PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — Investor Presentation (February 2016)
32 slides from PT Alamtri Resources Indonesia Tbk's investor presentation, February 2016
Slide 1: Delivering Positive Energy
Delivering Positive Energy February 2016
Slide 2: Disclaimer
2 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 contain
Slide 3: Adaro Energy Snapshot
Adaro Energy Snapshot adaro#
Slide 4: Adaro Energy Highlights
4 Adaro Energy Highlights • Among the largest single- 2013A: 52.3 Mt concession coal producers in Production 2014A: 56.2 Mt southern hemisphere 2015A: 51.5 Mt Sub-bituminous, medium calorific • Top 5 thermal coal exporter globally value, ultra-low pollutants Envirocoal Trademark registered
Slide 5: Journey in building our competitive advantage
Journey in building our competitive advantage • We have over 20 years experience of successful coal mining operations in Indonesia. In June 2005, our majority shareholders acquired Adaro through an LBO which entailed debt funding of US$923 million and equity of US$50 million. • Since the LBO we star
Slide 6: Our Reliable Coal Supply Chain
6 Our Reliable Coal Supply Chain Majority of Adaro's coal come from the deposits in South Kalimantan mined by AI. The physical mining and transporting of coal to customers is done by contractors appointed by AI. We tightly control this coal supply chain by using a subsidiary company at each stage as
Slide 7: Adaro's Operational and Financial Highlights
7 Adaro’s Operational and Financial Highlights OPERATIONAL FY 2015 FY 2014 % Change Production (Mt) 51.46 56.21 -8% Sales (Mt) 53.11 57.02 -7% OB removal (Mbcm) 266.97 319.09 -16% FINANCIAL (US$ millions, unless indicated) 9M 2015 9M 2014 % Change Net Revenue 2,112 2,507 -16% Core Earnings 228 290 -
Slide 8: Adaro Coal Production Guidance
8 Adaro Coal Production Guidance Production Volumes (Mt) 56.2 52.3 52 - 54 51.5 47.7 47.2 2011A 2012A 2013A 2014A 2015A 2016F • Production guidance for 2016 is 52 to 54 Mt, slight increase over 2015. • Persistent oversupply over the past few years has kept coal prices subdued. • We are taking contro
Slide 9: Diversified Customer Base with Long-term Contracts
9 Diversified Customer Base with Long-term Contracts Customer type by % volume (FY15) Geographical breakdown of customers (FY15) Others, 11% 10% Indonesia, Spain, 7% 21% Malaysia, 7% Power South Korea, 7% China, 16% Others Hong 89% Kong, 8% Japan, India, 14% 10% * Others include Taiwan, The Philippi
Slide 10: Proven Track Record of Production Growth
10 Proven Track Record of Production Growth 2016 2015 2014 Units Guidance Actual Actual Production volume Mt 52 - 54 51.5 56.2 60 350 AI – Tutupan Mt 41.97 43.53 AI – Paringin Mt 5.41 6.08 AI – Wara Mt 2.97 5.71 300 50 Semesta Centramas Mt 1.11 0.89 Planned strip ratio bcm/tonne 4.71 5.78 5.78 250 O
Slide 11: Cost Discipline While Maintaining Long Term Plan
11 Cost Discipline While Maintaining Long Term Plan Consolidated Planned Strip Ratio (bcm/t) • Our vertically integrated business model enables us to better control cost. 5.9 6.4 5.75 5.78 5.19 4.71 • We own or control each part of our coal supply chain. 2011A 2012A 2013A 2014A 2015A 2016F • Our inv
Slide 12: Cost control key to deliver strong performance
12 Cost control key to deliver strong performance Adaro’s Estimated Coal Cash Cost EBITDA Margin Breakdown (9M15) Fixed overhead, 5% Mining, 39.8% Coal 35% - 40% 34.6% processing, 10% 19.9% 18.7% 12.8% Freight & 7.4% handling, 20% ITMG Adaro Banpu PTBA Harum Shenhua Source: Bloomberg, based on trail
Slide 13: Solid profitability despite market downturn
13 Solid profitability despite market downturn Operational EBITDA (US$ billions) 1.5 1.1 0.9 0.8 0.55 – 0.88 0.45 – 0.7 2011A 2012A 2013A 2014A 2015F 2016F • Our low-cost operations enable us to maintain a solid Operational EBITDA margin despite falling coal price. • In 9M15, our Operational EBITDA
Slide 14: Thermal coal prices impacted by China market and chronic oversupply
Thermal coal prices impacted by China market and chronic oversupply US$/tonne RMB/tonne 100.00 700.00 90.00 600.00 80.00 70.00 500.00 60.00 50.00 400.00 40.00 30.00 300.00 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 Global Coal Newcastle QHD 5500 NAR • Seaborne thermal coal
Slide 15: Market Update – Prices in February 2016
15 Market Update – Prices in February 2016 Month-to-Date Year-to-Date 19 Feb 2016 Week-on-Week Month-on-Month Year-on-Year % YoY Average Average Bituminous (US$/Tonne) gCN 51.00 0.90 50.08 0.58 49.28 (16.65) -25% API2 42.36 (1.06) 43.54 (3.72) 45.28 (14.71) -25% API3 41.27 1.39 40.31 1.73 39.51 (14.
Slide 16: 2015: Falling coal cash cost supports production
2015: Falling coal cash cost supports production 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 cost in local currencies. Thus several coal producers are still able to
Slide 17: Investing in the three engines of growth
17 Investing in the three engines of growth Capital Expenditure (US$ millions) 625 490 185 165 75 - 125 75 - 100 2011A 2012A 2013A 2014A 2015F 2016F • Although we have reduced our capex spending, it is not at the expense of growth. • We made the investment in our mining asset, heavy equipment and in
Slide 18: Balangan acquisition
18 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 lo
Slide 19: Long Term Global Thermal Coal Demand
19 Long Term Global Thermal Coal Demand • Global thermal coal markets will continue to be driven by electrification in the developing world, where scalable and economic alternatives are limited. Coal imports remain weak in the near-term but stronger post-2020. • India overtook China as largest coal
Slide 20: Coal remains important in global energy mix
Coal remains important in global energy mix Global electricity production by fuel type China thermal coal demand India energy mix and coal import 20
Slide 21: Fueling southeast asia's coal requirements
21 Fueling southeast asia’s coal requirements 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) Imports Source: WoodMackenzie
Slide 22: Our strategy to create sustainable value
22 Our strategy to create sustainable value Three engines of growth integrating pit-to-power Adaro Energy (AE) Coal Mining Logistics and Mining Services Power Assets Adaro Indonesia (AI) 100% Maritim Barito Perkasa 100% Saptaindra 100% Makmur Sejahtera 100% Coal mining, S Kalimantan (MBP) Sejati (SI
Slide 23: Adaro Energy Mining Assets
23 5 Adaro Energy Mining Assets 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 1 2 3 4 5 6 Adaro Indonesia: Balangan: MIP: 75% stake BEE: 61.04% BEP: 10.22% IMC: 25% joint Existing, South South Kalimantan South Sumatra s
Slide 24: Adaro Logistics and Mining Services
16 Adaro Logistics and Mining Services • Key part of our vertical integration. • Ensure 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 37% of Ada
Slide 25: Adaro Power
25 Adaro Power MSW’s 2x30 MW mine-mouth power plant in Tanjung, South Kalimantan
Slide 26: Strategy to build our power division
26 Strategy to build our power division • Commercially and financially attractive with solid IRR and low-cost long-term project financing. • Creates a new captive market and helps meet our DMO. • Helps to lessen volatility in Adaro’s business model. • Contributes to the development of our country’s
Slide 27: Existing Adaro Power's Project Pipelines
27 Existing Adaro Power’s Project Pipelines Bhimasena Power Tanjung Power East Kalimantan Power Indonesia Indonesia Project Capacity 2x1000 MW 2x100 MW 2x300 MW Stake Acquired 34% 65% 49% Partner(s) J-Power (34%) and Itochu (32%) Korea EWP (35%) Shenhua Overseas Location Central Java South Kalimanta
Slide 28: Thank You
28 Thank You Delivering Positive Energy This presentation is also available on http://www.adaro.com/investing/investor-presentations-and- events-calendar/
Slide 29: Appendix
Appendix • Profile of PT Maritim Barito Perkasa • Profile of PT Sarana Daya Mandiri • Profile of PT Saptaindra Sejati 29
Slide 30: PT Maritim Barito Perkasa (MBP)
30 PT Maritim Barito Perkasa (MBP) • 68 sets of tugs and barges used by Adaro with an average capacity of 12,522 dwt. • Offshore coal loading at Taboneo with capacity up to 165,000 tonnes/day – floating cranes (15,000t-20,000t/day), FTU (60,000t/day) and self-loading geared vessels. • FY14 coal tran
Slide 31: PT Sarana Daya Mandiri (SDM)
31 PT Sarana Daya Mandiri (SDM) • SDM dredged the Barito river channel in 2008, increasing capacity to 200Mt per year and now manages and maintains the channel. • Adaro owns 51.2% of SDM with the local port authority and local government owning the remaining interest.
Slide 32: PT Saptaindra Sejati (SIS)
32 PT Saptaindra Sejati (SIS) • One of Indonesia’s leading mining contractors. • FY14 overburden removal volume: 173.9Mbcm. • FY14 coal production volume: 30.3Mt. • FY14 EBITDA: $121 million.
PT Adaro Energy — Investor Presentation (February 2016) on 6ix