36 slides from Pt Indo Tambangraya Megah Tbk's earnings presentation, Feb 26, 2018
Slide 1: Analyst Briefing 4Q17 & FY17 Performance Results
PT Indo Tambangraya Megah Tbk Analyst Briefing 4Q17 & FY17 Performance Results Jakarta, 26 February 2018 1
Slide 2: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2
Slide 3: Highlights of 4Q17 and FY17 results
Highlights of 4Q17 and FY17 results Coal sales Coal sales 6.5 Mt 23.1 Mt Up 0.9 Mt Down 3.7 Mt +17% Q-Q -14% Y-Y Unit: US$ million 3Q17 4Q17 Q-Q FY16 FY17 y-y Total Revenue 415 526 +27% 1,367 1,690 +24% Gross Profit Margin 32% 30% -2% 24% 30% +6% EBIT 107 121 +13% 205 388 +89% EBITDA 123 137 +12% 26
Slide 4: 2017 in review
2017 in review $448M EBITDA (+66%) RESERVES UP 39% HIGHER PRODUCTION $253M NPAT (+93%) SELLING PRICE HELD UP WELL Despite challenges, ITM Gross increase in Tight supply pushed 22.1 Mt production still recorded increase reserves by 77Mt price to $104/t in 4Q17. despite heavy rainfall in EBITDA and ne
Slide 5: Awards and achievements in 2017
Awards and achievements in 2017 Community Runner-up for 2016 The Best Runner-up Best Indonesian Best CG for non- Development Annual Report for Best Open-Pit Listed Companies finance category Programs Awards Award Coal Mining From Anugerah From Indonesian Obtain Platinum, From Otoritas jasa Indominco
Slide 6: Strategies: 2018 and beyond
Strategies: 2018 and beyond CONTRACT MINING COAL TRADING Growing internal contribution Blending for value-added PT TRUST US$40 M capex Targeting 2.5 Mt in 2018 to improve fleet Ramp up capacity to reach productivity in 2018 5 Mtpa by 2020 Further study to increase Synergy with Banpu to cap
Slide 7: Additional reserves through organic expansion
Additional reserves through organic expansion Unit: Mt Coal reserves increased by 77 Mt, to 275 Mt +39% 275 (22) 253 +48 198 +29 2016 Exploration Economics 2017 - Gross 2017 Sales 2017 - Net 7
Slide 8: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 8
Slide 9: 2017 operational review
2017 operational review INDOMINCO • Indominco production volume 13.0 Mt in 2017 despite heavy rainfall at mine area • Rationalized capex spending by 86% in 2017 • Indominco achieved Zero Accident Award from East Kalimantan TD. MAYANG Governor on Mar 2017 INDOMINCO • Indominco achieved 1st Runner-up
Slide 10: Operational summary 2017-2018
Operational summary 2017-2018 2017 OUTPUT : 22.1 Mt 2018 TARGET : 22.5 Mt COMMENTS East 4Q17 total output was lower than target due to Kalimantan heavy rainfall at Indominco and Melak area Higher output target in 2018 as compared to 2017 13.0113.1 INDOMINCO 1Q18 production target lower YoY due
Slide 11: Rainfall 2012 - 2017
Rainfall 2012 - 2017 INDOMINCO TRUBAINDO & BHARINTO Average 2017 rainfall Unit: Millimeter Unit: Millimeter levels at most mines 800 800 reached highest levels in 6 700 700 600 600 years since 2010, with 500 500 June –November’s level up 400 400 300 300 steeply 200 200 100 100 Trubaindo & Bharin
Slide 12: Indominco Mandiri
Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2018 target: 13.1 Mt 4Q17 production was slightly lower than target due to Operations rainfall affecting the mine production Ports Pre-stripping activities in 1Q18 as a result of Hauling optimized coal reserves at pit area Stockpile West Block ROM Cr
Slide 13: Melak group – Trubaindo and Bharinto
Melak group – Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2018 target: TCM 4.6 Mt Trubaindo: Mahakam BEK 2.7 Mt River 4Q17 production lower than target due to weather Bunyut condition at Trubaindo area Port Continue hauling road improvement program from Product coal conveyor, Trubaindo
Slide 14: Kitadin Embalut and Tandung Mayang
Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2018 target: EMB 1.0 Mt Kitadin Embalut: 4Q17 production achieved according to target TD. Mayang Further study to optimize coal reserves Bontang city IMM WB IMM EB Kitadin Td.Mayang: Continue mine closure activities including R
Slide 15: Jorong
Jorong SCHEMATIC QUARTERLY UPDATES 2017 target: 1.1 Mt 4Q17 production achieved according to target Remaining mine reserves will be depleted by 2019 and mine closure plan approved by Pelaihari government. QUARTERLY OUTPUT Unit: Mt Haul road 0.3 0.3 0.2 0.2 0.2 20km 1Q17 2Q17 3Q17 4Q17 1Q18e Unit
Slide 16: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 16
Slide 17: Global demand trends: 2017 vs 2016
Global demand trends: 2017 vs 2016 CHANGE GEOGRAPHY COMMENTS 2017-16 (Mt.) Strong winter demand and gas shortages boosted coal consumptions CHINA Tighter supply drives coal prices rally. +17 Temporary lifted coal import ban support imports. Decline in hydro and nuclear power generation lifte
Slide 18: Global supply trends: 2017 vs 2016
Global supply trends: 2017 vs 2016 CHANGE GEOGRAPHY COMMENTS 2017-16 (Mt.) Substantial growth despite heavy rainfall almost the whole year. INDONESIA +21 Slower domestic demand growth supported export. Strikes continued tighten supply in Q4-2017 AUSTRALIA 0 Bad weather and rail maintenance i
Slide 19: China: demand up, supply constrained, drives prices
China: demand up, supply constrained, drives prices CHINA THERMAL COAL IMPORTS/EXPORTS* Stably growing economy, cold temperature and Unit: Mt gas shortages pushed up thermal coal demand. QUARTERLY (ANNUALIZED) ANNUAL Domestic supply recovered slowly due to ongoing safety inspection. Railway bo
Slide 20: India: domestic supply issues driving coal imports
India: domestic supply issues driving coal imports INDIA THERMAL COAL IMPORTS* Coal shortages restricted operations of 12 GW Unit: Mt coal-fired capacity in Q4-2017. A steep decline in power plant stocks forced QUARTERLY (ANNUALIZED) ANNUAL utilities to reduce generation, leading to unscheduled
Slide 21: ITM coal sales FY17
ITM coal sales FY17 COAL SALES BREAKDOWN BY DESTINATION COAL SALES FY17 5.3 Mt Others Hongkong 4.2 Mt Italy Taiwan 1.8 Mt 1%3% 2% Philippines 4% Japan 7% 23% 0.4 Mt 2.7 Mt KOREA ITALY Korea 2.6 Mt 0.3 Mt 8% 0.9 Mt HK JAPAN CHINA 1.5 TAIWAN 1.7 Mt India 2.5 Mt China 11% 18% THAILAND INDIA Indonesia P
Slide 22: Indicative coal sales 2018
Indicative coal sales 2018 COAL SALES CONTRACT AND PRICING STATUS Contract Status Price Status Fixed 11% Unpriced Uncontracted 4% 47% 53% Unsold 47% Contracted 38% Indexed Contracted TARGET SALES 2018: 25.0 Mt 22
Slide 23: ITM ASP vs benchmark prices
Banpu ASPs vs thermal coal benchmark prices ITM ASP VS BENCHMARK PRICES Monthly NEX COMMENTS 200 Unit: US$/t 150 100 4Q17 ASP firmed according to supply 50 tightness 130 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 – ITM ASP: US$80.8/t* (+9% QoQ) 110 – NEX (Feb 23, 2018)**: US$108.9/t
Slide 24: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 24
Slide 25: Sales revenue
Sales revenue +24% (YoY) Unit: US$ million 1,690 Jorong +2% (YoY) 43 Kitadin 68 +51% (YoY) Bharinto 1,367 256 +29% (YoY) 42 +27% (QoQ) 45 Trubaindo +30% (YoY) +28% (YoY) 198 603 470 Jorong Indominco +26% (QoQ) +23% (YoY) 526 Kitadin 409 415 13 +18% (QoQ) 23 Jorong 10 10 90 Bharinto 20 +62% (QoQ) 995
Slide 26: Average gross margin
Average gross margin Unit : US$ Million Revenue 526 267 GPM* (%) 256 226 409 415 210 144 146 90 77 56 30% 34% 33% 32% 23% 23% 28% 20 23 24% 25% 8 10 10 13 32% 26% 39% 41% 44% 38% 20% 26% 29% 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Indominco Trubaindo
Slide 27: Cost Analysis
Cost Analysis WEIGHTED AVERAGE STRIP RATIO COST OF GOODS SOLD* Unit: Bcm/t Avg. FY16 : 8.1 Unit: US$/t Avg. FY16: $32.1/t Avg. FY17 : 11.1 Avg. FY17: $41.7/t 13.0 45.5 11.7 42.2 40.9 10.1 37.8 9.4 32.2 7.4 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 * Excluding royalty FUEL PRICE TOTAL COST**
Slide 28: EBITDA
EBITDA Unit: US$ million +66% (YoY) 448 Jorong +12% (QoQ) +17% (YoY) 6 +6% (YoY) 23 Kitadin +250% (YoY) 65 Bharinto Jorong +102% (YoY) +77% (QoQ) 137 Kitadin 126 Trubaindo +21% (QoQ) 269 129 3 +85% (YoY) 123 5 0.3 9 Bharinto 6 2 1 19 -2% (QoQ) 8 32 19 Trubaindo 20 +65% (QoQ) 50 68 28 Indominco Joron
Slide 29: Net income
Net income Unit: US$ million +93% (YoY) +20% (QoQ) 253 Jorong +39% (YoY) -34% (YoY) 2 8 Kitadin n/m (YoY) 42 Bharinto 80 Jorong +117% (YoY) 2 n/m (QoQ) 67 Trubaindo 6 Kitadin 58 72 +106% (YoY) 5 +32% (QoQ) 131 0.1 13 Bharinto 14 13 +1% (QoQ) 3 31 Trubaindo 19 13 13 Indominco Jorong +143% (QoQ) 35 +5
Slide 30: Balance sheet
Balance sheet KEY RATIOS CASH POSITION Unit: US$ million Net Gearing (%) 374 Net D/E (times) 328 289 268 226 (32%) (26%) (32%) (36%) (39%) (0.32) (0.26) (0.32) (0.36) (0.39) 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 DEBT POSITION Unit: US$ million 0 0 0 0 0 2013 2014 2015 2016 2017 30
Slide 31: 2018 capital expenditure plan
2018 capital expenditure plan Units: USD million Equipment & Machinery 40.0 River Diversion Project 5.9 Bharinto insfrastructure Port Expansion 22.7 107.1 Trubaindo infrastructure 20.8 Equipment & machinery 49.6 Equipment & 16.0 machinery 2017 Jorong ITM ITM Consolidated Indominco Trubaindo Bharinto
Slide 32: Thank you Question & Answer
Thank you Question & Answer 32
Slide 33: Appendices
Nim Appendices
Slide 34: Income statement
Income statement Unit: US$ thousand FY17 FY16 YoY% Net Sales 1,689,525 1,367,498 24% Gross Profit 505,448 330,699 53% GPM 30% 24% SG&A (117,362) (122,141) -4% EBIT 388,086 208,558 86% EBIT Margin 23% 15% EBITDA 447,507 269,033 66% EBITDA Margin 26% 20% Net Interest Income / (Expenses) 2,594 1,469 77
Slide 35: Income statement
Income statement Unit: US$ thousand 4Q17 3Q17 4Q16 QoQ% YoY% Net Sales 525,712 415,030 409,054 27% 29% Gross Profit 158,567 134,338 135,044 18% 17% GPM 30% 32% 33% SG&A (37,580) (26,917) (33,518) 40% 12% EBIT 120,987 107,421 102,036 13% 19% EBIT Margin 23% 26% 25% EBITDA 137,233 122,620 129,036 12%
Slide 36: ITM structure
ITM structure Banpu 65% INDONESIAN STOCK 35%* EXCHANGE Public ITMG PT Indo Tambangraya Megah Tbk. IPO 18th Dec 2007 99.99% 99.99% 99.00% 99.99% 99.00% 70.00% 99.99% 99.99% Indominco Trubaindo Bharinto Kitadin Jorong TIS TRUST ITMI PT Tambang Raya PT ITM Indonesia PT Indominco PT Trubaindo Coal PT Bh