Pt Indo Tambangraya Megah Tbk · IDX:ITMG
Pt Indo Tambangraya Megah Tbk — FY2016 Earnings Presentation
38 slides from Pt Indo Tambangraya Megah Tbk's earnings presentation, Feb 27, 2017
Slide 1: Analyst Briefing FY16 Performance Results
Analyst Briefing FY16 Performance Results Jakarta, 27 February 2017 DISCLAIMER: The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the
Slide 2: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2
Slide 3: Highlights of 4Q16 and FY16 results
Highlights of 4Q16 and FY16 results Coal sales Coal sales 6.7 Mt 26.7 Mt Down 0.3 Mt Down 1.5 Mt -4% Q-Q -5% Y-Y Unit: US$ million 3Q16 4Q16 Q-Q FY15 FY16 y-y Total Revenue 349 409 +17% 1,589 1,367 -14% Gross Profit Margin 22% 34% +12% 22% 24% +2% EBIT 47 104 +122% 194 209 +8% EBITDA 60 131 +119% 25
Slide 4: 2016 in Review
2016 in Review SIGN OF COST $272M EBITDA CORP.GOVERNANCE RECOVERY CUTTING $131M NET PROFIT AWARDS Supply constraints Achieved from Step Improvement in Obtained good pushed price in 4Q16 to Change Productivity EBITDA and bottom corporate governance the highest since 2013 and cost rationalization awar
Slide 5: Awards and achievements in 2016
Awards and achievements in 2016 The Top 10 of Top 1st Runner-up for 50 Indonesian 3rd Best GCG for Best Indonesian Best CG for non- Best Sustainability Companies with Indonesian Public Listed Companies finance category Report in Mining Best CG Companies and Metal Performance From Anugerah From Indon
Slide 6: 2017 and beyond
2017 and beyond OPERATIONAL IMPROVEMENT Improvement of coal hauling road PRODUCTIVITY Optimize truck size and cycle time improvement IMPROVEMENT Optimize barging cycle time Expansion of port stockyard at Bontang Coal Terminal BUSINESS PROCESS ENHANCEMENT Manage procurement activity to be m
Slide 7: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 7
Slide 8: 2016 operational review
2016 operational review Indominco • Production cost down by 29% in 2016 due to cost reduction program • Logistic cost at BoCT reduce by 15% in 2016 TD. MAYANG • Rationalized capex spending by 57% in 2016 INDOMINCO TRUBAINDO BONTANG Trubaindo - Bharinto EMBALUT • Trubaindo: Logistic cost reduce by 24
Slide 9: Operational summary 2016-2017
Operational summary 2016-2017 2016 OUTPUT : 25.6 Mt 2017 TARGET : 25.5 Mt COMMENTS East Similar production target compared to 2016 Kalimantan volume 1Q17 production target lower YoY given lower 15.5 15.3 INDOMINCO inventory at the end of 2016 Higher optimized stripping ratios in 2017 as a 5.8
Slide 10: Indominco Mandiri
Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2017 target: 15.3 Mt Operations 4Q16 production output was lower than target due Ports to heavy rainfalls affecting mine production. Hauling Total average strip ratio in 2017 is expected to be West Block Stockpile higher than 2016 due to optimized co
Slide 11: Melak group – Trubaindo and Bharinto
Melak group – Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2017 target:TCM 5.2 Mt Trubaindo: Mahakam BEK 2.7 Mt River 4Q16 production achieved as according to target. Bunyut Hauling road improvement from South Block Port Trubaindo to Bunyut port to accommodate for larger Product coal con
Slide 12: Kitadin Embalut and Tandung Mayang
Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2017 target: EMB 1.0 Mt Kitadin Embalut: 4Q16 production output was lower than target due to bad weather. TD. Mayang Following the increase in production volume, strip Bontang city ratio will gradually go down. IMM WB IMM EB Kita
Slide 13: Jorong
Jorong SCHEMATIC QUARTERLY UPDATES 2017 target: 1.2 Mt 4Q16 production achieved as according to target. Mine closure plan already submitted and being reviewed by government for approval. Remaining mine reserves will be depleted by 2018. Pelaihari QUARTERLY OUTPUT Unit: Mt Haul road 0.3 0.3 0.3
Slide 14: Agenda
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 14
Slide 15: Global demand trends: 2016 vs 2015
Global demand trends: 2016 vs 2015 CHANGE GEOGRAPHY COMMENTS 2015-16 (MT.) Relaxed capacity-cut policy; coal prices intervention; +40 signed 2017 annual contracts; market more stabilized; CHINA coal prices softened Weak power demand; increased domestic production; INDIA -19 currency demonetizati
Slide 16: Global supply trends: 2016 vs 2015
Global supply trends: 2016 vs 2015 CHANGE GEOGRAPHY COMMENTS 2015-16 (MT.) Increase China demand improved exports; cont. rainfall INDONESIA -1 limited growth A focus on coking coal, bad weather and maintenance AUSTRALIA -1 tightened supply COLOMBIA +8 Heavy rain in Oct/Nov hampered operations;
Slide 17: Regional thermal coal market 2016 vs 2015
Regional thermal coal market 2016 vs 2015 +40 +11 RUSSIA USA OTHER N. ASIA EUROPE +14 -3 -8 CHINA +8 INDIA INDONESIA -25 OTHERS -1 COLOMBIA SOUTH AUSTRALIA OTHERS AFRICA -19 Unit: Mt -1 -1 SUPPLY ATLANTIC PACIFIC -15 DEMAND +32 * -1 * All changes are in 2H (relatively flat in 1H) -25 -6
Slide 18: Regional thermal coal market 2017 vs 2016
Regional thermal coal market 2017 vs 2016 +3 RUSSIA CHINA EUROPE +7 USA +2 -1 -8 * OTHER N. ASIA +10 (+5 to -10) INDIA (+5 to +15) +5 +2 OTHERS ** -5 COLOMBIA INDONESIA +1 +7 OTHERS * SOUTH Unit: Mt AFRICA AUSTRALIA SUPPLY ATLANTIC PACIFIC* -10 DEMAND +5 +4 +2 +2 * Export from North Korea to China i
Slide 19: China thermal coal market review
China thermal coal market review CHINA THERMAL COAL IMPORTS/EXPORTS* Unit: Mt QUARTERLY (ANNUALIZED) ANNUALLY In November, Chinese government relaxed supply constraints by allowing safety- compliant mines to operate 330 working days/year until March 2017 IMPORT NDRC intervened coal price index 2
Slide 20: India thermal coal market review
India thermal coal market review INDIA THERMAL COAL IMPORTS* Unit: Mt Weak power demand and increased supply continues to hamper coal imports QUARTERLY (ANNUALIZED) ANNUALLY Currency demonetization hit coal imports in short-term as small traders and end-users usually conduct cash transactions
Slide 21: ITM coal sales FY16
ITM coal sales FY16 COAL SALES BREAKDOWN BY DESTINATION COAL SALES FY16 Malaysia Italy Others Taiwan Korea 2%1% 2% 3% 6% China 25% Thailand ITALY KOREA USA 8% 0.5 Mt 1.5 Mt 0.1 Mt JAPAN CHINA Philippines 1.5 5.2 Mt 8% 6.7 Mt 26.7 TAIWAN THAILAND 0.9 Mt India Mt Japan 19% INDIA 2.2 Mt 13% 2.8 Mt PHIL
Slide 22: Indicative coal sales 2017
Indicative coal sales 2017 COAL SALES CONTRACT AND PRICING STATUS Contract Status Price Status Fixed Unsold 23% Uncontracted Contracted 39% 39% 61% 28% Indexed 10% Unpriced TARGET SALES 2017: 27.0 Mt 22
Slide 23: ITM ASPs vs thermal coal benchmark prices
ITM ASPs vs thermal coal benchmark prices ITM ASP VS BENCHMARK PRICES COMMENTS Unit: US$/t 200 4Q16 ASP benefitted from bullish market Monthly NEX 180 driven by Chinese output cap policy and Quarterly ITM ASP supply tightness 160 140 – ITM ASP: US$59.8/t* (+20% QoQ) 120 – NEX (Feb 23, 2017)**: US$
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 Unit: US$ million -14% (YoY) 1,589 52 197 Jorong 1,367 -19% (YoY) 42 Kitadin 210 +17% (QoQ) 45 -77% (YoY) -7% (YoY) 198 Bharinto -6% (YoY) 555 Trubaindo 470 0% (YoY) Jorong +42% (QoQ) Kitadin Indominco 409 -11% (QoQ) -8% (YoY) 383 Jorong 12 349 10 Bharinto Kitadin 51 7 8 +51% (QoQ) 886
Slide 26: Average gross margin
Average gross margin Unit : US$ Million Revenue 226 GPM* (%) 409 383 200 200 349 137 144 128 77 62 51 51 33% 33% 24% 28% 17% 15% 17% 24% 10 8 12 21% 32% 7 10 18% 23% 15% 37% 39% 20% 18% 30% 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 4Q15 3Q16 4Q16 Indominco Trubaindo
Slide 27: Total cost
Total cost WEIGHTED AVERAGE STRIP RATIO COST OF GOODS SOLD* Unit: Bcm/t Avg. FY15 : 8.5 Unit: US$/t Avg. FY15: $37.0/t Avg. FY16 : 8.1 Avg. FY16: $32.1/t 8.6 8.3 34.6 8.1 7.4 32.5 32.2 7.1 31.7 31.8 4Q15 1Q16 2Q16 3Q16 4Q16 4Q15 1Q16 2Q16 3Q16 4Q16 * Excluding royalty FUEL PRICE TOTAL COST** Unit: U
Slide 28: EBITDA
EBITDA Unit: US$ million +6% (YoY) +119% (QoQ) Jorong 272 +89% (YoY) -28% (YoY) 5 Kitadin 258 6 -82% (YoY) Jorong 7 Bharinto 32 -73% (QoQ) +78% (YoY) 35 131 Kitadin Trubaindo +136% (QoQ) 18 68 -17% (YoY) 0.3 2 Bharinto 19 +122% (QoQ) 82 Trubaindo 69 28 +54% (QoQ) 60 3 Indominco 11 6 Jorong 5 9 Indom
Slide 29: Net income
Net income Unit: US$ million +107% (YoY) 131 Jorong +85% (QoQ) 3 -12% (YoY) -408% (YoY) Bharinto 19 +97% (YoY) Trubaindo 61 Jorong 35 -12% (YoY) -89% (QoQ) 0.1 Bharinto 63 14 +186% (QoQ) 3 33 13 Trubaindo 23 Indominco Jorong +31% (QoQ) 1 10 89 +2375% (YoY) Kitadin 2 Indominco (20) 5 Bharinto 46 +196
Slide 30: Balance sheet
Balance sheet KEY RATIOS CASH POSITION Net Gearing (%) 461 Unit: US$ million Net D/E (times) 328 289 268 226 (46%) (32%) (26%) (32%) (36%) (0.46) (0.32) (0.26) (0.32) (0.36) 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 DEBT POSITION Unit: US$ million 0 0 0 0 0 2012 2013 2014 2015 2016 30
Slide 31: 2017 capital expenditure plan
2017 capital expenditure plan Units: USD million Equipment & 20.1 Machinery 6.6 Bharinto infrastructure 60.3 22.2 Trubaindo infrastructure Equipment & machinery 22.0 10.6 Equipment & machinery 2016 ITM ITM Consolidated Indominco Trubaindo Bharinto TRUST Consolidated* Note: Total capex plan including
Slide 32: 4Q16 – key takeaways
4Q16 – key takeaways 6.3 Coal price jumped in 6.7 Mt sales 4Q16 – Stronger financial 4Q16 – expected to be slightly lower than performance in 4Q16 more stable in 2017 target and FY16 Higher than expected Improved 4Q16 ASP Capturing margins rainfalls $59.8/t, +20% QoQ) across the value chain 32
Slide 33: Thank you Question & Answer
Thank you Question & Answer 33
Slide 34: Appendices
Nim Appendices
Slide 35: Income statement
Income statement Unit: US$ thousand FY 16 FY 15 Y oY % Net Sales 1,367 ,498 1,589,409 -14% Gross Profit 330,699 350,231 -6% GPM 24% 22% SG&A (1 22,1 41 ) (1 56,649) EBIT 208,558 193,582 8% EBIT Margin 15% 12% EBIT DA 27 2,27 5 257 ,550 6% EBIT DA Margin 20% 16% Net Interest Income / (Ex penses) 1 ,4
Slide 36: Income statement
Income statement Unit: US$ thousand 4Q16 3Q16 4Q15 QoQ% Y oY % Net Sales 409,054 348,968 383,015 17 % 7% Gross Profit 137 ,036 7 7 ,251 90,589 77% 51% GPM 34% 22% 24% SG&A (33,51 8) (30,7 1 9) (43,387 ) EBIT 103,518 46,532 47 ,202 122% 119% EBIT Margin 25% 13% 12% EBIT DA 130,518 59,669 69,101 119%
Slide 37: Rainfalls period 2010 - 2016
Rainfalls period 2010 - 2016 INDOMINCO TRUBAINDO & BHARINTO 2H16 rainfall levels at most Unit: Millimeter Unit: Millimeter mines reached highest levels 500 600 in 6 years since 2010, with 400 500 September –November’s 400 level up steeply 300 200 300 Indominco’s rainfall in 4Q16 200 was higher t
Slide 38: 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% 99.99% 99.99% Indominco Trubaindo Bharinto Kitadin Jorong TRUST ITMI PT Tambang Raya PT ITM Indonesia PT Indominco PT Trubaindo Coal PT Bharinto PT K
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