PT Alamtri Resources Indonesia Tbk · IDX:ADRO
PT Alamtri Resources Indonesia Tbk — PT Adaro Energy — CLSA Second Asia Investors' Forum 2009
40 slides from PT Alamtri Resources Indonesia Tbk's conference presentation, Feb 9, 2009
Slide 1: PT Adaro Energy Tbk. CLSA Second Asia Investors' Forum
PT Adaro Energy Tbk. CLSA – Second Asia Investors’ Forum February 9-11, 2009 Las Vegas IDX TICKER: ADRO IJ
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: Why Adaro?
Why Adaro? 9 High quality assets. Large reserves of ultra-low sulphur and low ash coal which remains in firm demand despite the current downturn in growth of thermal coal market. 9 Second largest coal producer in Indonesia. 9 Professional, dedicated and supportive shareholder team. 9 Professional, f
Slide 4: Adaro at a Glance
Adaro at a Glance Production/Sales volume 42-45 mn tonne 10 Years CAGR of 14% Envirocoal Sub bituminous, moderate CV, high moisture coal, ultra-low pollutants Customers 40 customers in 18 countries Substantially all blue-chip power utilities Pricing All annual price negotiation or index-linked, with
Slide 5: FY 2008 Operational Results
FY 2008 Operational Results Consolidated Production Volume and Sales Units FY07 FY08 % change Production ‘000 MT 36,037.87 38,482.46 7% Sales *) ‘000 MT 37,550.07 41,098.84 9% *) Including coal sold by AE and AI for FY07; and AE, AI and CTI for FY08 Units Actual FY08 FY 2008 target**) % to Target Fu
Slide 6: Adaro Energy's Consolidated Financial Performance 9M08
Adaro Energy’s Consolidated Financial Performance 9M08 9M08 9M07 % change Net Revenue (Bn IDR) 12,386 8,415 47% Cost of Revenue (Bn IDR) 9,237 6,715 38% Operating Income (Bn IDR) 2,719 1,526 78% Net Income (Bn IDR) 686 329 109% EBITDA (Bn IDR) 2,868 1,538 86% Return On Invested Capital 7.1% 3.0% 4%
Slide 7: Current Status
Current Status 9 Full year 2008 production volumes increase 7% to 38.5 million tonnes. 9 Full year 2008 sales volumes increase 9% to 41.1 million tonnes, of which 39.8 million tonnes was sold by Adaro Indonesia. 9 Cash preservation mode. Financial structure strong and improving. 9 The long-term grow
Slide 8: Key Assumptions 2008 and 2009
Key Assumptions 2008 and 2009 2008 2009 EBITDA (Mn US$) 350-400 750-1,000 Production volume - in MT 38-39 42-45 Stripping ratio - blended (bcm/Ton) 4.25 4.50-4.75 Average Selling Price - blended (US$/Ton) 38 -39 52-65 Cash cost (excluding royalty) (US$/Ton) 28-29 28-31 7
Slide 9: 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% 51.20% 85.92% Jasa MSW Adaro IBT Coaltrade SDM SIS Power Mine Mouth SPV Mining Coal Terminal Trading DredgingBarito river mouth Contractor Power Plant
Slide 10: Adaro operations map: mine to Taboneo anchorage
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 9 IDX TICKER: ADRO IJ
Slide 11: Major coal seams up to 50 meters thick
Major coal seams have a thicknesses of up to 50 IDX meters TICKER: ADRO IJ 10
Slide 12: The longest in the southern hemisphere
The longest in the southern hemisphere 11 IDX TICKER: ADRO IJ
Slide 13: Coal loaded on trailer from run-of-mine stockpiles
Coal is loaded on the trailer by backhoes or wheel-loaders from run-of-mine stockpiles 12 IDX TICKER: ADRO IJ
Slide 14: Coal hauled to Kelanis via 80km haul road
Coal is hauled from the mine to Kelanis using Adaro’s dedicated 80km coal haul road 13 IDX TICKER: ADRO IJ
Slide 15: Kelanis crushing, stockpiling and barge loading capacity
Crushing, stockpiling and barge loading facilities at Kelanis have a combined capacity to increase from 45 m tonnes to approximately 55 m tonnes per year 14 IDX TICKER: ADRO IJ
Slide 16: Barge loading conveyor systems
Barge loading is carried out through 2 load out conveyor systems each rated at 4,000 tph IDX TICKER: ADRO IJ 15
Slide 17: Coal transported on flat bottom barges
Coal is transported on flat bottom barges of up to 14,000 tonnes capacity on a single tow line. Travel time down the river IDX is TICKER: 24 hoursADRO IJ 16
Slide 18: River mouth channel dredging completed
Channel clogging is caused due to sedimentation build up at the river mouth. Dredging was completed and started commercial operations on January 1, 2009 17 IDX TICKER: ADRO IJ
Slide 19: Vessels at the Taboneo anchorage
Vessels with their own gear and grabs at the Taboneo anchorage 18 IDX TICKER: ADRO IJ
Slide 20: Vessel loading by floating crane at Taboneo
Vessel loading by floating crane at the Taboneo anchorage 19 IDX TICKER: ADRO IJ
Slide 21: IBT coal terminal
IBT coal terminal which can handle vessels of up to 80,000 dwt IDX TICKER: ADRO IJ 20
Slide 22: Community Development
Community Development Currently Adaro and its sub-contractors employ more than 8000 personnel of which in excess of 70% are Kalimantan born 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 23: Company Overview: 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 24: Company Overview: 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 25: Resources Management
Resources Management Large Independently Verified Mineable Reserves GEOLOGICAL RESOURCES1 MINING RESERVES1 <1000> Borehole Spacing <500> 250m <250m IN-SITU ROM 500m Category Inferred (Mt) Indicated (Mt) Measured (Mt) TOTAL (Mt) Probable (Mt) Proven (Mt) TOTAL (Mt) TOTAL (Mt) Area Tutupan Mine 181 35
Slide 26: Marketing: Distribution of Sales
Marketing Distribution of Sales Exports to Europe Exports to Asia 9.0 25% 20 50% 8.0 In Million Tons In Million Tons 48% % of Total Sales 20% % of Total Sales 7.0 15 46% 6.0 15% 5.0 44% 4.0 10 10% 42% 3.0 2.0 5 40% 5% 1.0 38% 0.0 0% 0 36% 2003 2004 2005 2006 2007 2008 2003 2004 2005 2006 2007 2008 E
Slide 27: Global Leader in Growing International Market of 'Environmental Coal'
Global Leader in Growing International Market of ‘Environmental Coal’ Proven Global Acceptance United Kingdom Japan Spain Puentes and Meirama Sales to power plants switching to Adaro’s contracts allows power stations being low sulphur, low NOX emission power stations to save converted to use enviroc
Slide 28: Resources Management: Product Features
Resources Management Product Features: Niche Market with Robust Demand …differentiated by its unique environmental properties 25 Lowest ash content among coals produced for global export trade, 20 ASH % (adb) providing consumers with significant cost savings 15 Blending Envirocoal with higher as
Slide 29: Operational Performance: Improving Track Record of Production
Operational Performance Improving Track Record of Production Consistent Production Growth Since 1992 10 Years CAGR: 14% 45 38.5 40 36.1 34.4 35 30 26.7 24.3 25 20.8 22.5 MT 20 17.7 13.6 15.5 15 10.9 8.6 9.4 10 5.5 5 1.0 1.4 2.4 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Slide 30: Operational Performance: Cost Analysis
Operational Performance Cost Analysis Low Cost Producer Mine characteristics, operating strategy and location enable Adaro to produce coal at attractive cash cost levels. 2005 2006 2007 2008 Stripping Ratio 3.3 3.57 4.25 4.25 Adaro Cash Cost (excl. Royalty) (US$ /T) 29 +8% to 28.0-29.0 27 25.8 11%
Slide 31: Cost of Revenue Breakdown
Cost of Revenue Breakdown …Fuel price will decrease in 2009 9M 2007 9M 2008 Depreciation & Depreciation & Amortization 2% Amortization Changes in Changes in Coal purchased 0% 3% 3% Inventory 1% Inventory Coal purchased 7% 10% Royalties Royalties 11% 47% 47% Mining Mining Freight and Handling Freight
Slide 32: Pricing
Pricing Pricing Environment Remains Firm… Adaro Sales Price (US$ / T) 40 38.0 – 39.0 38 +12 % to 15% 36 34.0 34 +11% 32 30.7 30.1 +2% 3 30 28 26 24 2005 2006 2007 2008E 31
Slide 33: Growth Plans
Growth Plans WT H O G RO T H T P A Value Added Products Acquisitions Production 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 the next 5 yea
Slide 34: Infrastructure Development to Support Growth Plan
Infrastructure Development to Support Growth Plan Current Target Project Background Status Completion Costs 2x30 MW power plants planned to be set up by MSW Financial closure for $122 2012 US$ 160 Mn to support future power requirement. Mn from IFC Power The plants will use Wara Coal EPC & E
Slide 35: Capital Expenditure
Capital Expenditure • 2008 Capex of US$ 240 Mn. • 2009 Capex of US$ 120 Mn. • Routine Capex: - US$ 30 Mn – US$ 50 Mn for routine maintenance. - US$ 30 Mn – US$ 40 Mn for equipment purchases. • To be funded by internal cash flow and existing debt facilities. 34
Slide 36: Group's Existing Facilities
Group’s Existing Facilities Facility Borrower Security Outstanding Tenor Interest Costs US$ 750 Mn Facility1) which PT Adaro Clean US$ 600 5 years until LIBOR + 120 bp Indonesia and Million December Swapped to consists of : Coaltrade 2012 translate sub US$650 Term Loan Facility 4.5% US$100 M
Slide 37: 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 36
Slide 38: Why Adaro?
Why Adaro? 9 High quality assets. Large reserves of ultra-low sulphur and low ash coal which remains in firm demand despite the current downturn in growth of thermal coal market. 9 Second largest coal producer in Indonesia. 9 Professional, dedicated and supportive shareholder team. 9 Professional, f
Slide 39: 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 40: Thank you
Thank you adaro®# envirocoal
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