Pt Antam (persero) Tbk · IDX:ANTM
Pt Antam (persero) Tbk — PT Aneka Tambang Tbk (Antam) — 9M 2002 Earnings Presentation
48 slides from Pt Antam (persero) Tbk's earnings presentation, Nov 25, 2002
Slide 1: A Solid Bright Future - Public Expose
A SOLID BRIGHT FUTURE PUBLIC EXPOSE Jakarta, 22 November 2002
Slide 2: Table of Contents
Table of Contents ¢ An Overview on Antam ¢ 9MO2 Operational Performance ¢ 9MO02 Financial Performance ¢ Antam: Planning and Outlook ¢ Antam: Share Price Development ¢ Corporate Issues
Slide 3: Antam: An Overview
ANTAM: AN OVERVIEW
Slide 4: Background
Background An Indonesian leading mining company with over than 34 years of mining experience, Antam owns 2.9mn Ha of mining concession area and develops key strategic alliances with other world-class mining companies such as BHP Billiton (Gag Nickel) and Strand Minerals (Weda Bay) A state-owned comp
Slide 5: Current Operation and Future Prospect
Current Operation and Future Prospect
Slide 6: Sales Composition
Sales Composition Based on Destination - 9M02 Nickel Ore Europe 34% Export 48% ‘0 Japan 18% Korea 30% Taiwan 18% Domestic 52%,, Japan 90% *Volume Revenue *Volume Sales Breakdown oe ite 89 Gold 31% : Goid 26% | 4g Gold 27% Bauxite 8% » Bauxite 8% ome Iron sand "% 2% lron sand ° 2% Nickel oe ore 27% o
Slide 7: Operational Performance 9M02
OPERATIONAL PERFORMANCE 9MO02
Slide 8: Production and Sales - Ferronickel (Ton Ni)
Production and Sales - Ferronickel (Ton Ni) 1997 @ Sales Production *9M02 Production decreased 13.5% due to planned repairs on FeNi Il smelter and labor action in April; both issues have now been resolved
Slide 9: Cost and Selling Price - Ferronickel (USD/lbs)
Cost and Selling Price - Ferronickel (USD/Ibs) 3.73 @ 3.0 2 \ a , --Total Cost -#«-—Selling Price 1997 1998 1999 2000 2001 9M01 9MO02
Slide 10: Sales and Production - Nickel ore (wmt)
Sales and Production - Nickel ore (wmt) Gs 1998 1999 2000 2001 9Mm01 9mo2 1997 1998 1999 2000 2001 9M01 9MO02 1 Sales Production B Sales Production + HG nickel ore production rose 43% on the opening of Tanjung Buli mine «Beginning 2002, Antam sells new product, Low Grade Saprolite Ore (LGSO)
Slide 11: Cost and Selling price - HG Nickel Ore (USD/wmt)
Cost and Selling price - HG Nickel Ore (USD/wmt) 28.3 @ 23.05 \ ® o_o 21.38 22.07 @ ® 18.51 @ 16.55 173 40.70 11.42 o 9 73 ° 9.43 3 13 7.71 *——____¢ o a —¢~—Total Cost —e-— Selling Price 1997 " 1998 " 1999 ‘ 2000 , 2001 " 9MO1 " 9MO02 Increase in cash cost is attributed to higher fuel price, stronge
Slide 12: Cost and Selling Price - LG Nickel Ore (USD/wmt)
Cost and Selling Price - LG Nickel Ore (USD/wmt) 7.49 @ @ 7.23 5.73 @ 4.68 4.64 4.67 4.52 4.16 ._ ” eo ® « 4.64 3.90 3.75 ° Oe 3.46 284 ° + 1.86 o -¢- Total Cost -®- Selling Price 1997 1998 1999 2000 2001 9MO1 9M02 increase in cash cost is due to higher fuel price, stronger Rupiah and lower producti
Slide 13: Sales and Production Gold and Silver (kg)
Sales and Production Gold and Silver (kg) 1997. 1998 1999 2000 2001 9moi 9mo2 1997 1998 1999 2000 2001 9M01 9M02 @ Sales Production Sales Production * 9M02 gold production decreased 11.4% on lower 1H02 production due to lower.gold grade and soft wall condition ¢Gold production is back on track with
Slide 14: Cost and Selling Price - Gold (USD/T.Oz.)
Cost and Selling Price - Gold (USD/T.Oz.) A ~o-Total Cost -*~ Selling Price 1997 1998 1999 2000 2001 9M01 9Mm02 Increased cash cost is due to lower gold grades during 1H02 mining activities H
Slide 15: Sales and Production - Bauxite (wmt)
Sales and Production - Bauxite (wmt) 1998 1999 2000 2001 9M01 9M02 1997 = ° — ~~ eo S cs ° in Om ii Sales Antam recorded stable production and sales during 9M02
Slide 16: Cost and Selling Price - Bauxite (USD/wmt)
Cost and Selling Price - Bauxite (USD/wmt) -®- Total Cost -e~— Selling Price 1997 1998 1999 2000 2001 9mMo1 9Mo02 Increased cash cash is due to higher service cost as mining activities moved to more distant excavation site and higher fuel price
Slide 17: Sales and Production - Iron Sand (wmt)
Sales and Production - lron Sand (wmt) 1998 1999 2001 9M01 @ Sales Production d sales decreased on lower demand f factories
Slide 18: Cost and Selling Price - Iron Sand (Rp/wmt)
Cost and Selling Price - lron Sand (Rp/wmt) 79.072 hd 69.002 sasee A 74.683 en __e 61.013 60.597 o——_____- Ro 49.327 © © 50.381 37.682 Sc sd ? 29.856 29.408 @ + 22.461 Sa Cash Cost —¢— Total Cost ~~ Selling Price 1997 1998 1999 2000 2001 9M01 9M02 Higher cash cost is due to lower productions well as
Slide 19: Cost Reduction Program (CRP)
Cost Reduction Program (CRP) More efficent fuel and energy use Reduction on operational costs Outsourcing Incorporating technology to increase the efficiency of electricity usage Reduction on power consumption Reduction of demurrage Procuring locally made spareparts Reduction of the dosage of reagen
Slide 20: Cost Reduction Program 2002
Cost Reduction Program 2002 Business Unit Planned 9M 02 Rp billion Rp billion % Nickel 18.520 10.245 55 Gold 3.111 1.273 41 Logam Mulia 495 896 181 Bauxite 871 708 81 Iron sand 400 417 104 Total 23.397 13.539 58 CRP program is below target due to unoptimized use of electricity at Antam’s SBU Nickel
Slide 21: Financial Performance 9M02
FINANCIAL PERFORMANCE 9MO02
Slide 22: Financial Highlights
Description (in.Millions.of Rupiah) Net Sales Gross. Profit Operating Profit Net Income Earnings.per-Share.(Rp) Total Asset Total Liabilities Total Equity Financial Highlights 1999 2000 966:15 418.42 318.02 234.35 190.40 2,055.25 598.01 1,447.65 1,566.31 706.03 537.28 383.15 311.31 9516.34 757.00 4;
Slide 23: Profit and Loss Statement
Profit and Loss Statement Rp billion 1999 2000 2001 + 9M01 9mo2 Audited Audited Audited Unaudited Unaudited Net Sales 966. | 1,566.3 1,735.2 1,215.7 1,132.8 Cost of Goods Sold 547.7 860.3 1,091.1 676.1 842.6 Gross Profit 418.4 7 706. 644 1 539.6 290.1 Gross profitmargin (: 5: 37 : lg Operating expen
Slide 24: Balance Sheet
Balance Sheet Rp billion 1999 2000 2001 9M01 9M 02 (Audited) (Audited) (Audited) (Unaudited) (Unaudited) Assets Current Assets 162.5 . 1,328.0 1,366.7 4,254.1 Investment in Shares 30.9 : 30.9 30.9 30.9 Property, plant and equipment 1,093.5 : 1,048.8 1,054.3 1,034.5 Other assets 168.3 : 147.7 165.1 1
Slide 25: Statements of Cash Flow
Statements of Cash Flow 1999 audited 2000 audited 2001 audited 9M01 unaudited 9M02 unaudited CASH FLOW FROM OPERATING ACTIVITIES Cash receipts from customers Payments to suppliers and employees 932,92 593.45 (85.13) 1,585.48 831.07 1,695.34 1,054.95 257.88 1,279.40 706.15 4,193.40 (61.54) (214.53) C
Slide 26: Antam: Planning and Future Outlook
ANTAM: PLANNING AND FUTURE OUTLOOK
Slide 27: Bright Outlook for Nickel and Gold Industry
Bright Outlook for Nickel and Gold Industry * Outlook for nickel price is bright with next year’s price is expected to rise by 8% to USD3,25 per Ibs. ~ source: Brookhunt Nickel Metal Service, July 2002 - * Nickel price outlook for 2003: * Brook Hunt: USD3,25 per Ibs + Westpac: USD3,3 per ibs * Metal
Slide 28: Supply and Demand Projection for Nickel Market
Supply and Demand Projection for Nickel Market ‘000 ton World Nickel Balance Consumption % Change Production % Change World Balance LME Cash Price (c/ib) LME Cash Price ($/t) Forecast Nickel Market Balances 39 24 [0 World Balance gg Western Balance Source: Jim Lennon, Macquarie Research Metals and M
Slide 29: Corporate Strategy: Increasing Shareholders' Value
Corporate Strategy: Increasing Shareholders’ Value *FeNi-3 project * Strategic Alliances and Joint Ventures: *Mitigates exploration risk “A source of funding «Access to the latest mining and exploration technology «Improve the skills for Antam’s human resources: * Weda Bay, with Strand Minerals * Ga
Slide 30: FeNi-3 Project
FeNi-3 Project «Antam’s growth initiatives at its core business * Increase Antam’s ferronickel production to more than double and makes Antam’s output to account for 2%-3% global production * Economies of scale * Potential revenue of USD100 million per year * Holds its position as one of the low cos
Slide 31: FeNi-3 Timeline 2002 - 2003
FeNi-3 Timeline 2002 - 2003 ECA Germany, Contract for EPC Hermes construction signed with Financial approves export RWE Solution for FeNi-3 closure; credit scheme smelter and with MAN Construction to for FeNi-3 B&W for Power Plant-3 begin in April project 2003 JuneV July August September October Nov
Slide 32: Joint Ventures and Strategic Alliances
Joint Ventures and Strategic Alliances « Most JVs are still on exploration and feasibility study stages «Nusa Halmahera Minerals paid dividend to Antam of USD700,000 in February 2002 « Antam cooperates with Inco for the development of nickel resources at East Pomalaa: «Lower transportation cost for
Slide 33: Share Price Movement
SHARE PRICE MOVEMENT
Slide 34: Antam's share price: Outperforming the Jakarta Composite Index
Antam’s share price: Outperforming the Jakarta Composite Index Source: Bloomberg c Underperforming period — ANEKA -TAMBANG ! : began July 2002 —— JAKARTA COMPOSITE INDEX : : i ‘ i : : : i : e it ree L eee enerene: fae ee fod fos eerie ees Jakarta Composite Ind " i i] Antam is back outperforming the
Slide 35: Analysts' Recommendation
Analysts’ Recommendation «DBS Vickers Securities: Buy, report dated November 20 2002 * Bahana Securities: Buy, report dated October 15 2002 * Ciptaanda Sekuritas: Buy, report dated October 18 2002 * andareksa Sekuritas: Hold, report dated October 9 2002 * UBS Warburg: Buy, report dated October 7 200
Slide 36: Antam: Shareholder Composition
Antam: Shareholder Composition Currently our largest shareholder aside from the Government is Oppenheimer Developing Market Fund USA with over 5,6% interest. Antam has 116 foreign and foreign insititutional shareholders, which account for 28% of the shares trading on the JSX Antam is held by 51 Fore
Slide 37: Corporate Issues
CORPORATE ISSUES
Slide 38: Impact from the Bali Incident
Impact from the Bali Incident *No significant impact on Antam’s sales from Bali incident ¢ Most of Antam’s sales are long term contracts ¢ Antam’s consumers choose Antam for its high quality products and on-time delivery ¢ Slight impact on the cargo insurance fee ¢ Insurance now only covers from por
Slide 39: Kaltim Prima Coal
Kaltim Prima Coal *Antam always seeks to increase shareholders’ value. Related to that, Antam has formed a team to perform a due diligence review of PT Kaltim Prima Coal (KPC) as part of the bidding process to potentially acquire a portion of the divested shares of KPC. * The due diligence team will
Slide 40: Use of IPO Funds as of September 2002
Use of IPO Funds as of September 30 2002 Description Percentage Total Funds Realized (%) Rp Billion Rp Billion FeNi-3 project 73 406.15 37.98 Construction of Pomalaa Power Plant 9 50.07 Repair and modernization FeNi-1 44.51 BDN Loan repayment 29.24 Business Development-Logam Mulia 26.39 Total 556.37
Slide 41: Implementation of Good Corporate Governance Practices
Implementation of Good Corporate Governance Practices «Works together with independent consultant Ernst & Young since 2001: « Assessment on Antam’s level of governance * Appointment of Independent Commissioner and formation of Audit Committee * Creation of the Charters of Internal Audit and Committe
Slide 42: y as a good corp e citizen, involving foste
y as a good corp e citizen, involving foste the local community, rather than simply
Slide 43: Illegal Miners
Illegal Miners Antam’s continued approach to the issue of illegal miners is conducted in coordination with local authorities with the help of law enforcement personnel Antam’s approach is a proactive one, focusing on good workable relationship with local community and leaders and to create a sustain
Slide 44: Mine Closure Program
Mine Closure Program * Antam continually observes environmental preservation and improve the welfare of the communities around the mining area. * To implement mine closure programs, Antam cooperates closely with an independent entity for development and operation of Antam’s facilities and infrastruc
Slide 45: Mine Closure Program - SBU Nickel Gebe Operation
Mine Closure Program — SBU Nickel Gebe Operation « Antam has chosen a strategic partner for development of Antam’s assets in Gebe after mine closure _ * Antam has formed an internal team to prepare the mine closure program at Gebe * An independent consultant is currently preparing a blueprint on the
Slide 46: Mine Closure Program - SBU Bauxite Kijang
Mine Closure Program — SBU Bauxite Kijang *Kijang bauxite mine has been explored for more than 65 years and is expected to close in 1-2 years’ time *Antam has formed an internal team to prepare the mine closure prgram_ at Kijang Antam is in serious negotiation with a strategic inves ilize Antam’s. a
Slide 47: Awards and Recognition - 2002
Awards and Recognition - 2002 Working Capital Survey 2002 from CFO magazine on 830 companies from 11 Asian countries: * Antam tops the "Other Metals” list * Antam ranks 23" overall One of the Best 3 Mining Companies in the World 2002 with Less than USD1 billion Asset from Forbes magazine, September
Slide 48: Thank You
THANK YOU
PT Aneka Tambang Tbk (Antam) — 9M 2002 Earnings Presentation on 6ix