Pt Indo Tambangraya Megah Tbk · IDX:ITMG

Pt Indo Tambangraya Megah Tbk — Q1 2018 Earnings Presentation

35 slides from Pt Indo Tambangraya Megah Tbk's earnings presentation, May 16, 2018

  1. Slide 1: Analyst Briefing 1Q18 Performance Results

    PT Indo Tambangraya Megah Tbk ANALYST BRIEFING 1Q18 PERFORMANCE RESULTS Jakarta, 16 May 2018

  2. Slide 2: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2

  3. Slide 3: Highlights of 1Q18 results

    Highlights of 1Q18 results Coal Sales: 4.4 Mt Down 2.1 Mt Down 1.0 Mt -32% Q-Q -19% y-y Unit: US$ million 1Q18 4Q17 1Q17 Q-Q y-y Total Revenue 379 526 368 -28% +3% Gross Profit Margin 29% 30% 31% -1% -2% EBIT 88 121 89 -28% -2% EBITDA 99 137 103 -28% -4% Net Income 58 80 57 -28% +2% ASP (USD/ton) $8

  4. Slide 4: Highlights of 1Q18: AGM, dividend and board

    Highlight Highlightsof of1Q15 1Q18 ANNUAL GENERAL MEETING OF SHAREHOLDERS BOARD OF COMMISIONERS Somruedee Chaimongkol Rudijanto Boentoro Somsak Sithinamsuwan Commissioner Commissioner Commissioner (New Member) Prof. Djisman Simandjuntak President Commissioner & Independent Prof. Djoko Wintoro, PhD M

  5. Slide 5: Synergy: coal business focus

    Synergy: coal business focus HARD SYNERGY (INPUTS) SOFT SYNERGY (SKILLS) WITHIN BUSINESS UNIT CONTRACT MINING COAL MARKETING ARBITRAGE COAL MINING SYNERGY In-house contract Secure third party coal for Sharing of market insights Cross-fertilization of UG mining at ITM blending and trading and mechani

  6. Slide 6: ITM growth strategy

    ITM growth strategy CONTRACT MINING COAL TRADING Growing internal contribution Blending for value-added Focusing on growing organically. Leveraging ITM’s extensive Currently conducting a further network to enable this asset- study to increase capacity to light strategy. work at Melak cluster. COAL M

  7. Slide 7: Organic growth provides additional reserves at a relatively attractive price

    Organic growth provides additional reserves at a relatively attractive price SIMPLIFIED AND ILLUSTRATIVE Drilling boundary • Current reported reserves/resources OB are based on current exploration • Does not include potential reserves, which could be proven by doing more exploration Exploration • Mo

  8. Slide 8: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 8

  9. Slide 9: Operational summary 2018

    Operational summary 2018 2018 TARGET : 22.5 Mt QUARTERLY OUTPUT TREND East Unit: Mt Kalimantan 6.0 5.7 5.0 5.1 INDOMINCO 4.4 Bharinto 13.1 Mt Jorong Kitadin Trubaindo Bunyut Port TRUBAINDO TD.MAYANG 4.6 Mt Indominco BHARINTO Samarinda KITADIN 2Q17 3Q17 4Q17 1Q18 2Q18e 2.7 Mt 2Q17 3Q17 4Q17 1Q18 2Q18

  10. Slide 10: Indominco Mandiri

    Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2018 target: 13.1 Mt Operations  1Q18 production was slightly lower than target Ports due to weather condition affecting the mine Hauling production. West Block Stockpile  Average strip ratio in 2018 is expected to be ROM Mine Crusher higher than 2017

  11. Slide 11: 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  1Q18 production output slightly above than target. Bunyut Port  Continue hauling road improvement program from Trubaindo to Bharinto area, expected to be completed East K

  12. Slide 12: Kitadin Embalut and Tandung Mayang

    Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2018 target: EMB 1.0 Mt  Kitadin Embalut:  1Q18 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

  13. Slide 13: Jorong

    Jorong SCHEMATIC QUARTERLY UPDATES 2017 target: 1.1 Mt  1Q18 production achieved according to target.  Additional reserves from river diversion project would extend the life of the mine beyond 2019.  Permit requirement by government is in progress. Pelaihari QUARTERLY OUTPUT Unit: Mt Haul road 0.

  14. Slide 14: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 14

  15. Slide 15: Global demand trends: 2018 vs 2017

    Global demand trends: 2018 vs 2017 CHANGE GEOGRAPHY COMMENTS 2018-17 (Mt.)  Winter demand and tight domestic supply boosted import in 1Q18  Domestic coal prices fell sharply after Chinese New Year after end winter season and CHINA -10 improving supply  Import restriction has been introduced in Ap

  16. Slide 16: Global supply trends: 2018 vs 2017

    Global supply trends: 2018 vs 2017 CHANGE GEOGRAPHY COMMENTS 2018-17(Mt.)  Domestic price cap at $70/t will encourage producers to export more coal INDONESIA +1  Slow global demand growth will limit Indonesian export AUSTRALIA  Bad weather and maintenance limited supply growth in Q1-2018 +7  Wea

  17. Slide 17: China: enter weak demand season

    China: enter weak demand season CHINA THERMAL COAL IMPORTS/EXPORTS* 1Q18 Unit: Mt QUARTERLY (ANNUALIZED) ANNUAL  Supply tightness continued in Jan-Feb 2018 due to winter demand and slow supply recovery resulted in coal prices surged. IMPORT  Chinese government capped QHD FOB 5500 194 210 172 189 1

  18. Slide 18: India: growing economy, increase electricity demand

    India: growing economy, increase electricity demand INDIA THERMAL COAL IMPORTS* 1Q18 Unit: Mt  Coal demand is growing due to improvement in the domestic economy. QUARTERLY (ANNUALIZED) ANNUAL  Domestic supply shortfall and rail capacity constraints led to Southern and Western power plants scouting

  19. Slide 19: ITM coal sales 1Q18

    ITM coal sales 1Q18 COAL SALES BREAKDOWN BY DESTINATION COAL SALES 1Q18 0.9 Mt 0.7 Mt Others Hongkong 0.3 Mt Italy 5% Taiwan 3% 3% Japan 3% 20% 0.1 Mt Vietnam 4% KOREA ITALY Korea 0.4 Mt 0.3 Mt CHINA 0.2 Mt 6% HK 1.5 0.1 Mt JAPAN Thailand China 0.2 Mt 0.5 Mt 6% 16% 0.5 Mt TAIWAN VIETNAM India INDIA

  20. Slide 20: Indicative coal sales 2018

    Indicative coal sales 2018 COAL SALES CONTRACT AND PRICING STATUS Contract Status Price Status 31% Unsold Fixed 31% 30% Uncontracted 69% 3% Contracted Unpriced Contracted 36% Indexed TARGET SALES 2018: 25.0 Mt 20

  21. Slide 21: ITM ASPs vs thermal coal benchmark prices

    ITM ASPs vs thermal coal benchmark prices ITM ASP VS BENCHMARK PRICES Monthly NEX COMMENTS 200 Unit: US$/ton 150  1Q18 ASP continued firm according to supply 100 tightness. 50 – ITM ASP: US$83.6/t* (+3% QoQ) 130 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 – NEX (Apr 27, 2018)**: US$95.

  22. Slide 22: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 22

  23. Slide 23: Sales revenue

    Sales revenue Unit: US$ million 526 -28% QoQ 13 +3% YoY 23 90 368 378 Jorong +18% (QoQ) ; +44% (YoY) 11 15 Kitadin 11 16 -29% (QoQ) ; +50% (YoY) 48 Bharinto 210 61 -32% (QoQ) ; +26% (YoY) 123 Trubaindo 117 -44% (QoQ) ; -5% (YoY) Jorong Kitadin 267 Indominco 237 221 -17% (QoQ) ; -7%(YoY) Bharinto Tru

  24. Slide 24: Average gross margin

    Average gross margin Unit : US$ Million Revenue 526 267 GPM* (%) 237 221 210 368 378 123 117 90 61 48 30% 28% 23 31% 29% 27% 22% 20% 26% 16 25% 31% 11 13 15 31% 11 31% 44% 42% 28% 11% 28% 18% 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 1Q17 4Q17 1Q18 Indominco Trubaind

  25. Slide 25: 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: $41.6/t 12.9 11.7 47.8 11.4 42.2 45.0 40.6 10.1 37.8 9.4 1Q17 2Q17 3Q17 4Q17 1Q18 1Q17 2Q17 3Q17 4Q17 1Q18 * Excluding royalty and fuel business FUEL

  26. Slide 26: EBITDA

    EBITDA -28% QoQ Unit: US$ million 137 -4% YoY 2 103 9 Jorong 99 0.2 19 -47% (QoQ) ; n.m (YoY) 2 1 Kitadin 7 -23% (QoQ) ; +200% (YoY) 12 16 Bharinto -16% (QoQ) ; +30% (YoY) 48 27 Trubaindo 32 -33% (QoQ) ; +21% (YoY) Jorong 60 55 Indominco -23% (QoQ) ; -29%(YoY) Kitadin 42 Bharinto Trubaindo Indominco

  27. Slide 27: Net income

    Net income Unit: US$ million 81 3 -28% QoQ 6 +2% YoY 13 58 Jorong 57 -76% (QoQ) ; -226% (YoY) 1 Kitadin 4 8 -28%(QoQ) ; -180% (YoY) 30 11 Bharinto -15% (QoQ) ; +36% (YoY) 19 Trubaindo 19 -34% (QoQ) ; +1% (YoY) Jorong Kitadin 37 37 27 Indominco Bharinto -27% (QoQ) ; -26%(YoY) Trubaindo Indominco (5)

  28. Slide 28: Balance sheet

    Balance sheet KEY RATIOS CASH POSITION Unit: US$ million 424 Net Gearing (%) 374 Net D/E (times) 328 268 226 (26%) (32%) (36%) (39%) (49%) (0.26) (0.32) (0.36) (0.39) (0.49) 2014 2015 2016 2017 1Q18 2014 2015 2016 2017 1018 DEBT POSITION Unit: US$ million 0 0 0 0 0 2014 2015 2016 2017 1Q18 28

  29. Slide 29: 2018 capital expenditure plan

    2018 capital expenditure plan Units: US$ million 1.1 Indominco 16.0 3.1 Trubaindo Realized up to Mar 2018 20.8 2018 Capex plan 0.2 Bharinto 22.7 0.1 Jorong 5.9 3.3 TRUST 40.0 8.0 ITM Consolidated 107.1 Note: Total capex plan including Jakarta office after elimination 29

  30. Slide 30: 1Q18 – key takeaways

    1Q18 – key takeaways 6.3 Improved 1Q18 ASP 4.4 Mt sales 1Q18 – Financial performance $83.6/t, +3% (QoQ) in line with the target in 1Q18 remain strong and +24% (YoY) Dividend declaration – Rainfalls still higher Strip ratio in 2018 is final dividend in 1Q18 in mine area expected to be higher IDR 1,84

  31. Slide 31: Thank you Question & Answer

    Thank you Question & Answer 31

  32. Slide 32: Appendices

    Nim Appendices

  33. Slide 33: 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

  34. Slide 34: Income statement

    Income statement Unit: US$ thousand 1Q18 4Q17 1Q17 QoQ% YoY% Net Sales 378,247 525,712 367,874 -28% 3% Gross Profit 111,053 158,567 114,945 -30% -3% GPM 29% 30% 31% SG&A (23,350) (37,580) (25,773) EBIT 87,703 120,987 89,172 -28% -2% EBIT Margin 23% 23% 24% EBITDA 99,486 137,233 103,204 -28% -4% EBIT

  35. Slide 35: Rainfall 2013-2018

    Rainfall 2013-2018 INDOMINCO TRUBAINDO & BHARINTO Unit: Millimeter Unit: Millimeter  Except for Melak cluster 700 700 (i.e. Trubaindo and 600 600 Bharinto), rainfall has 500 400 500 400 been above 5-year 300 300 average this year 200 200 100 100  Rainfall(s) in February 0 1 2 3 4 5 6 7 8 9 10 11 1

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