PT Indika Energy Tbk · IDX:INDY
PT Indika Energy Tbk — Q1 2021 Earnings Presentation
57 slides from PT Indika Energy Tbk's earnings presentation, May 3, 2021
Slide 1: Indika Energy Group Company Update 3M21
INDIKA ENERGY GROUP COMPANY UPDATE 3M21 PT Indika Energy Tbk. 3 May 2021
Slide 2: Disclaimers
Disclaimers Investors and security holders are cautioned that this communication contains forward-looking statements and that forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict and are generally beyond the control of PT Indika Energy Tbk
Slide 3: Table of Contents
Table of Contents Page # ▪ Indika Energy - Overview 4-5 ▪ Income Statement Analysis 6-9 ▪ Highlights – Latest Cash and Debt Position 10 - 11 ▪ Proactive Liability Management amid Low Coal Price Environment 12 - 13 ▪ Cost Saving and Improvement Initiatives 14 - 16 ▪ Operational Performance YTD and Co
Slide 4: Indika Energy is Indonesia's Leading Integrated and Diversified Company
Indika Energy is Indonesia’s Leading Integrated and Diversified Company ✓ Integrated energy value chain with portfolio spanning across Indonesia ✓ Well-placed to capture domestic economic growth and global economic recovery ✓ Provides complementary products and services to domestic and international
Slide 5: Key Recent Development
Key Recent Development Jun-2020: Revised Dec-2020: wins Gold PROPER mining law passed Award, the highest recognition Dec-2017: Increased Apr-2018: Signed a storage Mar-2019: Construction from Ministry of Environment and stake in Kideco to facility Agreement with PT agreement with PT Freepo
Slide 6: Consolidated Income Statement Highlights
Indika Energy’s Consolidated Income Statement Highlights Summary P&L Quarter Data 3M21 3M20 YoY 4Q20 QoQ Revenues 582.2 641.5 -9.2% 538.6 8.1% COGS (461.2) (536.6) -14.0% (499.0) -7.6% Gross Profit 120.9 104.9 15.3% 39.6 205.4% SG&A Expenses (36.1) (36.2) 3.5% (32.5) 10.9% Operating Profit 84.9 68.7
Slide 7: 3M21 Revenue Contribution
Indika Energy – 3M21 Revenue Contribution Revenue 3M21: US$582.2 million Revenue 3M20: US$641.5 million MBSS Interport Others MBSS InterportOthers 3% 1% 2% 2% 0% 2% Tripatra 6% Tripatra 15% 4) Petrosea 14% Petrosea Kideco 15% 55% Kideco 65% Indika Resources 9% Indika Resources 11% 3M20 3M21 Coal : 7
Slide 8: 3M21 Business Highlights – Revenue Breakdown
3M21 Business Highlights – Revenue Breakdown 3M21 3M20 Subsidiaries YoY Chg Remarks (US$ mn) (US$ mn) Kideco 414.9 376.4 10.2% • ASP ▲ 5.1% (+US$2.2/ton) to US$45.2/ton in 3M21 • Sales Volume ▲ 4.9% (+0.4MT) to 9.2MT in 3M21 • Contract mining revenue ▲ US$3.7m to US$64.0m; OB volume : 27.6 mbcm in 3
Slide 9: 3M21 Business Highlights – Gross Profit
3M21 Business Highlights- Gross Profit 3M21 3M20 YoY Subsidiaries Remarks (US$ mn) (US$ mn) Change • Cash cost ex Royalty ▼ (+US$1.8/ton) from US$29.4/ton in 3M20 to US$27.6/ton in 3M21 Kideco 103.7 67.6 53.4% • SR ▼ 1.9% to 5.2x from 5.3x in 3M20 • GM increased to 25.0% in 3M21 from 18.0%in 3M20 Pe
Slide 10: Strong Cash Position
Indika Energy – Strong Cash Position Cash and Debt Breakdown as of 31 March 2021 US$ million 4) 1,665.9 1800.0 32.7 1600.0 31.5 1400.0 349.4 1200.0 1000.0 772.81) 800.0 79.7 600.0 101.8 1,250.0 400.0 591.3 200.0 0.0 CASH DEBT Cash Fin. Assets Rest. Cash Bonds 2) Bank Loans 3) Leases 4) Other loans 5
Slide 11: Sound Balance Sheet
Indika Energy – Sound Balance Sheet Cash Breakdown by Subsidiaries LTM Free Cash Flow US$ million US$ million HoldCo & Others Kideco Petrosea Tripatra MBSS 350 323.0 35.2 35.2 300 34.6 40 42.7 42.7 133.6 40.3 250 223.3 152.5 134.4 134.4 211.0 154.3 198.4 81.3 200 176.4 59.6 187.5 187.5 84.7 144.4 17
Slide 12: Successful Refinancing to Support Future Growth
Successful Refinancing to Support Future Growth Indika Energy successfully issued global bond of US$675million with 5-year tenor and 8.25% coupon • Additional debt to support diversification plan • Improve liquidity and lengthen maturity profile • Obtained 85.9% consent from 2024 bondholders to alig
Slide 13: Strengthen Balance Sheet with Active Liability Management
Strengthen Balance Sheet with active liability management ✓ Extending bonds maturity in 2022 & 2023 to 2025 ✓ Net debt to EBITDA was 2.97x as of Mar 2021 ✓ Cash balance remains strong at USD772.8m as of Mar 2021 ✓ Selective capital spending – balancing maintenance capex and replacement and additiona
Slide 14: Group-wide Cost Saving and Operational Improvement Initiatives
Group-wide Cost Saving and Operational Improvement Initiatives Oil Brent Price US$/bbl • Minerva Project - a technology-based initiative, using 80 digitalization and data analysis. Three main areas of 70 improvement: 60 ✓ Fleet management system 50 52 40 ✓ Mine planning 30 ✓ Performance management 2
Slide 15: Operational Improvement also Reduces Carbon Emissions
Operational Improvement also reduces carbon emissions Fuel Consumption Mine Planning Optimization Some benefits of technological application in our operations: Fuel consumption: provide real-time monitoring of Fuel Energy use management: Optimize mine design with performance with capturing man, mach
Slide 16: Petrosea Inducted into WEF's Global Lighthouse Network
Petrosea has been Inducted into WEF's Global Lighthouse Network Industrial lighthouses are diversifying and digitizing beyond the four walls of the factory Petrosea is the only local company in Indonesia and Southeast Asia with this status 16
Slide 17: Operational Highlights vs Corporate Guidance
Indika Energy’s Operational Highlights Vs 2020 Corporate Guidance 2021 CAPEX Budget 3M21 % 2021 (US$M) (US$M) Operational Data Guidance Budget 3M21 3M20 % KIDECO Kideco 12.9 0.5% 0.1 Production (MT) 30.0* / 34.0 9.1 8.8 3.4% Strip Ratio (x) 5.5 5.2 5.3 -1.9% Petrosea 80 9.8% 7.9 Newcastle Benchmark
Slide 18: Thermal Coal Price 2021 – Improved Coal Price Environment
Thermal Coal Price 2021 – Improved Coal Price Environment USD/ton CNY/ton 140 701.5 759.8 800 117.5 716.5 120 597.2 700 655.7 632.1 636.0 100 586.1 570.1 600 95.7 95.2 514.5 94.8 89.2 500 80 80.1 65.9 56.4 68.4 54.2 66.1 400 60 366 51.8 53.3 47.1 44.4 52.8 37.3 42.7 45.1 43.0 300 42.0 48.0 36.4 36.3
Slide 19: Indonesia Coal Sector
Indonesia Coal Sector National Coal Production China Coal Import Million Ton Million Ton Indonesia Other Countries National Coal Production Domestic Consumption 350.0 700 610 300.0 600 549 561 625 451 459 461 250.0 500 163.1 156.2 160.8 400 200.0 162.1 151.8 300 150.0 130.2 200 138 138 100.0 128 115
Slide 20: Coal Outlook – LT Demand Remains Solid
Coal Outlook – LT Demand Remains Solid Source: BP Energy Outlook 2019 • In the LT basis, International Energy Agency forecasts higher global coal consumption by 2030 and only marginally lower consumption by 2040 • Thermal coal remains the largest power generator in the world • Growing demand driven
Slide 21: Kideco: Impact of the Revised Mining Law
Kideco: Impact of the Revised Mining Law On 10-Jun-2020, the Indonesian parliament issued Mining Law No. 3 of 2020, which technically guarantees holders of CoW / CCoW extensions for an effective: (a) 20 years (in the form of two 10-year extensions) if the CoW or CCoW has never been extended; or (b
Slide 22: Strategies to Enhance Our Position as a Leading Integrated Company
Strategies to Enhance Our Position as a Leading Integrated and Diversified Indonesian Company Continue to extract operational efficiencies and harness significant synergies among Group companies • Continuing to increase operational efficiency and reduce costs • Managing capital expenditure and negot
Slide 23: Diversification Beyond Coal is a Core Part of Strategy
Diversification Beyond Coal is a Core Part of Strategy ✓ Target non-coal related businesses to make up c.50% of total revenue Non Coal : 13.4% Interport Others by 2025 Tripatra Petrosea E&C & etc 1% ✓ Seeking to transition toward lower contribution from coal-related 6% 2% 4% activities Petrosea Mini
Slide 24: Diversification Investments – Gold Asset Project
Diversification Investments – Gold Asset Project A Strategic investment in Nusantara Resources Limited (ASX: NUS). Nusantara owned 100% PT Masmindo Dwi Area which has sole rights to exploit in Awak Mas Gold Project Location : South Sulawesi, 370 km from Makasar Potential Resources : 2.35 million onz
Slide 25: Awak Mas/Masmindo Gold Project – Investment Structure
Awak Mas/Masmindo Gold Project – Investment Structure Exercised 1st option: After 2nd option: USD 15m for 25% in MDWI USD 25m for 15% in MDWI Project Activities 2 stage Stage 1 : To reach Final Investment Decision (1H21) Current ownership: 45.8% Complete: FEED Potential ownership: 56.7% Detailed Des
Slide 26: Diversification Investments – Fuel Storage Project
Diversification Investments – Fuel Storage Project Build and operate fuel storages exclusively for ExxonMobil Phase 1 Location : Balikpapan, Kariangau, East Kalimantan Project Company : PT Karingau Gapura Terminal Energy Total Project Cost : US$115million Funding Structure : US$75 million - bank loa
Slide 27: Diversification Investments – Patimban Port
Diversification Investments – Patimban Port ▪ A strategic infrastructure project development; as the first integrated supply chain port in Indonesia ▪ On 30 Dec 20, Ministry of Transport has appointed Consortium of Patimban as operator of Patimban Port ▪ Indika joined the consortium through Indika L
Slide 28: Diversification Investments – Renewable Energy
Diversification Investments – Renewable Energy Solar PV • Indika Energy formed a JV to operate solar power business with Fourth Partner Energy, India’s leading solar developer, called Empat Mitra Indika Tenaga Surya (EMITS), with 51% stakes. DIVERSIFICATION • EMITS will provide a one-stop-shop, rene
Slide 29: Strong Focus on and Commitment to ESG Initiatives
Strong Focus on and Commitment to ESG Initiatives Environmental Social Responsibility Governance ✓ Comply with all Indonesian environmental laws, ✓ Focus on supporting long-term economic growth and improving the quality of life in regions of operation ✓ Continuously implementing and improving good r
Slide 30: Awards / Recognition/Certification
Awards / Recognition/Certification • Kideco has won Gold PROPER National Award from Ministry PT Indika Energy Tbk has been ranked 1st in the Basic Materials of Environment and Forestry (KLH) - 2020 Sector of the 2020 Global Fixed-Income Investor Relations • Out of 2,038 national companies participat
Slide 31: Our Commitment to the Environment
Our Commitment to the Environment Lower Carbon Emission Efficient Use of Water Reclamation Scope 1 GHG Total water Reclamation and emissions* 12.6% consumption* 8.9% reforestation** 9.1% 1,350,268 Ton CO2 eq 4,546,611 M3 5,101.2Ha Total energy usage** 13,573,347 GJ 6.8% Waste Management Biodiversity
Slide 32: Our Commitments to the Communities
Our Commitments to the Communities Provided Job Opportunities Indika Solidarity Collaboration with various parties Total numbers PCR Swab We, in collaboration with some-minded testing for staff and families parties, took part in a number of initiatives Impacting 27.000+ family members across 7,539 a
Slide 33: Our Commitment to Good Governance
Our Commitment to Good Governance Strong Business Ethics Board Diversity Share Buyback Obtained Board of Directors is The Company bought back 7.5 million shares with ISO37001:2016 for Anti- 20% Female avergae price of Rp 692.99 per share. Bribery Management System from British Standard Institute New
Slide 34: Appendix
INDIKA ENE 34
Slide 35: 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 4 ▪ Other Portfolios - Established since 1991 - Established since 1994 - Established since 2011 - 3rd largest coal producer - Integrated water c
Slide 36: Synergy across the Group
As a Group, Indika Energy creates synergy and offers comprehensive set of multi-sector expertise and competencies Synergy across the Group Example: IEG end-to-end competencies in coal value chain Identification / • Operational synergy from intra-Group cross-selling acquisition of assets resources op
Slide 37: Indika Energy Subsidiary Results
Indika Energy Subsidiary Results Petrosea MBSS Tripatra Cirebon Electric Power Total Backlog Total Backlog Total Backlog 660MW Power Plant $760.0M $91.7M $136.4M 3M21 Net Income 3M21 Net Income 3M21 Net Income 3M21 Net Income $3.8M - $1.6M -$19.3M $2.3M (20% Indika) 3M21 EBITDA Margin 3M21 EBITDA Ma
Slide 38: Indika Energy's Subsidiaries Backlog
Indika Energy’s Subsidiaries Backlog New Contract/ Remaining Revenue Remaining Adjustment Value Descriptions Contract Value Recognition Contract Value in 2020 Per 31 Dec 2020 Per 31 Mar 2021 Per 31 Mar 2021 Petrosea Contract mining 750.6 4.3 64.0 690.9 E&C 47.3 3.3 12.8 37.8 POSB 32.1 2.7 3.5 31.3 T
Slide 39: Indika Energy's Financial Highlights
Indika Energy’s Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 3,500.0 800 780 2,962.9 700 3,000.0 641.2 650 600 2,500.0 508.1 2,079.9 2,077.2 520 500 2,000.0 426.7 390 400 1,500.0 289.5 1,098.8 253.9 300 260 1,000.0 582.2 200 122.9 120.9 115.9 500.0 130 84.9
Slide 40: Key Business and Credit Ratios
Indika Energy’s Key Business and Credit Ratios LTM Adj EBITDA* (USD mn) & LTM Adj EBITDA Margin (%) Gross Debt & Net Debt / LTM Adj. EBITDA (x) Debt / Capital (%) 1,000.0 30.0% 7.0 68.0% 6.2 66.1% 65.8% 26.6% 66.0% 800.0 25.0% 6.0 5.3 652.5 4.9 64.0% 600.0 15.7% 15.5% 20.0% 5.0 62.0% 15.6% 59.9% 13.
Slide 41: Kideco – Leading Coal Producer in Indonesia
Kideco – Leading Coal Producer in Indonesia • Third largest coal producer in Indonesia • Environmental friendly thermal coal with ultra-low sulphur of 0.1% and low ash of (2.1% to 4.9%) • Attractive location with well-built infrastructure, and integrated value chain within the group, allowing for st
Slide 42: Kideco's Financial Highlights
Kideco’s Financial Highlights Revenues (USD mn) Gross Profit (USD mn) Operating Profit (USD mn) 600 2,000 527.8 500 469.4 1,802.2 492.1 450.3 1,633.0 500 1,574.2 1,600 400 1,249.5 400 1,200 300 300 248.5 208.2 800 177.2 200 200 138.3 414.9 103.7 91.7 400 100 100 0 0 0 2017 2018 2019 2020 3M21 2017 2
Slide 43: Kideco's Operational Highlights
Kideco’s Operational Highlights Cash Cost Breakdown Coal Production (mn ton) Coal Sales (mn ton) Labor Others 1% 1% 45.0 45 Freight O/H 34.0 34.3 34.1 34.9 7% 11% 32.0 33.0 33.0 31.5 30.0 30 Material 9% Contract Gov. Mining + 15.0 15 Royalty Rental 9.1 9.2 17% 54% 0.0 0 2017 2018 2019 2020 3M21 2017
Slide 44: Kideco's Operational Highlights – Quarter Data
Kideco’s Operational Highlights Quarter Data Summary P&L (US$mn) 1Q21 1Q20 YoY 4Q20 QoQ Sales 414.9 376.4 10.3% 330.9 25.4% Gross profit 103.7 67.6 53.4% 47.5 118.2% Operating profit 91.7 56.9 61.2% 37.2 146.3% Net income 51.1 25.1 103.5% 21.4 139.0% EBITDA 97.2 62.3 56.0% 42.8 127.2% Gross margin 2
Slide 45: Peer Comparison (FY20 Data)
Peer Comparison (FY20 Data) PRODUCTION ANNUAL (MT) STRIP RATIO (x) CASH COSTS ex Royalty (US$/t) 60 12 60 55 53 10.1 50 10 50 39 40 8 40 36 33 33 30 5.7 30 25 6 4.4 18 3.8 20 4 20 10 2 10 0 0 - ADRO INDY * PTBA ITMG PTBA ADRO INDY * ITMG ADRO PTBA INDY * ITMG EBITDA MARGIN Domestic Sales/ Total (DMO
Slide 46: Petrosea's Financial Highlights (1)
Petrosea’s Financial Highlights (1) * Revenues (USD mn) Gross Profit (USD mn) Overburden Removal (mbcm) 600 100 140 81.1 121.1 123.5 500 465.7 476.4 80 73.1 74.9 105 97.6 94.4 400 340.7 313.5 60 300 45.7 70 40 200 91.1 35 27.6 100 20 14.2 0 0 0 2017 2018 2019 2020 3M21 2017 2018 2019 2020 3M21 2017
Slide 47: Petrosea's Financial Highlights (2)
Petrosea’s Financial Highlights (2) * Revenues Breakdown by Value 3M21: US$91.1 mn 3M21: US$103.6 mn Others Other 8.1% 1.2% POSB KPI 8.1% 10.2% KPI 28.6% Contract E&C Contract Mining 22.4% Mining 50.5% 58.1% POSB 2.8% E&C 10.1% * Cost Structure 3M21: US$77.7 mn 3M20: US$84.3 mn Amortization Material
Slide 48: Tripatra's Financial Highlights (1)
Tripatra’s Financial Highlights (1) Revenue (USD mn) Gross Profit (USD mn) Net Profit* (USD mn) 500 462.3 35 28.4 45.0 25.8 50 41.7 28 37.5 21 16.9 375 35 14 299.4 7 274.8 278.3 0 20 250 -7 2017 2018 2019 2020 3M21 5 -14 -21 -16.7 125 -10 2017 2018 2019 2020 3M21 -28 -35 39.0 -13.2 -42 -25 -49 -43.5
Slide 49: Tripatra's Financial Highlights (2)
Tripatra’s Financial Highlights (2) * Revenues Breakdown by Value 3M21: US$39.0mn 3M20 : US$100.3mn TPE TPE 12.0% 8.0% TPEC TPEC 88.0% 92.0% Cost Structure 3M21 US$52.1 mn 3M20: US$93.2 mn Others 10.4% Rental Material 7.8% Others 18.6% Handling 25.0% 4.5% Material 41.1% Sub Salary Rental Contractors
Slide 50: MBSS' Financial Highlights (1)
MBSS’ Financial Highlights (1) * Revenues (USD mn) Gross Profit (USD mn) EBITDA (USD mn) 100.0 30 27.7 20 18.4 77.8 25 24.0 75.4 75.0 16 68.5 20 18.4 54.9 12 14.8 50.0 15 8 4.9 10 25.0 3.9 15.2 4 2.5 4.39 1.3 5 - 0 0 2017 2018 2019 2020 3M21 2017 2018 2019 2020 3M21 2017 2018 2019 2020 3M21 Net Prof
Slide 51: MBSS' Financial Highlights (2)
MBSS’ Financial Highlights (2) * Revenues Breakdown 3M21 US$15.2mn 3M20: US$13.0mn FC FC 27% 30% Barging Barging 70% 73% *Cost Structure 3M21: US$13.9 mn 3M20: US$14.8mn Insurance Others 2.6% Others Insurance 16% 11.3% 2% Spareparts Spareparts Depreciation 13.5% Depreciation 12% 37% 36.7% Port charg
Slide 52: Indika Resources' Financial Highlights
Indika Resources’ Financial Highlights Revenues (USD mn) Cost of Good Sold (USD mn) Gross Profit (USD mn) 450.0 400.0 40.0 398.8 359.4 36.2 400.0 350.0 35.0 306.5 300.8 350.0 319.8 325.9 300.0 30.0 300.0 250.0 25.0 22.6 21.3 250.0 192.9 200.0 167.9 20.0 200.0 14.4 150.0 15.0 13.3 150.0 100.0 10.0 10
Slide 53: Indika Resources' Financial Highlights (2)
Indika Resources’ Financial Highlights (2) * Revenues Breakdown 3M21: US$57.1 mn 3M20: US$78.3 mn MUTU Coal 28.4% Trading 45.0% MUTU 55.0% Coal Trading 71.6% MUTU ASP (USD/ton) * MUTU Cash Cost ex Royalty (USD/ton) 100 70 87.6 62.2 61.3 78.3 76.3 76.9 60 80 53.2 50 46.6 60.1 60 38.3 40 40 30 20 20 1
Slide 54: Notes Outstanding
Notes Outstanding Ba 3 Negative Outlook (as of Oct. 2020) The Senior BB - / Negative Outlook Notes are rated: International Ratings (as of Oct 2020) A + / Negative Outlook National Ratings (as of Oct 2020) Indo Energy Capital III Pte. Ltd. Indo Energy Capital IV Pte. Ltd. USD575.0 mn USD675.0 mn 5.8
Slide 55: Environment
Environment ✓ Comply with all Indonesian environmental laws, regulations and standards International HSE Standards in Our Operations ✓ Asset environmental impact based on five key factors ✓ Environmentally friendly technologies at operations ✓ Occupational Health & Safety Management System ISO 45001
Slide 56: Social Responsibility
Social Responsibility Protect health and wellbeing of Indika’s people and have a positive impact in the community Key Initiatives Indika Foundation Develop education infrastructure ✓ Established in 2017 Provide scholarships and key skills vocational training ✓ Key initiatives and programs Engi
Slide 57: Governance
Governance High Commitment on Commitment to Highly Ethical Business ✓ Continuously implementing and improving good corporate governance GCG Principles Practices ✓ Recent addition of three individuals to Board of Directors, including a 1. Transparency 1. High integrity in business female member (repr