PT Indika Energy Tbk · IDX:INDY
PT Indika Energy Tbk — 2Q18 Earnings Presentation
53 slides from PT Indika Energy Tbk's earnings presentation, September 2018
Slide 1: Company Update
COMPANY UPDATE Indika Energy September 2018
Slide 2: Shareholder Structure
Shareholder Structure By 30 June 2018 No Description No. of Investors % No. of shares % I. Domestic Retail 8,330 93.7% 836,666,218 16.1% Employee 26 0.3% 22,521,500 0.4% Cooperative 4 0.0% 382,800 0.0% Foundation 7 0.1% 1,039,100 0.0% Pension Funds 22 0.2% 17,482,400 0.3% Insurance 29 0.3% 21,833,80
Slide 3: Table of Contents
Table of Contents Results Overview Page # Key Highlights 3 Financial Statement Overview 4 Detail Income Statement Analysis 5–7 Cash & Debt 8 Commodity Price Outlook 9 – 10 Kideco Financial & Operational Overview 11 – 14 Asset Overview 15 – 16 Kideco Acquisition 17 – 18 Subsidiary R
Slide 4: Key Highlights 2Q18
Key Highlights Kideco’s Coal Production & Strip Ratio 11,000 10,669 10.0 10,500 10,294 9.0 10,132 10,110 10,000 9,805 9,849 9,846 8.0 6.9 9,500 6.6 6.7 6.8 7.0 5.9 6.5 6.2 6.3 9,000 6.6 8,656 6.3 5.9 6.0 5.7 5.9 6.1 6.0 6.2 8,500 8,360 5.3 5.4 8,374 5.0 8,036 8,231 8,289 7,891 7,904 7,791 7,931 8,00
Slide 5: Indika Energy Consolidated Balance Sheet
Indika Energy Consolidated Balance Sheet Descriptions 6M18 6M17 2017 2016 2015 2014 (in USD mn) unaudited unaudited audited audited audited audited Cash balance* 718.9 335.2 729.0 311.9 339.4 411.1 Current assets 1,329.7 742.0 1,353.8 667.4 827.3 831.4 Total assets 3,562.9 1,914.8 3,635.7 1,822.3 2,
Slide 6: Indika Energy Consolidated Income Statement Highlights
Indika Energy Consolidated Income Statement Highlights Summary P&L Quarter Year To Date YTD 2Q18 2Q17 YoY 1Q18 QoQ 1H18 1H17 YoY Revenues 230.5 176.9% 809.0 -21.1% 1,447.2 453.0 219.4% 638.2 Gross Profit 28.2 428.6% 228.8 -34.9% 377.7 56.5 569.1% 148.9 SG&A Expenses 22.5 45.8% 32.7 0.4% 65.6 42.3 55
Slide 7: Revenue Transformation Driven By Kideco Acquisition
Revenue Transformation Driven By Kideco Acquisition * Revenues 1H18: USD1,447.2 million 1H17: USD453.0 million MBSS Others 2.0% 1.8% Other Tripatra 7.3% 7.8% Petrosea Tripatra 9.7% 32.9% Indika Resources 28.6% Indika Resources 13.8% Kideco 64.9% MBSS 7.2% Petrosea 23.9% Subsidiary 1H18 Revenues ($mi
Slide 8: Disaggregation of 1H18 Consolidated Earnings
Disaggregation of 1H18 Consolidated Earnings – Key Income Statement Segments Net Profit Disaggregation Revenue By Business Segment 1,600 1,600 1,447.2 1,447.2 1,069.5 55.6 1,400 1,400 113.5 139.8 1,200 1,200 199.5 1,000 1,000 938.8 800 800 600 11.0 65.6 600 400 3.8 49.4 71.7 400 107.5 200 76.3 200 0
Slide 9: Strong Cash Position and Low Net Debt Ratio
Strong Cash Position and Low Net Debt Ratio Free Cash Flow Generation on the Rise Net Debt Ratios Improving US$ million US$ million 1,000 800 Net debt 5.0 Cash LTM Free cash flow Net debt to LTM EBITDA 734.1 4.5 800 729.0 718.9 711.2 Net debt to Equity 4.0 700 3.2 3.5 600 614.6 3.0 2.7 2.4 411.1 600
Slide 10: Global Commodity Prices & Indicators Showing Positive Traction in 2Q18
Global Commodity Prices & Indicators Showing Positive Traction in 2Q18 Newcastle vs. QHD 5500 Price WTI Oil Price 800 130 115 QHD 5500 750 120 105 NEWCASTLE (XW1) 114 101.7 700 697 95 95.6 110 650 682 619 101 85 600 623 100 75 550 96 90 66.4 525 88 520 65 63.2 500 80 60.0 58.2 52.2 45.4 57.1 450 75
Slide 11: Coal Price Remains Above Our Internal Targets
Coal Price Remains Above Our Internal Targets US$/ton 130 0% 120 Newcastle Price ASP % Discount (RHS) % Average Discount (RHS) $114.4 110 -10% $100.8 100 -17.2% $97.3 $96.4 -21.7% -20% 90 -21.7% -21.5% $88.4 -25.2% -23.1% $80.8 -25.9% $81.0 80 -28.7% -30% $74.6 $72.2 70 $71.1 -36.1% -34.1% $62.3 $60
Slide 12: Kideco Operational Highlights
Kideco Operational Highlights In Line Production Offset By DMO Pricing Descriptions 2Q18 6M18 (USD mn) 2Q18 2Q17 YoY 1Q18 QoQ 6M18 6M17 YoY Sales 411.0 386.0 6.5% 527.8 -22.1% 938.8 808.7 16.1% Gross profit 109.6 144.1 -23.9% 196.5 -44.2% 306.1 287.9 6.3% Operating profit 99.1 135.2 -26.7% 186.8 -46
Slide 13: China, Indonesia & Korea Drive Kideco's Sales
China, Indonesia & Korea Drive Kideco’s Sales 1H18 – Total Sales Volume: 17.2m ton 1H17 – Total Sales Volume: 16.0m ton Japan Others Japan Others 2.9% 3.6% 3.1% 2.0% Southeast Asia Southeast 9.4% Asia 13.1% China Taiwan China 4.8% 32.5% 24.8% Taiwan 4.8% India 9.6% India 11.2% Korea 10.1% Indonesia
Slide 14: Kideco's Cash Costs Among the Lowest in the Industry
Kideco’s Cash Costs Among the Lowest in the Industry 2Q18 Cash Cost 2Q17 Cash Cost Labor & Freight O/H O/H Labor & Other 4.3% 3.9% Freight 5.7% Other 1.5% -1.1% Material 9.0% 7.7% Material 8.5% Gov. Royalty 17.3% Contract Gov. Royalty Contract Mining + 19.9% Mining + Rental Rental 65.3% 57.9% 600,00
Slide 15: Kideco Inside the Numbers
Kideco Inside the Numbers Reserves by Calorific Value Reserve to Resources (MT) 5,000-5,500 5,500+ 1% 2% Reserves 4,800-5,000 422 22% 4,200-4,300 Resources 75% 1,375 Resources By Mine (MT) Reserves By Mine (MT) Roto South G Roto South G 33 8 Roto North Roto North 9 Roto 40 South Roto South 175 62 Ro
Slide 16: Attractive Location With Well Built Infrastructure
Attractive Location With Well Built Infrastructure JORC resources as of June 2015 stood at 1,375mt and reserves at 422mt. We are in the process of updating our JORC report Kideco produces a range of sub-bituminous, ultra- low sulphur (0.1%) and low ash (average between 2.1% to 4.9%) coal Kideco has
Slide 17: One of the Lowest Cost Operators from Mine to Port
One of the Lowest Cost Operators from Mine to Port Total Reserves : 422MT Total Resources : 1,375MT Publicly Listed Competitor C Logistic Total Reserves : 223MT • Hauling road 38 Km Total Resources : 1,617MT • Barging & Shipping 58 km Logistic • Hauling road 40 Km to coal port • Conveyor belt from c
Slide 18: Kideco Acquisition Overview
Kideco Acquisition Overview Consideration Source & Use of Funds • Indika Energy entered into a SPA (Share Purchase Source of Funds (US$ mn) Agreement) on 22 September 2017 to acquire 40.0% and 5.0% of Kideco shares from Samtan and PT Muji Inti Notes Issuance $575.0 Utama, respectively. Total Sources
Slide 19: Acquisition of additional 45% Stake in Kideco
Acquisition of additional 45% Stake in Kideco Accounting Treatment Impact Post Kideco Transaction One-Off Gain on Revaluation Calculation Goodwill Calculation Description UoM Description UoM Transaction value 46% Kideco US$m 529.0 Cash consideration paid US$m 517.5 Book Value 46% Kideco US$m (144.8)
Slide 20: Supported by Improving Subsidiary Results
Supported by Improving Subsidiary Results Petrosea MBSS Tripatra Cirebon Electric Power Total Backlog Total Backlog Total Backlog 660MW PowerPlant $964.5M $114.0M $543.1M 1H18 Net Income 1H18 Net Income 1H18 Net Income 1H18 Net Income $7.4M -$8.9M $18.6M $15.0M (20% Indika) 1H18 EBITDA Margin 1H18 E
Slide 21: Existing Synergies & Future Opportunities
Existing Synergies & Future Opportunities • Plans to increase production over the medium term could be driven by increased synergies with Petrosea and MBSS. • Increased production could come from Samarangau in an area where Petrosea is the contractor. • 14-20% of Kideco's overburden removal historic
Slide 22: Indika Energy's 2018 Corporate Guidance
Indika Energy’s 2018 Corporate Guidance 2018 1H18 2017 YoY Target Actual Actual Change KIDECO Production (MT) 33-34 16.5 32 +3-6% Strip Ratio (x) 5.9 6.0 6.1 -3.3% Cash Cost xRoyalty ($/MT) 30 29.1 28 7.0% Capex ($Millions) 7.6 0.5 2.2 245.5% Overburden Volume (BCM) 202 99.9 194.1 4.1% PETROSEA Over
Slide 23: Recent Developments
Recent Developments • On 12 April 2018, Indika Energy, through its subsidiary company PT Kariangau Gapura Terminal Energi (KGTE), signed a storage facility service agreement with PT ExxonMobil Lubricants Indonesia. KGTE will invest US$ 108 million to build a terminal to store fuel products in Karian
Slide 24: Peer Comparison (1Q18 Data)
Peer Comparison (1Q18 Data) PRODUCTION STRIP RATIO CASH COSTS 53 50 12 11.4 49.2 50 45 43.8 11 47 10 44 40 9 41 35 32.8 8 38 35 34.0 30 7 31.6 32.0 5.9 32 6 25 4.9 29 21.12 5 4.2 20 17.6 26 4 23 15 3 ADRO INDY PTBA ITMG 20 PTBA ADRO INDY ITMG ADRO PTBA INDY ITMG Domestic Sales/ Total (DMO EBIT MARGI
Slide 25: Appendix
Appendix INDI = KA ENERAY 24
Slide 26: Indika Energy's Financial Highlights
Indika Energy’s Financial Highlights Gross Profit (USD mn) Operating Profit (USD mn) Income from Associates (USD mn) 400 377.7 312.1 160 320 136.2 260 128 300 200 96 200 73.5 72.6 161.0 140 59.5 122.9 64 88.3 88.7 80 100 28.8 34.1 32 11.0 20 (15.4) (10.1) 0 0 2014 2015 2016 2017 1H18 2014 2015 2016
Slide 27: Indika Energy's Key Business Indicators
Indika Energy’s Key Business Indicators Revenues (USD mn) LTM Adj. EBITDA* (USD mn) & EBITDA Margin (%) 1,600.0 1,447.2 60% 600.6 600 44.4% 500 42.1% 1,200.0 1,109.5 1,097.3 1,098.8 26.6% 863.4 400 775.2 333.0 29.5% 20.9% 17.5% 28.7% 749.7 20.1% 30% 800.0 300 250.0 260.6 291.9 593.4 231.9 200 192.0
Slide 28: Indika Energy's Key Credit Ratios (1)
Indika Energy’s Key Credit Ratios (1) Gross Debt & Net Debt / Adj. EBITDA (x) Debt / Capital (%) 8 80% 70% 60% 54.0% 56.4% 55.8% 5.1 5.2 4.9 52.4% 50.3% 52.1% 51.0% 52.3% 4.9 4.3 50% 4.1 3.8 4 40% 3.1 3.2 2.4 2.5 2.4 2.4 30% 1.8 1.9 20% 1.2 10% 0 0% 2011 2012 2013 2014 2015 2016 2017 1H18 2011 2012
Slide 29: Indika Energy's Key Credit Ratios (2)
Indika Energy’s Key Credit Ratios (2) LTM EBITDA / Interest (x) LTM EBIT / Interest (x) 8 6 6.3 4.4 3.6 3.4 3.8 3.7 4 3.4 3 2.7 3.0 2.7 2.2 2.6 2.0 1.2 0.8 0.4 0 0 2011 2012 2013 2014 2015 2016 2017 1H18 2011 2012 2013 2014 2015 2016 2017 1H18 LTM FFO + Interest / Interest (x) LTM EBITDA Less Capex
Slide 30: Indika Energy's Subsidiaries Backlog
Indika Energy’s Subsidiaries Backlog New Contract/ Remaining Contract Adjustment Value Revenue Recognition Remaining Contract Value Value Descriptions in 2018 Per 31 Dec 2017 Per 30 Jun 2018 Per 30 Jun 2018 Petrosea Contract mining 487.2 413.4 121.3 779.3 E&C 140.1 35.6 49.1 126.6 POSB 68.9 25.2 35.
Slide 31: Capex Spending & Approved Dividend
Capex Spending & Approved Dividend * CAPEX Allocation Unit 2018 Budget 3M18 A 1H18 A Realization IE Holding USD mn 1.3 0.4 0.3 26.9% PTRO USD mn 112.6 32.7 60.1 53.4% MBSS USD mn 27.2 1.8 11.6 42.7% ILSS USD mn 0.3 0.0 0.1 25.9% Kideco USD mn 7.6 0.4 0.5 6.6% Resources USD mn 13.8 1.6 1.7 12.4% Tota
Slide 32: Kideco's Financial Highlights
Kideco’s Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 2500 600 600 527.8 2059.4 496.4 2000 500 500 1658.2 1633.0 400 400 1500 328.3 1247.8 306.1 295.6 286.0 281.3 300 300 253.6 938.8 1000 200 180.0 200 155.4 500 100 100 0 0 0 2014 2015 2016 2017 1H18 2014 20
Slide 33: Kideco's Operational Highlights
Kideco’s Operational Highlights Overburden Removal (mn bcm) Coal Production (mn ton) Coal Sales (mn ton) 300 60 60 257.4 244.6 250 193.9 195.9 45 40.3 39.0 45 40.2 38.6 200 32.1 32.0 32.5 31.5 150 30 30 99.9 100 16.5 17.3 15 15 50 0 0 0 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 2014 2015 201
Slide 34: Petrosea's Financial Highlights (1)
Petrosea’s Financial Highlights (1) * Revenues (USD mn) Gross Profit (USD mn) Overburden Removal 400 70 66.6 140 131.2 348.0 350 60 120 300 97.6 259.9 50 100 250 40.9 206.8 209.4 205.8 40 34.9 80 66.0 200 29.1 29.1 57.3 56.3 30 60 150 20 40 100 10 20 50 - - 0 2014 2015 2016 2017 1H18 2014 2015 2016
Slide 35: Petrosea's Financial Highlights (2)
Petrosea’s Financial Highlights (2) * Revenues Breakdown by Value 1H18: USD205.8 mn 1H17: USD140.6 mn 16.9% E&C 29.8% E&C 48.6% Contract 24.2% 58.9% Contract POSB 21.6% POSB * Cost Structure 1H18: USD176.6 mn 1H17: USD121.4 mn Others Others Sub-contractors 3.9% 6.0% Sub contractor 12.5% 2.4% 24.5% R
Slide 36: Petrosea's Contract Mining Operation
Petrosea’s Contract Mining Operation * Overburden Removal Volume (Mn BCM) Coal Getting Volume (Mn Tonne) 56.3 68.6% 17.7 69.6% 33.2 10.5 1H17 1H18 1H17 1H18 Client 1H17 1H18 Client 1H17 1H18 Kideco Jaya Agung 11.7 19.2 Kideco Jaya Agung 2.8 4.4 Tabang 7.2 19.0 Tabang 5.5 9.7 Indoasia Cemerlang 7.0 3
Slide 37: Tripatra's Financial Highlights (1)
Tripatra’s Financial Highlights (1) Revenue (USD mn) EBITDA* (USD mn) Net Profit** (USD mn) 600 50 50 475.9 39.9 500 40 418.6 35.2 40 400 28.0 30 30 25.8 22.8 300 274.8 19.4 18.6 217.5 17.0 20 20 200 11.5 10 113.5 10 (5.5) 100 0 0 2014 2015 2016 2017 1H18 0 2014 2015 2016 2017 1H18 -10 2014 2015 201
Slide 38: Tripatra's Financial Highlights (2)
Tripatra’s Financial Highlights (2) * Revenues Breakdown by Value 1H18: USD113.5 mn 1H17: USD149.2 mn TPE TPE 13.1% 7.5% 86.9% 92.5 % TPEC TPEC Cost Structure 1H18: USD89.1 mn 1H17: USD121.3 mn Misc Rental & Repair Misc 2.3% Rental & Repair 11.6% 6.2% Salary 11.0% 4.2% Sub contractor Salary 9.4% 39.
Slide 39: Cotrans' Financial Highlights
Cotrans’ Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 90 84.2 20 20 80.0 17.1 16.4 16.3 75 16 14.6 59.9 59.3 15 13.0 12.3 60 12.0 12 11.2 45 10 35.3 7.4 8 6.8 30 5 15 4 0 0 0 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 Net Prof
Slide 40: SBS' Financial Highlights
SBS’ Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 32 29.4 16 14 12.7 27.9 14.0 24.7 24.9 10.7 11.3 11.5 10.0 10.0 24 12 10.7 11 8.4 8.8 16.3 16 8 7 8 4 4 0 0 0 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 2014 2015 2016 2017 1H18 Net Profit (USD mn) Coa
Slide 41: MBSS' Financial Highlights (1)
MBSS’ Financial Highlights (1) * Revenues (USD mn) Net Profit (USD mn) EBITDA (USD mn) 150 135.3 30 20 18.4 20.2 17.0 20 120 16 14.8 10 89.8 11.7 90 12 68.4 0 65.8 2014 2015 2016 2017 1H18 60 -10 8 7.3 (8.9) (8.9) 32.4 (12.0) -20 30 4 -30 0 (29.9) 0 2014 2015 2016 2017 1H18 -40 2014 2015 2016 2017 1
Slide 42: MBSS' Financial Highlights (2)
MBSS’ Financial Highlights (2) * Revenues Breakdown 1H18: USD32.4 mn 1H17: USD33.2 mn 25.9% Floating crane 28.0% Floating crane 74.1% Barging 72.0% Barging Cost * Structure 1H18: USD33.0 mn 1H17: USD32.1 mn Others Others Port Charge 14.1% 18.2% Depreciation Port Charge Depreciation 5.5% 37.4% 37.4%
Slide 43: MBSS' Operating Highlights
MBSS’ Operating Highlights * Barging (mn ton) Floating Crane (mn ton) 0.0% 9.9 9.9 -7.4% 5.4 5.0 1H17 1H18 1H17 1H18 Clients 1H17 1H18 Clients 1H17 1H18 Kideco/Cotrans 4.6 6.1 Kideco 2.1 2.5 ADRO 1.7 1.3 BYAN 0.0 0.6 BCS 0.3 0.0 BIB 0.0 0.5 MMS 0.9 0.3 Jhonlin 0.0 0.4 BYAN 0.0 0.6 BRAU 0.5 0.0 Other
Slide 44: MBSS Large Fleet of Vessels
MBSS Large Fleet of Vessels Barges Tug Floating Crane As of Additional As of Additional As of Additional Dec 31, 2017 YTD Dec 31, 2017 YTD Dec 31, 2017 YTD 69 +4 81 +5 4 0 Total 73 Total 86 Total 4 Support Vessel Floating Loading Facility As of Dec 31, 2017 Additional YTD As of Dec 31, 2017 Addition
Slide 45: CEP's Financial Highlights
CEP’s Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 2500 600 120 527.8 104.2 2059.4 500 100 93.0 2000 84.1 86.6 1658.2 1633.0 400 80 1500 328.3 1247.8 306.1 281.3 300 60 938.8 1000 37.3 200 180 40 500 100 20 0 0 0 2014 2015 2016 2017 1H18 2014 2015 2016 2017
Slide 46: Indika Energy Overview
INDIKA ENERAY — Indika Energy Overview 45
Slide 47: Indika Energy, Indonesia's leading fully integrated energy company
Indika Energy, Indonesia’s leading fully integrated energy company PT Indika Energy Tbk. 1 Energy Resources 2 Energy Services 3 Energy Infrastructure - 3rd largest coal producer - Transshipment and water transportation - Resources 1,375.0 MT, reserves 422.0 MT - Established since 1973 - 51.0%
Slide 48: A well-integrated energy platform across the entire value chain
Indika Energy Group Companies Cover End-To-End Coal Business Value Chain Identification / acquisition Energy resources of assets • Operational synergies from intra- Exploration group cross-selling opportunities A well-integrated energy platform across the entire value chain - part of Kideco's overbu
Slide 49: Corporate Structure
Corporate Structure PT Indika Energy Tbk. (Indonesia) 90% 100% 100% 69.80% 100% 100% 100% PT Indika Indonesia PT Indika Inti PT Indika Energy PT Indika PT Indy Properti PT Tripatra Multi PT Petrosea Tbk. Indika Power Resources Corpindo Infrastructure Infrastruktur Indonesia 10% Energi (Indonesia) In
Slide 50: PT Indika Energy Tbk. Shareholder Structure
PT Indika Energy Tbk. Shareholder Structure PT Indika Inti PT Teladan Public Investindo Resources 37.79%* 30.65%* 31.56% PT Indika Energy Tbk. (INDY) listed in the Indonesia Stock Exchange on June 11, 2008 Number of shares: 5,210,192,000 Part of IDX’s LQ 45 Index and MSCI Indonesia Index Market Cap.
Slide 51: Petrosea (PTRO) Shareholding Structure
Petrosea (PTRO) Shareholding Structure PT Indika Energy Public Tbk. 69.8%* 30.2% PT Petrosea Tbk. (PTRO) listed in the Indonesia Stock Exchange on May 21, 1990 Number of shares: 1,008,605,000** Market Cap. as of 29 June 2018 – IDR1.6 trillion (USD112.4 million)*** * Since February 09, 2012 (Indika E
Slide 52: Mitrabahtera Segara Sejati (MBSS) Shareholding Structure
Mitrabahtera Segara Sejati (MBSS) shareholding Structure PT China Navigation Co. PT Indika Energy Public Pte. Ltd. Infrastructure 25.68%* 51.0%* 23.32% PT Mitrabahtera Segara Sejati Tbk. (MBSS) listed in the Indonesia Stock Exchange on April 06, 2011 Number of shares: 1,750,026,639 Market Cap. as of
Slide 53: Thank You
THANK YOU PT Indika Energy Tbk. Graha Mitra Jl. Jend. Gatot Subroto Kav. 21 Jakarta 12930, Indonesia + 62 21 2557 9888 www.indikaenergy.co.id Investor.relations@indikaenergy.co.id