Pt Indo Tambangraya Megah Tbk · IDX:ITMG

Pt Indo Tambangraya Megah Tbk — Q3 2016 Earnings Presentation

39 slides from Pt Indo Tambangraya Megah Tbk's earnings presentation, Nov 15, 2016

  1. Slide 1: Analyst Briefing 3Q16 Performance Results

    Analyst Briefing 3Q16 Performance Results Jakarta, 15 November 2016 DISCLAIMER: The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the

  2. Slide 2: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2

  3. Slide 3: Highlights of 3Q16 and 9M16 results

    Highlights of 3Q16 and 9M16 results Coal sales Coal sales 7.0 Mt 20.1 Mt Up 0.8 Mt Down 0.8 Mt +13% Q-Q -4% Y-Y Unit: US$ million 2Q16 3Q16 Q-Q 9M15 9M16 y-y Total Revenue 278 349 +25% 1,206 958 -21% Gross Profit Margin 17% 22% +5% 22% 20% -2% EBIT 20 47 +132% 146 105 -28% EBITDA 32 59 +88% 192 141

  4. Slide 4: Highlights of 3Q16 and 9M16 results

    Highlights of 3Q16 and 9M16 results 6.3 Mt 8.3 bcm/t 13% QUARTERLY OUTPUT 2.6% INCREASE IN SR 0.8 MT INCREASE IN SALES VOLUME 49.9$/t 25% 49.9$/t 146% 12% OR US$ 5 INCREASE IN REVENUE TO 12% INCREASE INCREASE IN IN NET ASP INCREASE IN ASP US$ 349 M INCOME TO US$ 33 M 4

  5. Slide 5: ITM group (2013 - present): leaner and stronger

    ITM group (2013 - present): leaner and stronger PRODUCTIVITY COST POWER CORPORATE IMPROVEMENT RATIONALIZATION DEVELOPMENT IMPROVEMENT (2013 – Present) (2013 – Present) (2013 - Present) (2013 - Present) Infrastructure & logistics Continuous cost reduction Development of power Develop market based and

  6. Slide 6: Coal market: tight supply in thermal market

    Coal market: tight supply in thermal market China’s Supply drivers - structural capacity Supply drivers – short term, seasonal removal and Demand drivers – short term, seasonal production Delayed caps Unplanned reaction from replacement production purchases cuts Newcastle Coal Index 1 Unit: US$/t Cu

  7. Slide 7: ITM strategies: strategic options

    ITM strategies: strategic options SHORT-TERM MEDIUM TO LONG-TERM  Study of auger mining method  Reoptimize mine plan / reserves  Drilling and exploration at Indominco  Additional exploration and development and Trubaindo  Reserves acquisition  Bharinto phase 2 study  Underground mining study

  8. Slide 8: ITM achievement in 2016

    ITM achievement in 2016 Best Indonesian Listed The Top 10 of Top 50 Indonesian Best CG Performance in non- Companies with Best CG Companies financial category Performance ITM achieved “Best Indonesian ITM achieved “Best CG ITM achieved “The Top 10 of Listed Companies”, from Performance in non-financ

  9. Slide 9: 3Q16 – key takeaways

    3Q16 – key takeaways Coal price has more 6.3 output, - 6.3Mt quarterly $33m net income, +146% than doubled since 8% QoQ due to higher QoQ from $13m in 2Q16 early 2016, highest rainfalls since 2013; outlook strong Higher than expected Improved ASP, $49.9/t “Leaner, stronger” rainfalls impacted +12% Q

  10. Slide 10: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 10

  11. Slide 11: Operational summary 2016

    Operational summary 2016 2016 OUTPUT TARGET 2016 OUTPUT TARGET 2016 target: 26.2 Mt Unit: Mt 7.2 East 7.0 6.5 6.3 Bharinto Kalimantan 6.2 Jorong Kitadin INDOMINCO Trubaindo 16.0 Mt Bunyut Port Indominco TRUBAINDO TD.MAYANG 5.8 Mt BHARINTO Samarinda 4Q15 4Q15 1Q16 1Q16 2Q16 2Q16 3Q16 3Q16 4Q16e 4Q16e

  12. Slide 12: Rainfalls period 2010 - 2016

    Rainfalls period 2010 - 2016 INDOMINCO TRUBAINDO & BHARINTO  3Q16 rainfall levels at most Unit: Millimeter Unit: Millimeter mines reached highest levels 600 500 in 6 years since 2010, with 450 400 500 September’s level up steeply 350 400 300  Despite lower than average 250 300 200 rainfall in 1H16

  13. Slide 13: Indominco Mandiri

    Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2016 target: 16.0 Mt  3Q16 production output was lower than target due to Operations Ports heavy rainfalls affecting mine production. Hauling  Total average strip ratio in 2016 is expected to be lower Stockpile than 2015. West Block ROM Crusher Mine st

  14. Slide 14: Trubaindo and Bharinto

    Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2016 target:TCM 5.8 Mt  Trubaindo: Mahakam BEK 2.5 Mt River  3Q16 production achieved as according to target. Bunyut  Bunyut port expansion: completed re-test & run of Port dust suppression and on progress of relocating the East Kalimantan Produc

  15. Slide 15: Kitadin Embalut and Tandung Mayang

    Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2016 target: EMB 0.9 Mt  Kitadin Embalut:  3Q16 production output was lower than target due to bad weather and sliding affecting the production TD. Mayang performance. Bontang city  Kitadin Tandung Mayang: IMM WB IMM EB  Mine closure

  16. Slide 16: Jorong

    Jorong SCHEMATIC QUARTERLY UPDATES 2016 target: 1.0 Mt  3Q16 production achieved as according to target.  Mine closure plan already submitted and being reviewed by government for approval.  Remaining mine reserves will be depleted by 2018. Pelaihari Haul road QUARTERLY OUTPUT 20km Unit: Mt 0.3 0.

  17. Slide 17: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 17

  18. Slide 18: Global demand trend: 2016 vs 2015

    Global demand trend: 2016 vs 2015 CHANGE GEOGRAPHY COMMENTS 2015-16 (MT.)  Supply rationalization created short supply, CHINA +35 rising domestic coal prices  Weak power demand, low power plant utilization, INDIA -14 increased domestic coal production and high coal prices hampered coal imports OTH

  19. Slide 19: Global supply trend: 2016 vs 2015

    Global supply trend: 2016 vs 2015 CHANGE GEOGRAPHY COMMENTS 2015-16 (MT.) -11  Continued rainfall and increased domestic INDONESIA demand limited export growth AUSTRALIA -1  Bad weather and maintenance tighten supply COLOMBIA +8  Weather condition and social and labour issues interrupted supply f

  20. Slide 20: Global coal market trend: 2016 vs 2015

    Global coal market trend: 2016 vs 2015 +35 Unit: Mt +7 SUPPLY DEMAND RUSSIA USA OTHER N. ASIA EUROPE +13 CHINA -7 -10 +8 INDIA INDONESIA OTHERS +1 OTHERS -19 COLOMBIA SOUTH -11 AUSTRALIA AFRICA -14 -1 -2 ATLANTIC PACIFIC +27 -3 -5 -19 20

  21. Slide 21: China thermal coal market review

    China thermal coal market review CHINA THERMAL COAL IMPORTS/EXPORTS* Unit: Mt  YTD China’s imports surpassed 2015 QUARTERLY (ANNUALIZED) ANNUALLY levels.  Supply cut policy resulted in significant price spikes. IMPORT  Government eased capacity-reduction 221 199 201 153 160 167 145 148 176 229 15

  22. Slide 22: India thermal coal market review

    India thermal coal market review INDIA THERMAL COAL IMPORTS* Unit: Mt  India still faces a surplus supply situation and high stocks in domestic coal market QUARTERLY (ANNUALIZED) ANNUALLY due to weak demand and high domestic coal production  Expected higher coal burn inQ4 due to low hydro as monso

  23. Slide 23: Coal prices outlook: sustainability of increase

    Coal prices outlook: sustainability of increase SHORT-TERM IMPACT MEDIUM TO LONG-TERM IMPACT WINTER SEASON SUPPLY DELAYS STEEL DEMAND COMMERCIALIZATION increases electricity of new mine infrastructure leads to sales of of Chinese goods production demand in India construction ( >1 year) thermal coal

  24. Slide 24: ITM coal sales 9M16

    ITM coal sales 9M16 COAL SALES BREAKDOWN BY DESTINATION COAL SALES 9M16 Malaysia Italy Others Taiwan Korea 2%1% 2% 3% 4% China Thailand 25% 8% ITALY KOREA USA 0.4 Mt 0.9 Mt 0.1 Mt Philippines JAPAN CHINA 8% 1.5 3.8 Mt 5.2 Mt 20.1 TAIWAN THAILAND 0.6 Mt India Mt Japan INDIA 13% 19% 1.6 Mt 2.5 Mt PHIL

  25. Slide 25: Indicative coal sales 2016

    Indicative coal sales 2016 COAL SALES CONTRACT AND PRICING STATUS Contract Status Price Status Uncontracted Unsold Indexed 1% 1% 4% Contracted 95% 99% Fixed TARGET SALES 2016: 27.1 Mt 25

  26. Slide 26: ITM ASPs vs thermal coal benchmark prices

    ITM ASPs vs thermal coal benchmark prices ITM ASP VS BENCHMARK PRICES COMMENTS Unit: US$/t 200 Monthly NEX  3Q16 ASP firmed according to general 180 bullish market driven by Chinese Quarterly ITM ASP 160 production cap policy as well as supply 140 tightness. 120 – ITM ASP: US$49.9/t* (+12% QoQ) 100

  27. Slide 27: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 27

  28. Slide 28: Sales revenue

    Sales revenue Unit: US$ million +25% QoQ -9% YoY 382 10 349 Jorong -22% (QoQ) ; -30% (YoY) 43 Kitadin 278 7 10 -17% (QoQ) ; -77% (YoY) 56 9 51 Bharinto 12 +70% (QoQ) ; -10% (YoY) 30 128 Trubaindo 128 87 +47% (QoQ) ; 0% (YoY) Jorong Kitadin Indominco 221 200 +6% (QoQ) ; -10%(YoY) Bharinto 189 Trubain

  29. Slide 29: Average gross margin

    Average gross margin Unit : US$ Million Revenue 382 GPM* (%) 349 221 200 189 278 127 128 87 56 51 43 30 22% 22% 12 10 10 9 17% 17% 28% 7 17% 11% 21% 23% 31% 9% 20% 9% 27% 18% 26% 16% 30% 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 3Q15 2Q16 3Q16 Indominco Trubaindo Bha

  30. Slide 30: Total cost

    Total cost WEIGHTED AVERAGE STRIP RATIO COST OF GOODS SOLD Unit: Bcm/t Avg. 9M15 : 9.0 Unit: US$/t Avg. 9M15: $45.3/t Avg. 9M16 : 8.4 Avg. 9M16: $38.1/t 9.5 43.1 8.6 40.4 8.1 8.3 38.9 37.8 37.5 7.1 3Q15 4Q15 1Q16 2Q16 3Q16 3Q15 4Q15 1Q16 2Q16 3Q16 FUEL PRICE TOTAL COST* Unit: US$/Ltr Avg. 9M15: $0.6

  31. Slide 31: EBITDA

    EBITDA +88% QoQ Unit: US$ million -5% YoY 63 Jorong 1 59 +98% (QoQ) ; 0%(YoY) 1 Kitadin 1 -50% (QoQ) ; -92% (YoY) 12 8 Bharinto +700% (QoQ) ; +33% (YoY) 6 32 18 Trubaindo 0.1 +500% (QoQ) ; -78% 2 1 (YoY) 25 3 Jorong Indominco +11% (QoQ) ; +48%(YoY) Kitadin 31 Bharinto 28 Trubaindo 21 Indominco 3Q15

  32. Slide 32: Net income

    Net income +146% QoQ Unit: US$ million +33% YoY 33 Jorong 1 +100% (QoQ) ; +100% (YoY) Kitadin 25 2 +200% (QoQ) ; -71% (YoY) 0.1 5 Bharinto 7 +500% (QoQ) ; +150% (YoY) 9 Trubaindo 2 13 +800% (QoQ) ; -36% (YoY) 1 14 Indominco Jorong 16 17 +6% (QoQ) ; +183%(YoY) Kitadin Bharinto Trubaindo 6 Indominco (

  33. Slide 33: Balance sheet

    Balance sheet KEY RATIOS CASH POSITION Net Gearing (%) Unit: US$ million 461 Net D/E (times) 289 268 268 226 (46%) (32%) (26%) (32%) (31%) (0.46) (0.32) (0.26) (0.32) (0.31) 2012 2013 2014 2015 9M16 2012 2013 2014 2015 9M16 DEBT POSITION Unit: US$ million 0 0 0 0 0 2012 2013 2014 2015 9M16 33

  34. Slide 34: 2016 CAPEX plan

    2016 CAPEX plan Units: US$ million 2.9 Indominco 8.6 8.5 Trubaindo 24.6 0.6 Bharinto 1.2 Realized up to Sep 2016 0.0 2016 Capex plan Kitadin 0.1 0.0 Jorong 0.1 17.4 ITM Consolidated 38.4 Note: Total capex plan including Jakarta office and PT. TRUST (Mining Contractor Business) after elimination 34

  35. Slide 35: Thank you Question & Answer

    Thank you Question & Answer 35

  36. Slide 36: Appendices

    Nim Appendices

  37. Slide 37: Income statement

    Income statement Unit: US$ thousand 9M16 9M15 YoY% Net Sales 958,444 1,206,550 -21% Gross Profit 193,663 259,797 -25% GPM 20% 22% SG&A (88,623) (113,417) EBIT 105,040 146,380 -28% EBIT Margin 11% 12% EBITDA 140,834 192,087 -27% EBITDA Margin 15% 16% Net Interest Income / (Expenses) 918 2,845 Derivat

  38. Slide 38: Income statement

    Income statement Unit: US$ thousand 2Q16 3Q16 3Q15 QoQ% YoY% Net Sales 278,371 348,968 382,023 25% -9% Gross Profit 46,748 77,251 85,509 65% -10% GPM 17% 22% 22% SG&A (26,691) (30,719) (36,200) 15% -15% EBIT 20,057 46,532 49,309 132% -6% EBIT Margin 7% 13% 13% EBITDA 31,602 59,458 62,810 88% -5% EBI

  39. Slide 39: ITM structure

    ITM structure Banpu 65.14% (as of 30 Sep 2016) 34.86%* INDONESIAN STOCK EXCHANGE Public ITMG PT Indo Tambangraya Megah Tbk. IPO 18th Dec 2007 99.99% 99.99% 99.00% 99.99% 99.00% 99.99% 99.99% Indominco Trubaindo Bharinto Kitadin Jorong TRUST ITMI PT Tambang Raya PT ITM Indonesia PT Indominco PT Truba

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