend of Thermal Coal Prices in 2014
Trend of Thermal Coal Prices in 2014 Chinese regulator (NDRC) requested big utilities to Implementation of 6% cut imports by 50% thermal import tax Average 2014 ∆ Year-on-Year Highlights: Bituminous (US$/Tonne) • Indonesian coal prices (ICI3) held up against other gCN 70.95 (14.32) indices in the Pa
Slide 23: The 2014 Market: Supply & Demand Balance
The 2014 Market: Supply & Demand Balance DEMAND (in Million Tonnes) 2013 Y-O-Y Δ 2014E DEMAND China 250 (23) 227 Japan 133 1 134 • China: strong hydro in the third quarter and increased market India 136 27 163 share of domestic coals caused substantial drop of import South Korea 104 1 105 demand by
Slide 24: Global Cost Curve
Global Cost Curve Distribution of 2014 Seaborne Thermal Coal Cash Cost for Global Seaborne Thermal Coal Supply (2014) Supply Curve by Quartiles Country 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Total Indonesia 48% 72% 33% 15% 42% Australia 11% 10% 32% 35% 22% Russia 0% 0% 17% 25% 11% Colom
Slide 25: View of 2015 Market: Supply & Demand Balance
View of 2015 Market: Supply & Demand Balance DEMAND (in Million Tonnes) 2014E Y-O-Y Δ 2015E DEMAND China 227 (25) 202 • China: Chinese policy framework of 12th five-year plan (2011 Japan 134 1 135 – 2015) advises that energy intensity to be cut by 16% in the India 163 12 175 period 2011 – 2015, tota
Slide 26: Market Update – Prices in January 2015
Market Update – Prices in January 2015 30-Jan-15 31-Jan-14 % Change Jan-15 % Month-on-Month % Year-on-Year Bituminous (US$/Tonne) gCN 66.15 80.01 -17% 62.80 -1% -24% API2 56.96 82.19 -31% 58.95 -17% -29% API4 60.24 80.20 -25% 60.69 -8% -27% Aus Off-Spec (Platts) 54.00 68.00 -21% 52.95 -1% -23% Sub-B
Slide 27: Regulatory Environment
Regulatory Environment Indonesia New Payment Regulation • Issue: The export of certain goods, including coal, required to use letter of credit. The regulation will be fully in force as from April 1, 2015. • Impact to Adaro: Neutral to Negative Chinese New Coal Quality Control • Issue: All coal impor
Slide 28: Thank You
Thank You Delivering Positive Energy 28
Slide 29: IV. Appendix
IV. Appendix tae adaro# 29
Slide 30: Adaro's Operational and Financial Highlights
Adaro’s Operational and Financial Highlights OPERATIONAL FY 2014 FY 2013 % Change Production (Mt) 56.2 52.3 8% Sales (Mt) 57.0 53.5 7% OB removal (Mbcm) 319.1 294.9 8% FINANCIAL (US$ millions, unless indicated) 9M 2014 9M 2013 % Change Net Revenue 2,507 2,435 3% Cost of Revenue (1,921) (1,902) 1% Gr
Slide 31: Supply Chain Vertical Integration
Supply Chain Vertical Integration Coal Mining Coal Hauling • Adaro Indonesia (AI) produced 56.2 Mt • 80km private paved haul road in 2014 from a single Coal Cooperation improved operational efficiency. Agreement (CCA) area in S Kalimantan. • 900 Mt of Reserves and 4.9 Bt of • More than 350 units of
Slide 32: Supply Chain Vertical Integration
Supply Chain Vertical Integration Coal Processing & Barge Loading Barging At Kelanis river terminal: • Supported by our subsidiary, • Completed the first stage of expansion in PT Maritim Barito Perkasa (MBP). 2013 (increase throughput capacity to 60Mt per year). The second stage of • 55 sets of tugs
Slide 33: 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: floating capacity to 200 Mt per year and now cranes (15,000-20,000t/day), FTU manag
Slide 34: Corporate Milestones: Pre-LBO, LBO to Growth
Corporate Milestones: Pre-LBO, LBO to Growth Pre LBO LBO Growth 1982-2002 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1982: Coal Cooperation Infrastructure First ratings upgrade First venture out of Sole qualified Completed $1b Agreement signed developments by Moody’s to Ba2 South
Slide 35: Adaro Group – Journey from LBO
Adaro Group – Journey from LBO LBO (Jun '05) 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue (US$m) - 951 1,383 1,512 1,869 2,591 2,718 3,987 3,722 3,285 EBITDA (US$m) 175 202 254 262 506 1,067 883 1,474 1,101 822 EBITDA Margin (%) - 21.2% 18.4% 17.4% 27.1% 41.2% 32.5% 37.0% 29.6% 25% Net Debt
Slide 36: 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 60+ years at Adaro Energy together • Boy Garibaldi Thohir hold 64% • B
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