PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — Adaro Energy — BNP Paribas ASEAN Conference, Commodities & Infrastructure Day 2011
41 slides from PT Alamtri Resources Indonesia Tbk's conference presentation, Jan 18, 2011
Slide 1: On Track to Build a Bigger and Better Adaro Energy
Adaro Energy On Track to Build a Bigger and Better Adaro Energy BNP Paribas ASEAN Conference Commodities & Infrastructure Day January 18th, 2011 Singapore 0
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: Key Messages
Key Messages Our 3Q10 and 9M10 results were adversely affected by unusually heavy rainfall. While the returns can be great, coal mining can also be a risky, long term, capital intensive and long term sector. Despite this short term volatility, we remain positive on our longer term growth plans, driv
Slide 4: Quick Updates
Quick Updates The volume of rain at the Tutupan pit averaged 238 mm per month, which was over 2.5 times more than the 5 year average for the third quarter. The average number of rain days per month of 15 days was more than double the five year average. Although our 2010 full year target remains 45 m
Slide 5: 3Q10 & 9M10 Operational and Financial Results
Quick Update 3Q10 & 9M10 Operational and Financial Results Units 3Q10 3Q09 % change Production MT 10.22 10.48 -2% Sales MT 10.61 11.15 -5% Units 9M10 9M09 % change Production MT 31.84 28.47 12% Sales MT 32.36 28.98 12% In Rp Bn In US$ Mn 9M10 9M09 % change 9M10 9M09 % change Net Revenue 18,075 20,01
Slide 6: Adaro Energy at a Glance
Company Adaro Energy at a Glance Overview Production/Sales 50Mt capacity 40.6Mt production in 2009 (38.5Mt in 2008) 10 Years CAGR of 11.6% Envirocoal Sub bituminous, moderate CV, high moisture ultra-low sulfur, ash and NoX emissions Customers Substantially all customers are blue-chip power utilities
Slide 7: Simplified structure
Operating Subsidiaries to Increase Value Creation PIT TO PORT INTEGRATION Listed on IDX in July 2008 PT Adaro Energy Tbk Adaro Energy 9M10: Revenue: Rp18,075 billion EBITDA: Rp6,400 billion 100% Alam Tri Abadi Adaro Indonesia 9M10: Revenue: Rp16,378 billion EBITDA: Rp5,311 billion Simplified structu
Slide 8: PT Adaro Indonesia
Balikpapan East Kalimantan Central Kalimantan Tanjung Kelanis Barge River Terminal PT Adaro Indonesia Banjarmasin South Kalimantan Taboneo Anchorage Domestic and Direct Barging South Pulau Laut Coal Terminal Coal and Fuel Storage Handling Port 7 7
Slide 9: PT Adaro Indonesia - Mining Overview
Company PT Adaro Indonesia - Mining Overview Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Tutupan Deposit Wara Deposit Reserves (Mt) Proven Probable Total Deposit: Tutupan 418 167 585 Wara 212 92 304 Total 630 259 889 8 8
Slide 10: PT Saptaindra Sejati (SIS) – Mining Contracting
Company PT Saptaindra Sejati (“SIS”) – Mining Contracting Overview Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port 9 9
Slide 11: Coal loaded on trailers from run-of-mine stockpiles
Company Coal is loaded on the trailer by backhoes Overview or wheel-loaders from run-of-mine stockpiles 9M10 Contractors: PAMA 38% SIS 29% BUMA 18% RAJ 13% RMI 2% 10 10
Slide 12: Dedicated Coal Hauling Road
Company Dedicated Coal Hauling Road Overview Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Hauling Equipment Capacity: 60 million tonnes Hauling Road Capacity: 80 million tonnes Hauling Road Distance: 80 km Hauling Road Vehicles: 200 road trains Balikpapan
Slide 13: Kelanis: One of World's Largest Inland Bulk Terminals
Kelanis: One of World’s Largest Inland Company Overview Bulk Terminals Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Crushing Capacity: - 6 crushers with total capacity of 7,500 tph - Recent installation of additional crushing system increased capacity to 5
Slide 14: PT Maritim Barito Perkasa (MBP) – Barging
PT Maritim Barito Perkasa (“MBP”) – Company Overview Barging Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Balikpapan East Kalimantan Central Kalimantan Tanjung Kelanis Barge River Terminal Banjarmasin South Kalimantan Taboneo Anchorage Domestic and Direct
Slide 15: PT Sarana Daya Mandiri (SDM) – Dredging/Water Tolling
PT Sarana Daya Mandiri (“SDM”) – Company Overview Dredging/Water Tolling Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Adaro’s Innovative Solution to River Bottleneck: - Adaro formed a joint venture, SDM, with central government port authority and South Kal
Slide 16: Capacity of the Barito River has increased to 200mt per year
Capacity of the Barito River has increased Company Overview to 200mt per year Barges waiting at crossing from old channel Five barges towing Adaro Indonesia’s coal passing through new channel Capacity : 200 Mt per annum (old 60 Mt) Length : 15,000 m (old channel:14,000 m) Base width : 138 m (old: 60
Slide 17: PT Maritime Barito Perkasa (MBP) – Shiploading
PT Maritime Barito Perkasa (“MBP”) – Company Overview Shiploading Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Vessels with their own gear and grabs at the Taboneo anchorage MBP’s floating cranes Balikpapan East Kalimantan Central Kalimantan Tanjung Kelani
Slide 18: PT Indonesia Bulk Terminal (IBT) – Coal Terminal Services
PT Indonesia Bulk Terminal (“IBT”) – Company Overview Coal Terminal Services Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Shell’s fuel terminal recently constructed at IBT’s facility Balikpapan East Kalimantan Central Kalimantan Tanjung Kelanis Barge River
Slide 19: Vertically Integrated from Pit to Port
Company Vertically Integrated from Pit to Port Overview Strategy is centered on improving control and efficiency of the supply chain Kelanis River Terminal, Hauling Road 80 km, 60 Mt Strong control Crushing Plant, 55 Mt Medium control Controlling stake held by the Group PT Adaro Indonesia Coal Conce
Slide 20: Key Investment Highlights
Key Investment Highlights 1 Robust industry prospects 2 Good track record of growth, large reserves to support continued growth 3 Among the world’s largest and lowest cost, vertically integrated producers 4 Highly differentiated product – EnvirocoalTM 5 Diversified and loyal customer base and high e
Slide 21: Robust Industry Prospects: 2010 General Outlook
1 Robust Industry Prospects Key Investment Highlights 2010 General Outlook • Surging thermal coal imports into China, strong Indian demand, forecast power generating capacity increases in Vietnam, Indonesia and other parts of Asia project a strong demand for thermal coal in the foreseeable future. •
Slide 22: Robust Industry Prospects: Global Energy Scenario
1 Robust Industry Prospects Key Investment Highlights Global Energy Scenario International Energy Agency forecasts: By 2030 world primary energy demand 40% higher than in 2007; Collectively, non-OECD countries account for over 93% of the increase, their share of global primary energy demand rising f
Slide 23: Global Energy Scenario (cont'd)
1 Robust Industry Prospects Key Investment Highlights Global Energy Scenario (cont’d) Changes in Primary Energy Demand (2007-2030) in Mtoe Fuel sources for incremental Global Demand for Electricity (2007- 2030) in TWh Others 8000 7000 Biomass 6000 Hydro 5000 OECD 4000 Nuclear Non-OECD 3000 Gas 2000
Slide 24: 2010 General Outlook: Coal Prices
1 Robust Industry Prospects Key Investment Highlights 2010 General Outlook (cont’d) 2002 2003 2004 2005 2006 2007 2008 2009 2010 Richards Bay FOB Average 25.59 30.73 54.34 46.21 50.85 62.77 120.63 64.38 85.61 Newcastle FOB Average 25.27 26.30 53.90 47.35 49.03 65.98 128.83 71.89 94.75 US$/tonne Sour
Slide 25: China's role in demand for fossil fuels
1 Robust Industry Prospects Key Investment Highlights China’s role in demand for fossil fuels Sharp increase in consumption of energy in China in the last R/P Oil Gas Coal decade has set a growth momentum for the Energy sector (in years) 10.00% 9.00% 8.00% 7.00% Global 45.7 62.8 119.0 6.00% 5.00% 4.
Slide 26: China's urban population to reach one billion
1 Robust Industry Prospects Key Investment Highlights China’s urban population to reach one billion 25
Slide 27: Steel intensity per capita grows with industrialisation
Key Investment 1 Robust Industry Prospects Highlights Steel intensity per capita grows strongly as a nation industrialises and urbanises 26
Slide 28: Electricity and Coal
1 Robust Industry Prospect Key Investment Highlights Electricity and Coal Electricity Consumption vs GDP/Capita Source of Energy for Electricity (in Quadrillion Btu) India China World 2007 2035 2007 2035 2007 2035 18,000 Liquids 0.2 0.2 0.5 0.5 10.2 8.7 Natural Gas 0.6 1.8 0.5 1.2 37.3 57.8 16,000 C
Slide 29: Cost efficient sources of Energy
1 Robust Industry Prospects Key Investment Highlights Cost efficient sources of Energy Cost of Generating Electricity – Cents/Kwh Gas Wind Gas Coal High Low Coal Nuclear Nuclear 0 5 10 15 0 2 4 6 8 10 Source – Update of the MIT 2003 Future of Nuclear Power Study (2009) Source- International Energy A
Slide 30: Outlook: Indonesia Possess Geographical Advantage
1 Outlook Indonesia Possess Geographical Advantage Current spot price (US$) 99.2 China import arbitrage Freight (US$) Chinese VAT (17%) 21.0 20.4 vs Australian coal Chinese Import price (US$) Chinese import price (Rmb) 140.6 955.9 doesn’t existL Current QHD spot price (Rmb) - 5,500 Kcal NAR 755.0 Ca
Slide 31: Indonesia Possess Geographical Advantage (cont'd)
1 Outlook Indonesia Possess Geographical Advantage (cont’d) Round Trip Distances in Nautical Miles 10440 Mumbai 5885 11238 Discharge Ports 9590 Ennore 5048 11239 7826 Shanghai 4598 14121 7804 Pusan 4806 14403 0 2000 4000 6000 8000 10000 12000 14000 16000 Richards Bay Balikpapan Abbot Point Indonesia
Slide 32: Track Record of Production Growth Continues
2 Track Record of Production Growth ContinuesL Key Investment Highlights CAGR of 11% since LBO Another Record Breaking Year – Adaro’s production crosses 40 million ton mark 2005 - 09 CAGR: 11% Bali Bomb Tsunami Start of US Financial Crisis LBO of Adaro 45 40.6 40 38.5 36.1 34.4 35 30 Law 41 on Start
Slide 33: Large Reserve Base
Key Investment 2 Large Reserve Base Highlights Reserves and resources evolution Adaro Indonesia’s reserves growth (Mt) (Mt) 3,483 3,483 2,803 +618 889 2,841 3,483 3,483 448 (177) 2,368 2,803 2,841 1,920 2005 2005-09 Addition 2009 Production 938 930 889 448 414 2005 2006 2007 2008 2009 Reserves Resou
Slide 34: Among the World's Largest Producers
Among the World’s Largest ProducersL Global top 5 thermal coal exporters (2009) (% market share) 8.7% 7.8% 4.7% 4.7% 4.4% Xstrata BUMI Anglo American Adaro Indonesia BHP Source: Company filings, ICP Estimates Indonesian top 5 domestic suppliers (2009) (% market share) 20.2% 16.1% 11.8% 8.7% 7.2% Ada
Slide 35: Among Lowest Cost Integrated Producers
Key Investment 3 Among Lowest Cost Integrated Producers Highlights Low Cost Producer Mine characteristics, operating strategy and location enable Adaro to produce coal at attractive cash cost levels. 2005 2006 2007 2008 2009 Stripping Ratio 3.3 3.57 4.25 4.25 5 Adaro Energy’s Cash Cost (ex. Royalty)
Slide 36: Cost Reduction Initiatives
Key Investment 3 Cost Reduction Initiatives Highlights Control of a part of each critical part of the coal supply chain Control of barging and ship loading company will help manage shipments better and minimize demurrage costs Centralized fuel procurement and selective fuel price hedging to help con
Slide 37: Highly Differentiated Product – Envirocoal
Key Investment 4 Highly Differentiated Product – EnvirocoalTM Highlights Coal 25 brands within global export trade Lowest ash content among coals produced for global export trade, providing consumers with significant cost savings 20 ASH % (adb) Ash 15 Content Blending Envirocoal with higher ash coal
Slide 38: Global Leader in Growing International Market of 'Environmental Coal'
5 Global Leader in Growing International Key Investment Highlights Market of ‘Environmental Coal’ Around 80% of customers by volume in FY09 were power generation companies Spain United Kingdom Japan Puentes and Meirama power Sales to power plants switching to Allows power stations to save stations c
Slide 39: Diversified and Loyal Customer Base and High Earnings Visibility
5 Diversified and Loyal Customer Base and Key Investment Highlights High Earnings Visibility Customer type by volume (FY09) Loyal long term customers 13% Pow er generation – Substantially all have relationship of 7% Cement > 5 years Other – ~50% have relationship of > 9 years Average length of coal
Slide 40: Building a Trusting Relationship
Building a Trusting Relationship We hope you will contact our IR department after this meeting to begin an ongoing dialogue towards building an understanding of how we are building a bigger and better Adaro Energy. For more information please contact our Head of IR, Cameron Tough at: cameron.tough@p
Slide 41: Thank you
Thank you 40
Adaro Energy — BNP Paribas ASEAN Conference, Commodities & Infrastructure Day 2011 on 6ix