Pt Alamtri Resources Indonesia Tbk · IDX:ADRO
Pt Alamtri Resources Indonesia Tbk — Adaro Energy — Investor Presentation (June 2017)
27 slides from Pt Alamtri Resources Indonesia Tbk's investor presentation, June 2017
Slide 1: Energy for Change
adaro& CHANGE Stony June 2017 = s Tr a) = : a4 3 4 years
Slide 2: Key questions
Key questions: • What is the outlook for coal supply and demand? • How has Adaro performed? • What is Adaro’s strategy and future plan?
Slide 3: Supply response is apparent
Supply response is apparent Coal Production (Mt) • Supply reform in China is expected to 2,500 -10% continue, targeting up to 1 Bt of excess capacity cut. FY15 2,000 • Indonesia is expected to maintain a FY16 relatively flat production, and as its domestic requirement increase, its export will decli
Slide 4: Coal price gaining back momentum
Coal price gaining back momentum 120 750 110 700 100 650 90 600 RMB US$ 80 550 70 500 60 450 50 400 40 350 30 300 Jul-13 Jul-14 Jul-15 Jul-16 May-13 May-14 May-15 May-16 May-17 Jan-13 Mar-13 Jan-14 Mar-14 Jan-15 Mar-15 Jan-16 Mar-16 Jan-17 Mar-17 Nov-13 Nov-14 Nov-15 Nov-16 Sep-13 Sep-14 Sep-15 Sep-
Slide 5: Long term coal demand outlook remains robust
Long term coal demand outlook remains robust… Seaborne coal demand by country (Mt) Japan, Korea, Source: WoodMackenzie Taiwan • China’s share in seaborne market to decline. • Increased potential from Southeast Asia, Indo-China, and India. • Electrification in the developing world continues to drive
Slide 6: …especially from Southeast Asia
…especially from Southeast Asia Coal capacity additions inSoutheast Asia Southeast Asia coal demand per annum Total 600 Mt Total 73 360 Mt Total 259 214 Mt 97 80 132 268 78 131 56 2013 2020 2030 Domestic Consumption (Non- Source: WoodMackenzie Energy Market Service Indonesia) Domestic Consumption (I
Slide 7: Quick look on Indonesia
Quick look on Indonesia Indonesia’s Coal Sales (Mt) • While Indonesia’s coal production in 2016 was relatively flat y-o-y and its export decreased ~2% 400 y-o-y… 300 • …domestic coal demand in 2016 increased ~11% y-o-y. 200 100 0 Export Domestic FY15 FY16 Indonesia’s Electricity Generation by Source
Slide 8: Performance of Adaro Energy
ak wr adaro# years. Performance of Adaro Energy STORY
Slide 9: Resilient operational and financial results
Resilient operational and financial results OPERATIONAL 1Q17 1Q16 % Change Production (Mt) 11.86 12.64 -6% Sales (Mt) 12.03 13.47 -11% OB removal (Mbcm) 54.76 53.58 2% FINANCIAL (US$ millions, unless indicated) 1Q17 1Q16 % Change Net Revenue 727 586 24% Core Earnings 132 81 63% Operational EBITDA 27
Slide 10: Solid balance sheet and strong cash generation
Solid balance sheet and strong cash generation Net Debt Position and Leverage 1200 Cash and Free Cash Flow (million 2,500 Ratios 2.0 US$) 1000 2,000 1.6 800 1,500 1.2 600 1,000 0.8 400 500 0.4 200 - - 2012 2013 2014 2015 2016 1Q17 Net Debt (million US$) Net Debt to Equity (x) 0 2012 2013 2014 2015 2
Slide 11: Cost control – key in delivering strong performance
Cost control – key in delivering strong performance Adaro’s estimated coal cash cost Operational EBITDA margin breakdown (1Q17) 40% 35% Fixed overhead, 30% 5% Mining, 35% - 40% 25% Coal 20% processing , 10% 15% 10% Freight & handling, 5% 20% 0% PTBA Kideco ITMG Shenhua Adaro Source: Bloomberg, based
Slide 12: Delivering return to shareholder
Delivering return to shareholder 150 60% 50% 120 40% 90 30% 60 20% 30 10% 0 0% 2012 2013 2014 2015 2016 Dividend (million US$) Payout Ratio • Adaro has continued to pay dividend through the cyclical downturn. • Although we have no fix dividend payout ratio, but since IPO in 2008, our average dividen
Slide 13: Snapshot of Adaro Energy
ak wr adaro# years Snapshot of Adaro Energy STORY
Slide 14: Who is Adaro Energy
Who is Adaro Energy • Among the largest single-concession coal 2014A: 56.2 Mt producers in the southern hemisphere. Production 2015A: 51.5 Mt 2016A: 52.6 Mt • Top 5 thermal coal exporter globally. Sub-bituminous, medium • Major supplier to Indonesia’s domestic calorific value, ultra-low mark
Slide 15: Business model that creates sustainable value
Business model that creates sustainable value Three pillars of growth integrating pit-to-power PT Adaro Energy, Tbk (AE) Coal Mining Mining Services and Logistics Power Assets Adaro Indonesia (AI) 88.5% Saptaindra Sejati (SIS) 100% Maritim Barito 100% Makmur Sejahtera 100% Coal mining, S Kalimantan
Slide 16: Adaro Coal Mining Assets
Adaro Coal Mining Assets
Slide 17: Diversified Coal Assets Across Indonesia
Diversified Coal Assets Across Indonesia 5 Deepening Coal Product Portfolio and Set to Capitalize Assets to Support Indonesia’s Development 6 1 2 3 4 Adaro has more than 13.7 billion tonnes (Bt) of coal resources (including option to acquire 7.9 Bt) and 1.2 Bt of coal reserves. 1 2 3 4 5 6 Adaro Bal
Slide 18: Over two decades of solid production performance
Over two decades of solid production performance 60 350 2017 2016 2015 Units Guidance Actual Actual 300 50 Production Mt 52 - 54 52.5 51.5 volume Overburden removal (Mbcm) bcm/ton 250 40 Strip ratio 4.85 4.45 5.19 ne Production (Mt) 200 30 150 20 100 10 50 0 0 Tutupan Wara Paringin Balangan AMC Over
Slide 19: Strong customer base with focus on Indonesia
Strong customer base with focus on Indonesia Geographical breakdown of Customer type by % volume (1Q17) customers (1Q17) Spain, 3% China, 2% Others, 5% 10% Philippines, 3% Indonesia, 30% India, 5% Power Taiwan, 6% Hong Kong, Others 6% 90% Japan, 12% South Malaysia, Korea, 13% 15% * Others include ce
Slide 20: Snapshot of Adaro MetCoal Companies (AMC)
Snapshot of Adaro MetCoal Companies (AMC) • Adaro Energy completed the acquisition of AMC from BHP Billiton for 7 CCOWs in Central and East Kalimantan. • The transaction value was $120 million for 75% of the properties. Adaro now owns 100% of the asset. • First coal production has started at the Haj
Slide 21: Adaro Mining Services and Logistics
Adaro Mining Services and Logistics
Slide 22: Ensuring operational excellence
Ensuring operational excellence Strengthens Adaro’s Earnings Profile as Contribution to Parent Co Increases • Key part of our vertical integration. • Ensures operational excellence, productivity improvement and timely reliable delivery to customers. • Non coal mining business accounted for 31% of Ad
Slide 23: Adaro Power
Adaro Power
Slide 24: Building the foundation of Adaro's future
Building the foundation of Adaro’s future Bhimasena Power Indonesia Tanjung Power Indonesia Capacity 2x1000 MW 2x100 MW Stake 34% 65% Acquired Partner(s) J-Power (34%), Itochu (32%) Korea EWP (35%) Location Central Java South Kalimantan • Signed 25 years PPA with PLN • Signed PPA with PLN • Total Ca
Slide 25: Adaro Energy 2017 guidance
Adaro Energy 2017 guidance Consolidated planned strip ratio Coal production (Mt) (bcm/t) 56.2 52 - 54 7 52.3 51.5 52.5 5.6 5.7 5.2 4.85 4.5 47.2 2012A 2013A 2014A 2015A 2016A 2017F 2012A 2013A 2014A 2015A 2016A 2017F Operational EBITDA (US$ billions) Capital expenditure (US$ million) 490 1.1 0.9 0.9
Slide 26: Conclusions and takeaways
Conclusions and takeaways • Coal market is poised to reach supply and demand balance. • Indonesia to lessen coal export and focus on the domestic market. • Long term fundamental for coal remains promising. - Indonesia, Southeast Asia and India will be the main drivers. • Our resilient business model
Slide 27: Thank You
Thank You This presentation is also available at http://www.adaro.com/pages/read/10/45/Presentation