Geo Energy Resources Ltd. · SGX:RE4
Geo Energy Resources — Debt Investor Presentation (June 2018)
24 slides from Geo Energy Resources's debt investor presentation, Jun 27, 2018
Slide 1: Nomura Bond Investor Roadshow
Nomura Bond Investor Road show 27 June 2018 CREATING THE SPARK Staying on Strategy for Sustainable Growth © G E O E N E R G Y R E S O U R C E S
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. These forward looking statements may generally be identified by the use of forward looking terminology, or the negative thereof such as "pl
Slide 3: 1Q2018 Financial Results Highlights
1Q2018 Financial Results Highlights Q12018 L12 Mths 2017 3 Months – 31 March 2018 Revenue US$ 90.5m US$ 317.1m US$ 316.3m Underlying Net Profit US$ 14.3m US$ 47.3m US$ 47.6m 2018 Target Underlying EBITDA US$ 22.9m US$ 83.0 US$ 87.6m 11-12Mt production and sales Sales Volume – Coal 1.9Mt 7.5mt 7.7mt
Slide 4: 1Q2018 Financial Results: ICI4 Index vs ASP
Financial Results 1Q2018 Average ICI4 Index vs Average Selling Price (4200 GAR) (US$/tonne) 102.9 Highlights 105 79.7 94.5 98.2 3 Months – 31 March 2018 50 45.7 48.0 43.1 45 40.1 1Q2018 90.5 40 46.5 43.4 1.9 40.1 39.0 35 4Q2017 92.8 30 2.2 33.4 25 28.3 30.0 20 24.9 3Q2017 74.9 15 1.9 10 2Q2017 49.3
Slide 5: 1Q2018 Financial Position
1Q2018 Financial Position Highlights 31.3.2018 31.12.2017 3 Months – 31 March 2018 Cash and Cash US$ 247.9m US$ 265.8m Equivalents Total Assets US$ 556.4m US$ 550.0m Strong Cash Position US$247.9m Total Liabilities US$ 393.0m US$ 395.5m Shareholders’ Equity US$ 162.1m US$ 153.1m Low Net Gearing NAV
Slide 6: Valuation for Equity Investors
FOR EQUITY INVESTORS Valuation Market capitalisation was at S$279 million as of 19 June 2018. Geo Energy Share Price (19- (19-06- 06-2018) © G E O E N E R G Y R E S O U R C E S 6 © G E O E N E R G Y R E S O U R C E S
Slide 7: Valuation for Bond Investors
FOR BOND INVESTORS Valuation The price of Senior Notes has traded well since its issuance and has been trading better than its peers despite the market condition. US$ Bond Price? (19- (19-06- 06-2018) 7 © G E O E N E R G Y R E S O U R C E S
Slide 8: Our Objective and Vision
Our Objective and Vision Geo Energy Resources 01. Top 10 Coal Producer 02. 11% Market Share Indonesia 2019 4200 GAR Coal in Internationally 2019 03. >150Mt Coal Reserves 04. ROE>20% Expansion of LOM of more than 10 years 2018 Business 2018 8
Slide 9: What are our Competitive Strengths?
What are our Competitive Strengths? Competitive Strengths Superior asset characteristics • High quality coal assets with low-ash and low-sulphur characteristics driving demand locally and internationally. • Thick coal seams make it effective to mine. Low cash costs • Close proximity to anchorage poi
Slide 10: What are our Challenges?
What are our Challenges? Challenges Small scale of operations • SDJ and TBR are adequate to continue operations until 2023 under the mining plans. • To acquire multiple coal assets (producing or near-producing assets) to maintain production volumes past 2022. Geographical concentration • Unexpected
Slide 11: What is our strategy for Sustainable Growth?
What is our strategy for Sustainable Growth? Growths Sales ramp-up • 11-12 million tonnes for SDJ and TBR in 2018. • 13-15 million tonnes for SDJ and TBR thereafter. M&A and investments • Acquisition size of around US$200-250 million with deferred payment based on KPIs. • Potentially expand coal res
Slide 12: What are the Risk Factors?
What are the Risk Factors? Risks Coal price fluctuations • Rapid changes on current and future coal prices substantially affect Geo’s business and operations and financial performance. • Mitigated by nimble and cost competitive business model and strong outlook for the industry. Operational risks •
Slide 13: Coal Price Updates
Coal Price Updates Indonesian 4,200 GAR / 3,800 NAR Following the Indonesia government’s US$ 50 announcement on the 48.0 48.0 domestic price cap, prices 45.6 45.9 fell in the month of March 45 44.0 and April. 41.9 41.8 41.5 41.1 41.1 It gradually increased to 40 US$45.9 at end of May, with bid/offer
Slide 14: Coal Price Forward
Coal Price Forward Near term prices projected to soften but generally stable over next few years Source: IHS Markit – HIS McCloskey 4,200 kc GAR FOB marker (M42) 14 © G E O E N E R G Y R E S O U R C E S
Slide 15: Indonesia Major Coal Producers
Indonesia Major Coal Producers Indonesia thermal coal production (MT) We would be among the Actual 2016 y-o-y Actual 2017 major coal producers in Bumi Resources 86.5 -3.2% 83.7 Indonesia with a targeted Adaro Energy 52.6 -1.5% 51.8 annual production of 11-12 million tonnes in 2018 and Kideco 32.1 -0
Slide 16: Chinese Imports to Stabilise Over Time
Chinese Imports to Stabilise In 2017, Geo substantially contributed 10% of the coal Over Time sales in China market. With a targeted annual production of 11-12 million tonnes in 2018 and a 13-15 million tonnes for 2019 and beyond, our coal sales to China is expected to hit at around 17% and 22% resp
Slide 17: DMO Regulations
DMO Regulations The Government has given guidance on the minimum Geo Energy’s 2018 DMO is based on the RKAB coal DMO of 25% of production plan. The Government production plan. The 25% guideline may only applied to has also given guideline that not fulfilling the DMO Geo from 2019 onwards. requiremen
Slide 18: What has Analysts said about Geo?
What has Analysts said about Geo? Phillip Capital Philip Capital quoted Geo Energy “Looking forward to good deal” with a Buy rating and a target price of S$0.410 and a total return of 87.7%. KGI Securities KGI says that Geo Energy “On track for another record year” by maintaining a Buy rating and a
Slide 19: What has Rating Agencies said about Geo? (Fitch)
What has Rating Agencies said about Geo? US$ DENOMINATED FIXED RATE SENIOR Fitch NOTES DUE 2022 Downgrades Geo to ‘B’ on delayed coal acquisition. 144A / REG S NOTES However, they believe in our strong financial profile and 5NC3 well managed mining operations and offtake NEW YORK LAW agreement. They
Slide 20: What has Rating Agencies said about Geo? (S&P)
What has Rating Agencies said about Geo? US$ DENOMINATED FIXED RATE SENIOR S&P NOTES DUE 2022 Affirming a ‘B’ long term corporate credit rating on Geo. 144A / REG S NOTES 5NC3 NEW YORK LAW The stable outlook reflects their expectation that Geo will maintain a sound cash buffer over the next 12 B+ by
Slide 21: What has Rating Agencies said about Geo? (Moody's)
What has Rating Agencies said about Geo? US$ DENOMINATED FIXED RATE SENIOR Moody’s NOTES DUE 2022 A ramp-up in production and stable coal prices will 144A / REG S NOTES support Geo’s credit profile. 5NC3 NEW YORK LAW Estimate that the EBITDA contribution from its TBR B+ by Fitch Ratings mine will he
Slide 22: Comparison with Peers
Geo is undervalued compared to its peers. Comparison with Peers Peer average P/E ratio: 8.1 Trailing 12-months ended 31 Mar 2018 (In million USD) Bayan Bukit Bumi Geo Indika* ITMG Adaro Resources Asam Resources 308 1,690 1,288 1,700 1,536 3,296 334 Revenue Revenue Revenue Revenue Revenue Revenue Rev
Slide 23: About Geo Energy
About Geo Energy Geo Energy Resources Limited (“Geo Energy”) is listed on the Singapore Stock Exchange and part of the Singapore FTSE index. The Group’s operations are primarily located in Indonesia. It is a coal mining specialist with an established track record in the operation of coal mining site
Slide 24: Thank You
Thank You For more information, please visit www.geocoal.com 24 © G E O E N E R G Y R E S O U R C E S
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