PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — Standard Chartered Earth's Resources Conference 2012
48 slides from PT Alamtri Resources Indonesia Tbk's conference presentation, Jun 20, 2012
Slide 1: Building a Bigger and Better Adaro Energy
Building a Bigger and Better Adaro Energy ------------------------------------------------------------- Standard Chartered Earth's Resources Conference in Hong Kong June 20 – 21, 2012
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: Recent Developments
Recent Developments HIGHLIGHTS ■ For first quarter, 2012, our net income increased 11.8% to US$122 million. EBITDA increased 21.3% to US$319 million and we maintained a robust EBITDA margin of 34.8%. ■ For 1Q 2012, we increased coal production volume 3.4% year over year to 10.96 million tonnes and i
Slide 4: 1Q 2012 Operational and Financial Highlights
Adaro Energy‟s 1Q 2012 Operational and Financial Highlights OPERATIONAL 1Q 2012 1Q 2011 % Change Production (Mt) 10.96 10.60 3.4% Sales (Mt) 11.25 10.91 3.1% OB removal (Mbcm) 69.54 65.28 6.5% FINANCIAL (US$ millions, unless 1Q 2012 1Q 2011 % Change otherwise indicated) Net revenue 916 757 21.0% Cos
Slide 5: Agenda
Agenda Adaro‟s Strategy Corporate Information Industry Outlook 4
Slide 6: Strategy – Creating Maximum, Sustainable Value
Strategy – Creating Maximum, Sustainable Value Strategy Action Plan Organic growth from Production ramp up and mine Majority of organic growth will come current reserve base planning from Wara mine Chip sealing of hauling road, Focus on improving Implementation of OPCC, Mine- dredging of channel etc
Slide 7: Strategy – Organic Growth
Strategy – Organic Growth Units 2012 2011 2010 Guidance Actual Actual Production volume Mt 50-53 47.7 42.2 E 5000 Tutupan Mt 40-41 41.3 39.2 E 5000 Paringin Mt 1-2 1.0 0.5 E 4000 Wara Mt 8-10 5.4 2.5 Strip ratio bcm/tonne 6.4 5.9 5.5 6
Slide 8: Strategy – Improving efficiency and cost control
Strategy – Improving efficiency and cost control Adaro has consistently initiated cost reduction projects over the years such as sealing the haul road, dredging the river channel, and using the Taboneo anchorage Project Reason Project Spend Completion Cost through Q411 Date Overburden Crusher Transp
Slide 9: Strategy – OPCC and Mine Mouth Power Plant
Strategy – OPCC and Mine Mouth Power Plant OPCC (Overburden Crushing and Conveying) ■ OPCC is to improve operational efficiency, reduce the use of diesel, lower overburden hauling costs via trucks, and allow overburden to be placed further distances from the mine. ■ The first unit will be installed
Slide 10: Strategy – Acquisition
Strategy – Acquisition Increase reserves, diversify location, maturity of licenses and product type Acquisition Price/ Date Location Asset License / Expected Ownership Expiry Operation IndoMet Coal (IMC) US$335m March Central Greenfield - CCoW TBA JV with BHP 25% 2010 Kalimantan coking coal NA Musti
Slide 11: Strategy – Bhakti Energi Persada
Strategy – Bhakti Energi Persada Bhakti Energi Persada (“BEP”) is owned by two of Adaro’s key shareholders; Persada Capital Investama and Triputra Investindo Arya. BEP has undeveloped, low grade (average 3,400 kcal/kg GAR) and large deposit (JORC certified coal resources of approximately 9 billi
Slide 12: Strategy – South Sumatra
Strategy – South Sumatra MIP JORC Compliant Coal Resources and Reserves (Millions of ROM Tonnes) Total Total Ash Sulfur Calorific Total Moisture % % Value (kcal/kg) Mt % (GAR) (GAR) (GAR) Resources 286.4 33.9 5.5 0.4 4,345 Reserves 272.6 34.1 6.0 0.4 4,281 The key advantages of our investments in So
Slide 13: Strategy – IndoMet Coal Project
Strategy – IndoMet Coal Project ■ IndoMet Coal Project (“IMC”) is an unique opportunity for Adaro to partner with a world class mining company in BHP Billiton to develop a metallurgical and energy coal deposit in seven Coal Contracts of Work (“CCoWs”) located in Central Kalimantan. ■ A phased approa
Slide 14: Strategy – Other Coal Acquisitions
Strategy – Other Coal Acquisitions ■ As part of our efforts to increase our reserves, Adaro Energy continues to look for potential acquisitions of coal deposits in Indonesia that play to our strength of developing in-land, greenfield coal deposits into operating mines. ■ The four provinces of focus
Slide 15: Group Operations and Coal Acquisitions
Group Operations and Coal Acquisitions 10.2% stake in BEP 25% JV with BHP, (E. Kalimantan IndoMet Coal project Sub-bituminous Coal) (Central Kalimantan Coking coal) Adaro Indonesia Resources – (Existing , S. Kalimantan 774 million tonnes Sub-bituminous Coal) Resources – 4.4 billion tonnes 75% stake
Slide 16: Abundant Resources and Scale
Abundant Resources and Scale 2011 Largest Producing Site Concession in Southern Reserves and Resources Comparison Hemisphere (Mt) 8000 47.7 7000 7,782 Resources Reserves 40.7 6000 32.0 31.6 7,290 21.4 19.8 17.4 5000 14.6 4000 3000 Kideco KPC Berau Indonesia Cerrejon Arutmin New Vaal American Indomin
Slide 17: Strategy – Downstream into Power
Strategy – Downstream into Power Diversify and provide predictable revenue stream Bhimasena Power Indonesia – Joint venture between Adaro (34%), J-Power (34%), Itochu (32%): – IPP project for a 2 x 1000MW power plant in Central Java – Project cost estimated at US$4 billion using ultra supercritica
Slide 18: Agenda
Agenda Adaro‟s Strategy Corporate Information Industry Outlook 17
Slide 19: Simplified structure
Creating Sustainable Value from Indonesian Coal Listed on IDX in July 2008 PIT TO POWER INTEGRATION Adaro Energy FY11: Revenue: US$3,987million PT Adaro Energy Tbk EBITDA: US$1,472million Adaro Adaro Alam Tri Abadi Logistics Marketing Simplified structure Adaro Mining Adaro Power Services 100% 2
Slide 20: 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 19 19
Slide 21: PT Adaro Indonesia - Mining
PT Adaro Indonesia - Mining Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Resources Measured Indicated Inferred Total (Mt) Wara Deposit (Mt) (Mt) (Mt) Tutupan 775 814 823 2,412 North 117 96 85 298 Paringin Wara 1 492 366 444 1,302 Wara 2 133 134 100 367 Tot
Slide 22: Dedicated Coal Hauling Road
Dedicated Coal Hauling Road 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 East Kalimantan C
Slide 23: Kelanis: One of the World's Largest Inland Bulk Terminals
Kelanis: One of the World‟s Largest Inland Bulk Terminals Coal Reserves Coal Mining Coal Hauling Coal Crushing Coal Barging Coal Loading Coal Port Crushing Capacity: - 7 crushers with total capacity of 7,500 tph - Annual capacity of 55 Mt Stockpiling Capacity: 2 stockpiles with capacity of 250,000t
Slide 24: PT Maritim Barito Perkasa – Barging
PT Maritim Barito Perkasa (“MBP”) – 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 Barging South Pul
Slide 25: PT Maritim Barito Perkasa – Ship Loading
PT Maritim Barito Perkasa (“MBP”) – Ship Loading 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 [FY11: Central Kalimantan Total Coal Loaded: Tanju
Slide 26: PT Indonesia Bulk Terminal – Coal Terminal Services
PT Indonesia Bulk Terminal (“IBT”) – 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 Terminal Banjarm
Slide 27: Benefit from the Fully Integrated Operations of AE
Benefit from the Fully Integrated Operations of AE Strategy is centred on improving control and efficiency of the supply chain Kelanis Strong control Crushing Plant, 55 Mt Hauling Road 80 km, 80 Mt Medium control Controlling stake held by the Group PT Adaro Indonesia Coal Concession Owner PT Maritim
Slide 28: Value Creation at the Subsidiary Level
Value Creation at the Subsidiary Level ■ Our very large scale means adding significant volume is more challenging than for smaller mines. As we grow, the vertical integration of our subsidiaries allows for better control of our coal supply chain and so we can continue to guarantee reliable supply fo
Slide 29: Operating Subsidiary – SIS
Operating Subsidiary – SIS Highlights ■ SIS started its commercial operation in April 2002 and is the 4th largest contractor in Indonesia. SIS provides a broad range of coal mining services including exploration, drilling, transportation and logistical support, overburden removal and coal mining ser
Slide 30: Operating Subsidiary – MBP
Operating Subsidiary – MBP Highlights ■ An Indonesian barging and ship loading company that used to be one of Adaro’s principal barging contractors and the largest of its three ship loading contractors. Following its purchase, Adaro is able to better control demurrage costs and more efficiently util
Slide 31: Exceptional Access to Capital
Exceptional Access to Capital ■ US$800 million 10 year, non call 5, Reg S/144A, Guaranteed Senior Notes – Currently rated at Ba1 and BB+ ■ US$400 million 7 year, concluded with 12 banks – Undrawn $100M ■ US$750 million 10 year bank loans club deals with key relationship banks – Undrawn $600M Large g
Slide 32: Consistently Improving Financial Profile
Consistently Improving Financial Profile Superior Access to Bank Loan and Bond Markets Adaro has a track record of no default, rescheduling of debts nor breaching its financial covenants LBO: Jun‟05 Dec‟05 Mar‟07 Dec‟07 Dec„08 Dec‟09 Dec‟10 Dec‟11 DSCR DSCR DSCR DSCR DSCR DSCR DSCR ~
Slide 33: Strong Operational Performance
Strong Operational Performance Versus Domestic and International Peers Adaro Indonesia is a leading player across key operational and financial metrics and achieves one of the highest EBITDA margins despite lower CV and significant financial flexibility 2011E Production Volumes (million tonne) Cash
Slide 34: Adaro Energy – Historical Cost Analysis
Adaro Energy – Historical Cost Analysis Coal Cash Cost and Strip Ratio¹ (US$/tonne) 40-45 36 31 27 27 4.5 5.0 5.5 5.9 6.4 ■ While costs have increased due to higher 2008A 2009A 2010A 2011A 2012F Strip Ratio Cash Cost strip ratios, overburden hauling distances Note: Cash cost includes mining cost, co
Slide 35: Adaro Energy: 2012 Guidance
Adaro Energy: 2012 Guidance Production Volumes (mt) Consolidated Strip Ratio 47.7 50-53 6.4 42.2 5.5 5.9 38.5 40.6 5.0 4.3 2008A 2009A 2010A 2011A 2012F 2008A 2009A 2010A 2011A 2012F Coal Cash Cost (US$/t) 40-45 31 36 27 27 2008A 2009A 2010A 2011A 2012F EBITDA (US$b) Capex 1.5 650 - 1.2-1.5 625 700
Slide 36: Diversified and Loyal Customer Base with Earnings Visibility
Diversified and Loyal Customer Base with Earnings Visibility Customer type by % volume (FY11) Geographical breakdown of customers (FY11) 100 10 4 80 60 Others 86 Cement 40 Power 20 0 1 Mostly sovereign backed power companies and more than 50% have relationship more than 10 years Exports to Asia Dome
Slide 37: CSR Commitment has been Recognised
CSR Commitment has been Recognised Two Platinum Category in Indonesian Corporate Social Responsibility Awards 2011 For free cataract eradication and clean water programs. Presented by Minister of Social Affairs of Republic of Indonesia. Indonesian Corporate Social Responsibility Award 2008 First ran
Slide 38: Safety and Environment
Safety and Environment ■ During 4Q11, there were 6 Lost Time Injuries (LTI’s) with a resultant Lost Time Injury Frequency Rate (LTIFR) of 0.42. ■ We strive to create a safe working environment for everyone to go home safe and healthy at the end each day. ■ Initiatives include the implementation of A
Slide 39: Reputable Shareholders and Strong Corporate Governance
Reputable Shareholders and Strong Corporate Governance Reputable and Supportive Shareholders Wide Recognition Across the Board Edwin Soeryadjaya Teddy Rachmat Top Performing Listed Companies 2010 by Investor Boy Garibaldi Thohir together hold Benny Subianto 63% Magazine Sandiaga Uno In
Slide 40: Experienced Management Team with Proven Track Record
Experienced Management Team with Proven Track Record Management Team with Proven Track Record Benefits from experience and active participation of key shareholders’ representatives More than 135 High operating and safety standards years of combined Combined 75 years Average 12 years industry wit
Slide 41: Agenda
Agenda Adaro‟s Strategy Corporate Information Industry Outlook 40
Slide 42: Robust Industry Fundamentals and Outlook
Robust Industry Fundamentals and Outlook Indonesia‟s Advantage in the Midst of Challenges in the Coal Mining Industry Potential challenges in the coal mining industry include government policies and regulations in most export markets such as: – South Africa: Export quota to satisfy Eskom domestic
Slide 43: Strong Demand for Low CV Coal
Robust Industry Fundamentals and Outlook Strong Demand for Low CV Coal Demand for Adaro Indonesia‟s Coal Specifications is Expected to Grow Strongly Million tonnes 140 Asia is expected to make up 76% of 120 total global sea-borne trade in 2021 100 and contribute 82% of the growth from 80 2010 to 2
Slide 44: Coal – Key source of generating electricity in Target Markets
Coal – Key source of generating electricity in Target Markets China India Indonesia Domestic Coal Consumption for Electricity Generation (Million Tons) Coal is forecasted to continue to be the key source of electricity production in China and India. China, India and the domestic markets are the
Slide 45: China's Production to Lag Demand
China‟s Production to Lag Demand Power consumption key driver for demand ■ The China Electricity Council forecasts 2015 electricity consumption to climb to 6.4 trillion kwh per year, an increase of ~8.8% per annum from 2011 levels. ■ By 2020, total capacity is expected to be 1,935GW, of which 1,170G
Slide 46: China and India continue to dominate increase in demand for coal
China and India continue to dominate increase in demand for coal for electricity generation Global Energy Demand by Fuel Global Electricity Output by Fuel Electricity Demand (Indexed to 2009) Coal is overtaking oil as the key contributor of Global Energy with the highest CAGR (except renewables, whi
Slide 47: Electricity Demand - India, Indonesia still have long way to catch up
Robust Industry Fundamentals and Outlook Electricity Demand - India, Indonesia still have long way to catch up….. Potential Growth in Electricity Consumption Canada Electricity Consumption (Kwh/Capita) US Asia Korea Asia Indonesia Japan France Russia Germany China Brazil WORLD Thailand India GDP/Cap
Slide 48: Thank you
Thank you 47
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