PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — Non-Deal Roadshow (August 2008)
53 slides from PT Alamtri Resources Indonesia Tbk's roadshow presentation, Aug 25, 2008
Slide 1: PT Adaro Energy Tbk. UOB Kay Hian Corporate Roadshow
PT Adaro Energy Tbk. UOB Kay Hian - Corporate Roadshow Mr. David Tendian, CFO August 25-26, 2008 Singapore
Slide 2: Disclaimer
Disclaimer We are not in a position to advise you, we are not advising you, and the contents of this presentation must not be construed as any advice to you, on (a) whether to purchase any of our securities or, (b) if you hold an investment in our securities, the value of your investment or how or w
Slide 3: Key Message
Key Message We have consistently delivered annual production growth and have the best growth strategy in Indonesian coal. With the proven management team in Indonesia we are confident we will realize our expansion plans. 2
Slide 4: Table of Contents
Table of Contents • Company Overview • From LBO to Growth • Growth Strategy • Key Assumptions 2008 and 2009 • Summary • Questions & Answers 3
Slide 5: Company Overview: Simplified Corporate Structure
Company Overview Simplified Corporate Structure of PT Adaro Energy Tbk. PT Adaro Energy Tbk 100% Alam Tri Abadi 99.59% 99.99% 100.00% 100.00% 100.00% 85.92% Jasa MSW Adaro IBT Coaltrade SIS Power
Slide 6: Vision
Vision To be the largest and most efficient integrated coal mining and energy company in South East Asia 5
Slide 7: Business Model
Business Model Business model provide huge upside linked to its coal demand and strong coal price Mining Resources & Transportation Barging & Port Sales n Mineable reserves of n Fixed contracted price. n Fixed contracted price. n World class top utility appx. 928 MT and companies as the resources of
Slide 8: Company Background Structure
Company Background Structure PT Adaro Energy Tbk. Coal Mining and Trading Contract Mining Services Infrastructure & Logistic PT Adaro Indonesia (100%) PT Indonesia Bulk Terminal (100%) PT Saptaindra Sejati (85.9%) Coaltrade Services International Pte. Ltd. (100%) PT Makmur Sejahtera Wisesa (100%) Ea
Slide 9: Company Overview: Coal Mining and Trading
Company Overview Coal Mining and Trading n The Company’s subsidiary, PT Adaro Indonesia commenced mining in 1992 from a coal resource area in the Tanjung district at Indonesia’s South Kalimantan Province. n Adaro operates under a first generation Coal Cooperation Agreement , or “CCA”, with the Gover
Slide 10: Operations map: Kalimantan
Balikpapan East Kalimantan Central Kalimantan Tanjung Kelanis Barge River Terminal PT Adaro Indonesia River Barito Banjarmasin South Kalimantan Banjarmasin Taboneo Anchorage South Pulau Laut Coal Coal and Terminal Fuel Storage Handling Port Domestic and Barging Direct Barging
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Slide 13: Coal Mining: Background
Company Overview Coal Mining: Background Adaro was acquired by a consortium of Indonesian and Foreign investors investors through an LBO in June 2005 entailing debt funding of US$923 million and equity of US$50 million n A contract to explore and develop coal resources was signed between the Spanish
Slide 14: Coal Mining Contractor: SIS Background
Company Overview Coal Mining Contractor : SIS Background n SIS started its commercial operation in April 2002. SIS provides a broad range of coal mining services including exploration, drilling, transportation and logistical support, overburden removal and coal mining services Customers Location Con
Slide 15: Infrastructure and Coal Logistics: IBT and MSW
Company Overview Infrastructure and Coal Logistics : IBT and MSW n The coal terminal, operated by IBT, currently has a capacity of approximately 12 MT. It has 8 stockpiles and has the ability to accommodate coal inventory of 13 panamax size vessels or equal to 800 KT. n IBT is in the process to buil
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Slide 18: Stakeholders
Company Overview Stakeholders Key Shareholders • Edwin Soeryadjaya’s Company • Theodore Rachmat’s Company • Garibaldi Thohir’s Company • Benny Subianto’s Company • International consortium including Noonday Asset Management Asia Pte. Ltd. (a sub- advisor of Farallon Capital Management, L.L.C.), GIC
Slide 19: Management Profile
Company Overview Management Profile § Chief Operating Officer and a Director of Adaro and IBT since 2005 § Joined Adaro in 1991 as operating manager of all Kalimantan operations, GM of Adaro since 1998 A. H. Chia § Over 20 years experience in civil construction projects and open cut mining projects
Slide 20: Management Profile
Company Overview Management Profile § General Manager of IBT, having joined Adaro in 1996 holding various positions including Maintenance Superintendent at the Kelanis Crushing and Barge Loading Facility, Coal Handling and Processing Department Head; Coal Processing and Shipping Division Head. § Pri
Slide 21: Table of Contents
Table of Contents • Company Overview • From LBO to Growth • Growth Strategy • Key Assumptions 2008 and 2009 • Summary • Questions & Answers 20
Slide 22: From LBO to Growth
From LBO to Growth Five Main Elements to Support i n U S $ M i l l i ons 1000 900 800 Resources Operational Debt, 923 Management Performance 700 600 Community Development Marketing 500 Debt, 661 400 Financial Management EBITDA, 300 336 200 EBITDA, 175 100 0 LBO 2008E Note: Combined figure of Adaro,
Slide 23: Resources Management
Resources Management Resources Management Operational Performance Large Independently Verified Mineable Reserves Community Development Marketing Financial Management GEOLOGICAL RESOURCES1 MINING RESERVES1 <1000> Borehole Spacing <500> 250m <250m IN-SITU ROM 500m Category Inferred (Mt) Indicated (Mt)
Slide 24: Resources Management: What is Envirocoal?
Resources Management Resources Operational Management Performance Community Product Features Development Marketing Financial Management What is Envirocoal? Envirocoal? n Envirocoal is a moderate energy sub-bituminous coal which has the lowest sulphur and ash content of any coal in the world. It also
Slide 25: Product Features: Niche Market with Robust Demand
Resources Management Resources Management Operational Performance Community Product Features: Niche Market with Robust Demand Development Marketing Financial Management …differentiated by its unique environmental properties 25 n Lowest ash content among coals produced for global export trade, 20 ASH
Slide 26: Operational Performance: Indonesian Coal Production and Market
Resources Operational Management Performance Operational Performance Community Development Marketing Financial Management Adaro Indonesia Global +10 +42 +55 Million Tons Million Tons Million Tons FY05 – FY07 FY05 – FY07 FY05 - FY07 250 Indonesian Coal Production and Market 192 200 187 159 151 147 15
Slide 27: Production Growth Since LBO
Operational Performance Resources Management Operational Performance Community Production Growth Since LBO Development Marketing Financial Management After LBO Production (MT) 40 35 30 25 20 36.1 38 - 39 34.4 15 26.7 Actual Actual Actual Estimated 10 Production Production Production Production 5 0 2
Slide 28: Improving Track Record of Production
Operational Performance Resources Operational Management Performance Community Improving Track Record of Production Development Marketing Financial Management Consistent Production Growth Since 1992 10 Years CAGR: 14% 40 36.1 34.4 35 30 26.7 24.3 25 22.5 20.8 17.7 MT 20 15.5 13.6 15 10.9 8.6 9.4 10
Slide 29: Cost Analysis
Operational Performance Resources Management Operational Performance Cost Analysis Community Development Marketing Financial Management …One of the Lowest Cost Producer § Mine characteristics, operating strategy and location enable the Company to produce coal at attractive cash cost levels. 2005 200
Slide 30: Key Operational Achievements
Operational Performance Resources Operational Management Performance Community Key Operational Achievements Development Marketing Financial Management Operational Improvements Benefits § Sealing of the haul-road from Tutupan to Kelanis was completed § Combination Completion of in October 2005, signi
Slide 31: Marketing: Pricing
Resources Operational Marketing Management Community Performance Marketing Pricing Development Financial Management Pricing Environment Remains Robust… Robust… § Selling price continues to improve due to expiry of low value contracts and new higher value contracts § Pricing outlook for the projected
Slide 32: Distribution of Sales
Marketing Resources Operational Management Performance Community Distribution of Sales Development Marketing Financial Management Exports to Europe Exports to Asia and Oceania 8.0 20% 20.0 60% % of Total Sales % of Total Sales In Million Tons In Million Tons 16.0 50% 6.0 15% 40% 12.0 4.0 10% 30% 8.0
Slide 33: Global Leader in Growing Market of Environmental Coal
Marketing Resources Management Operational Performance Global Leader in Growing International Market of ‘Environmental Coal’ Community Development Marketing Financial Management Proven Global Acceptance United Kingdom Japan Spain Puentes and Meirama Sales to power plants switching to Adaro’s contrac
Slide 34: Financial Management: Refinancing post LBO
Resources Financial Management Operational Management Performance Community Marketing Refinancing post LBO - reduction in interest costs & improved capital structure Development Financial Management LBO Dec 05 Dec 06 23 Mar 07 Dec 07 § US$ 570 million § US$ 200 million § US$ 153 million § US$ 190 mi
Slide 35: Adaro Financial Highlights
Adaro Financial Highlights*) Resources Management Operational Performance A summary Community Development Marketing Financial Management Descriptions LBO – 2005 1H 2007 1H 2008 position position EBITDA (US$ Million) 175 133 186 Debt (US$ Million) 923 455 575 Applicable Interest cost with WHT (US$ Mi
Slide 36: Community Development
Community Development Resources Management Operational Performance Community Development Marketing Financial Management n In 1991 when Adaro commenced operations it made the commitment to integrate with the community and create a sustainable community program n The aim was to address social and econ
Slide 37: Community Development: Human Capital Development
Community Development Resources Management Operational Performance Human Capital Development Community Development Marketing Financial Management Currently Adaro and its sub-contractors employ more than 8000 personnel of which in excess of 70% are Kalimantan born Employment policies have focused on
Slide 38: Community Development: Healthcare Programs
Community Development Resources Management Operational Performance Healthcare Programs Community Development Marketing Financial Management Mobile cataract project which commenced in 2003 is operated in conjunction with the Government’s rural health services and to date has undertaken more than 3000
Slide 39: Community Development: Economic Development Projects
Community Development Resources Management Operational Performance Economic Development Projects Community Development Marketing Financial Management Agricultural development has been a key focus of community development efforts in the largely rural population. Adaro developed a micro-financing sche
Slide 40: Community Development: Social and Cultural Initiatives
Community Development Resources Management Operational Performance Social and Cultural Development Initiatives Community Development Marketing Financial Management There are at least three diverse ethnic groups in the area making up this population In implementing community development projects to s
Slide 41: Table of Contents
Table of Contents • Company Overview • From LBO to Growth • Growth Strategy • Key Assumptions 2008 and 2009 • Summary • Questions & Answers 40
Slide 42: Main Business Strategies
Business Strategies Increase Increase Cost Cost Proven Proven Efficiency Efficiency Reserves Reserves Main Main Strong Strong Business Business Infrastructure Infrastructure Community Community Development Development Strategies Strategies Development Development Programs Programs Develop Develop Lo
Slide 43: Growth Plans
Growth Plans W T H O G RO T H T P A Value Added Products Acquisitions Production and Trading Growth Search for and conduct attractive The Company plans to expand Upgrading brown coal, coal bed acquisitions in coal related its coal production from 40 MT methane (CBM), coal liquefaction, to 80 MT in t
Slide 44: Planned Projects: Power Plants
Planned Projects Power Plants § 2x30 MW power plants planned to be set up by MSW to support power requirement of the Background conveyor belt project. § The plants will use Wara coal. § Financial closure from IFC US$ 122 million. Current Status of the § EPC and equipment supplier have been selected.
Slide 45: Planned Projects: Conveyor Belt Project
Planned Projects Conveyor Belt Project § Adaro’s current road transport capacity to Kelanis is about 40-45 MT; § With Wara mine beginning production around late 2009, the transportation capacity requirement will slowly increase to more than 60 MT; Background § Conveyor Belt Project will transport up
Slide 46: Planned Projects: Barito Channel
Planned Projects Barito Channel § Currently, the Barito Channel has a maximum capacity of 100 MT/year. The Channel capacity reduces to 50 MT during dry season; § Adaro Group, through its affiliated Company, will be the water-way toll operator collecting fees from others to use the channel. Backgroun
Slide 47: Challenges and Risks
Challenges and Risks • Weather • Political and regulatory risk • Commodity price risk (coal and fuel) • Availability of mining equipments and spare parts • Limitation of skilled professionals • Operational risk 46
Slide 48: Table of Contents
Table of Contents • Company Overview • From LBO to Growth • Growth Strategy • Key Assumptions 2008 and 2009 • Summary • Questions & Answers 47
Slide 49: Key Assumptions 2008 and 2009
Key Assumptions 2008 and 2009 2008 2009 Consolidated net income - in Mn US$ 160-170 500-575 EPS (Rupiah) 46 - 49 144 - 166 Production volume - in MT 38-39 42-45 Stripping ratio - blended (bcm/Ton) 4.25 4.50-4.75 Average Selling Price - blended (US$/Ton) 36 -39 52-65 Cash cost (excluding royalty) (US
Slide 50: Table of Contents
Table of Contents • Company Overview • From LBO to Growth • Growth Strategy • Key Assumptions 2008 and 2009 • Summary • Questions & Answers 49
Slide 51: Summary
Summary ü Very Reputable Shareholders ü Strong Management Team ü Largest Integrated Coal Mining Company in Indonesia ü Global Leader in Growing Market of ‘Environmental Coal’ ü One of Indonesia’s Largest Coal Mines, Consistent Production Growth Record ü Reliable Producer and Supplier ü Diversified R
Slide 52: Building a Trusting Relationship
Building a Trusting Relationship We hope you will contact our IR department after this meeting to begin an ongoing dialogue towards building an understanding of how we will achieve our vision of becoming the largest and most efficient integrated mining and energy company in Southeast Asia For more i
Slide 53: Thank you
envirocoal Thank you