Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Geo Energy Group — FY2015 Earnings Presentation
44 slides from Singapore Exchange's earnings presentation, Mar 10, 2016
Slide 1: Results 2015
Results 2015 10 March 2016 1 GEO ENERGY GROUP Tung Kum Hon – Chief Executive Officer
Slide 2: Forward looking statements
Forward looking statements This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such as "plans", "expects
Slide 3: Contents
CONTENTS Corporate Profile Board and Management Coal Mine Assets 2015 Financial Highlights Market and Next Growth Appendix 2015 Results Announcement 3
Slide 4: Corporate Profile
CONTENTS CORPORATE PROFILE 4
Slide 5: Corporate Profile: awards
CORPORATE PROFILE “Voted the Most Transparent Company at the Investors’ Choice 2013, 2014 and 2015 Awards” . by the Securities Investors Association of Singapore “Most Outstanding Company in Indonesia” The Indonesian Business Award 2015” “Indonesia Entrepreneur Award and Education Award 2015” Recogn
Slide 6: Corporate Profile
CORPORATE PROFILE Geo Energy Group is an integrated coal mining group Established since 2008, headquartered in Jakarta, Indonesia with its corporate office in Singapore and production operations in Kalimantan, Indonesia Listed in Singapore Stock Exchange’s main board since 2012 It owns two p
Slide 7: Corporate Milestones
CORPORATE PROFILE Corporate Milestones 7
Slide 8: Board and Management
CONTENTS BOARD AND MANAGEMENT 8
Slide 9: It takes strong leadership focused on constructive change
BOARD AND MANAGEMENT “It takes strong leadership focused on constructive change.” There must be a change and actions to improve cash flows, cut costs, increase sales, increase assets investments for future growth. 9
Slide 10: Board and Management
CONTENTS BOARD AND MANAGEMENT Mr Charles Antonny Melati Mr Tung Kum Hon Executive Chairman Executive Director & Chief Executive Officer One of the key founders of the Group Responsible for the overall business and management of the Group Oversees the overall strategic direction and expansion plans f
Slide 11: Board and Management
CONTENTS BOARD AND MANAGEMENT Mr Soh Chun Bin Mr Lu King Seng Lead Independent Director Independent Director Currently the Managing Director of Victoria Medical Beauty Group Currently the Managing Director of Orion Advisory Pte Ltd More than 15 years of experience in corporate finance and mergers an
Slide 12: Together the Board has more than 25 years in coal mining
BOARD AND MANAGEMENT “Together the Board has more than 25 years in coal mining and more than 50 years in corporate finance and management, legal, financing, M&A, commodities and investments experience” to steer Geo to greater growth and expansion, and diversification of its business, growth. 12
Slide 13: Coal Mine Assets
CONTENTS COAL MINE ASSETS 13
Slide 14: Coal Mine Assets: BEK and SDJ
COAL MINE ASSETS BEK • 4,570 hectares of mining concession area • Located in Kutai Barat, East Kalimantan • JORC coal reserves of 11.1 million mt of thermal coal • Thermal coal measures an average calorific value in excess of 3,400 GAR Indonesia • Coal production and sales to-date 2.5 million mt SDJ
Slide 15: Open Pit Mining
COAL MINE ASSETS OPEN PIT MINING 15
Slide 16: SDJ Mine Development
COAL MINE ASSETS SDJ MINE DEVELOPMENT Fastest development within 2 months Commenced production on December 2015 Low strip ratio – 1:3.2 Lowest infrastructure costs – 17 km to Jetty and 15 km to Anchorage for exports Production to-date – 416,000 mt 1st Shipment of 55,000mt of 4200CV coal
Slide 17: SDJ Mine Development
COAL MINE ASSETS SDJ MINE DEVELOPMENT 5 meters deep 8 meters deep Deep coal seams and low strip ratio of 1:3 makes it more effective to mine 17
Slide 18: Types of Coal
COAL MINE ASSETS TYPES OF COAL 53 Mt reserves Moisture content Geo’s coal reserves 18
Slide 19: SDJ Coal
COAL MINE ASSETS SDJ COAL Extremely low sulfur content of general thermal coal Specification SDJ No flue gas desulfurization greatly reduce costs for its Total moisture (ARB) 35% users Volatile matter 41% Satisfy and meet the sulfur oxides (SOX) emission Ash 4.6% regulations Total sulfur 0.1%
Slide 20: 2015 Financial Highlights
CONTENTS 2015 FINANCIAL HIGHLIGHTS 20
Slide 21: 2015 Financial Highlights
2015 FINANCIAL HIGHLIGHTS 4Q2015 4Q2014 % change FY2015 FY2014 % change (US$ million) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited) (Unaudited) Revenue 3.7 10.3 (64) 22.3 53.1 (58) Gross profit (0.2) 2.0 (109) 0.4 (2.4) 83 Gross profit margin (%) N.M. 19.4% - 1.8% N.M. - G&A expenses (1.
Slide 22: 2015 Financial Highlights
CONTENTS 2015 FINANCIAL HIGHLIGHTS Geo Energy's FY2015 performance adversely impacted by weak coal prices and demand, but Group optimistic about future prospects with start of production of the new SDJ coal mine Geo Energy expects operating environment to improve as SDJ coal mine enters into key p
Slide 23: 2015 Financial Highlights
2015 FINANCIAL HIGHLIGHTS Group’s revenue decreased 58% to US$22.3 million in FY2015 due to lower revenue from coal sales and mining services. Lower coal prices and global demand in 2015 continue to weigh on the Group’s financials. Gross profit turned positive in FY2015 mainly contributed by pro
Slide 24: 2015 Financial Highlights
2015 FINANCIAL HIGHLIGHTS The Group’s balance sheet remained healthy with cash and cash equivalents at US$12.4 million as of 31 December 2015. Non-current assets increased by 11.5% to US$146 million as of 31 December 2015 due mainly to deposits and prepayments for coal purchases, acquisition of
Slide 25: Revenue breakdown by geography and segment
2015 FINANCIAL HIGHLIGHTS FY2014 Revenue Breakdown by FY2015 Revenue Breakdown by Geographic Geographic 1% 6% 28% 47% 53% 65% Indonesia China Singapore Others Indonesia Singapore FY2014 Revenue Breakdown by FY2015 Revenue Breakdown by Segments Segments 6% 50% 44% 44% 56% 25 Coal Trading Mining Servi
Slide 26: Revenue, margins, cash and debt
CONTENTS 2015 FINANCIAL HIGHLIGHTS Revenue and Average Selling Price Cash, Debt & Total Debt/Total Asset Revenue (US$'m) Cash (US$m) Debt (US$m) Average Selling Price (US$/tonnes) Total Debt/Total Asset 1.00x 42.6 87.7 80.9 54.3 31.7 0.41x 0.38x 0.50x 108.6 0.14x 23.2 53.1 17.8 13.3 12.4 22.3 0.00x
Slide 27: Market and Next Growth
CONTENTS MARKET AND NEXT GROWTH 27
Slide 28: Fossil fuels remain the dominant source of energy
MARKET AND NEXT GROWTH Fossil fuels remain the dominant source of energy powering the global economy, providing around 60% of the growth in energy and accounting for almost 80% of total energy supply in 2035 (down from 86% in 2014). 28
Slide 29: Market and Next Growth
MARKET AND NEXT GROWTH While there is a widening range of views on the We think that demand is likely to grow, and the future of Chinese and Indian imports demand, there cost of marginal supply should determine prices. seems to be a consensus on the ramp-up in thermal With coal supply shrinking in C
Slide 30: Indonesian producers have more flexibility
MARKET AND NEXT GROWTH Indonesian producers perhaps have more flexibility than producers elsewhere given transportation to ports is lower cost and less capital intensive. The competitive contractor landscape also means that Indonesian producers can react more quickly to cash losses than peers elsewh
Slide 31: Weak coal price remains; will power be the next catalyst?
MARKET AND NEXT GROWTH Weak coal price remains …..will power be the next catalyst? 31
Slide 32: Production discipline and power
MARKET AND NEXT GROWTH More production discipline is needed Power holds the key 32
Slide 33: Indonesia national electrification plan
MARKET AND NEXT GROWTH Indonesia is building a 35 GW national electrification plan for the next 5 years (2015-2019) 33
Slide 34: Coal-fired power plants share of GW project
MARKET AND NEXT GROWTH 56% of the 35 GW power project will come from coal-fired power plants (CFPP) or 20 GW 34
Slide 35: Indonesia energy mix of power project
MARKET AND NEXT GROWTH Indonesia energy mix of 35 GW power project (2014-2019) 35
Slide 36: IPPs to build 71% of new CFPP
MARKET AND NEXT GROWTH IPPs is expected to build 71% of the new CFPP 36
Slide 37: What is Geo Doing?
MARKET AND NEXT GROWTH WHAT IS GEO DOING? 37
Slide 38: What is Geo doing?
MARKET AND NEXT GROWTH • Expand coal reserves • Increased production – 6MT per annum • Strengthened and more /restructure (1) (2) • Increase cash flows and reduce costs capital Capital Group • Broaden customers base and supply to structure base Business PLN • Fund raising • Diversify/expand to other
Slide 39: Not much to reap because not much was sown
MARKET AND NEXT GROWTH “For many companies, there’s not much to reap because not much was sown”. Rather than using profit to build their businesses, many companies have been buying their stocks by borrowing or under investing. Long-term investors depend on new profits , not just the bidding up of fa
Slide 40: Market and Next Growth: recent developments
MARKET AND NEXT GROWTH Production ramped up in Apr 2016 to 0.5 million tons (announced in December 2015) Acquisition for the remaining 34% of SDJ (4200 CV) - US$25m (completed in December 2015) Proposed acquisition of PJA coal mine (6800 CV) – US$18m (announced in January 2016) Proposed acqu
Slide 41: Our Competitive Strengths to Deliver
MARKET AND NEXT GROWTH OUR COMPETITIVE STRENGTHS TO DELIVER 41
Slide 42: Competitive strengths
MARKET AND NEXT GROWTH Competitive Low cost strengths structure and Strong revenue high coal growth with SDJ calorific value mine Experienced commencement management and target 6Mt with good per annum One of the Government more relations competitive mining Integrated companies in coal mining Indones
Slide 43: Trading at 17% above NTA/share
MARKET AND NEXT GROWTH Currently trading at our 17% above NTA/share Does not reflect the future earnings of Geo going forward and the start of SDJ mine 43
Slide 44: Thank You
GEO ENERGY GROUP THANK YOU