Pt Indo Tambangraya Megah Tbk · IDX:ITMG

Pt Indo Tambangraya Megah Tbk — Q2 2018 Earnings Presentation

35 slides from Pt Indo Tambangraya Megah Tbk's earnings presentation, Aug 16, 2018

  1. Slide 1: Analyst Briefing 2Q18 Performance Result

    PT Indo Tambangraya Megah Tbk ANALYST BRIEFING 2Q18 PERFORMANCE RESULT Jakarta, 16 August 2018 1

  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 2Q18 and 1H18 results

    Highlights of 2Q18 and 1H18 results Coal sales Coal sales 5.3 Mt 9.6 Mt Up 0.9Mt Down 1.3 Mt +20% Q-Q -12% Y-Y Unit: US$ million 1Q18 2Q18 Q-Q 1H17 1H18 y-y Total Revenue 378 431 +14% 749 809 +8% Gross Profit Margin 29% 27% -2% 28% 28% 0% EBIT 88 79 -10% 160 167 +4% EBITDA 102 93 -9% 188 196 +4% Net

  4. Slide 4: New Coal Reserves Acquisition

    New Coal Reserves Acquisition Bunyut MEDIUM-HIGH CV COAL CONCESSION Port TCM 6,500 1.0 8.6 0.8 19.4 NPR 5,500 NPR 13.0 6.0 TCM CV GAR Sulfur Ash Moisture (kcal/kg) (%) (%) (%) TIS BEK  Acquired 100% stake in PT Nusa Persada Resources (NPR). Total transaction value was $30M for 77 Mt Central Kaliman

  5. Slide 5: Strengthening our premium coal portfolio

    Strengthening our premium coal portfolio INDONESIAN THERMAL COAL EXPORT ITM RESERVES BREAKDOWN BY QUALITY BY QUALITY 5,600-6,200 kcal/kg JBG (4,200-5,000 kcal/kg) 5% 5,000-5,600 kcal/kg 2% 11% NPR (5,000-5,600 kcal/kg) 24% <4,200 kcal/kg 36% 41% BEK 385 Mt KTD 1% 327 Mt (5,600-6,200 kcal/kg) 1% TIS

  6. Slide 6: ITM Coal Strategy: progress and way forward

    ITM Coal Strategy: progress and way forward 3Q17 4Q17 1Q18 2Q18 onward Reserves ITM organic Reserves acquisition in acquisition (TIS) reserves Central Kalimantan +4.7 Mt +77 Mt +77 Mt VALUE OPERATION $3/bbl $40 M Target fuel cost Capex for mining reduction from fleet expansion acquisition of PTGE of

  7. Slide 7: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 7

  8. Slide 8: Operational Summary 2018

    Operational Summary 2018 2018 TARGET : 22.5 Mt QUARTERLY OUTPUT TREND East Unit: Mt Kalimantan 6.1 6.0 5.7 Bharinto 5.2 Jorong INDOMINCO 4.1 Kitadin 13.1 Mt Trubaindo Bunyut Port TRUBAINDO TD.MAYANG Indominco 4.6 Mt BHARINTO Samarinda KITADIN 3Q17 4Q17 1Q18 2Q18 3Q18e 2.7 Mt 3Q17 4Q17 1Q18 2Q18 3Q18

  9. Slide 9: Indominco Mandiri

    Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2018 target: 13.1 Mt Operations  2Q18 production was close to target due to weather Ports condition and pre stripping activities. Hauling  Average strip ratio in 2018 is expected to be lower West Block Stockpile than 2017 due to higher contribution fro

  10. Slide 10: Melak group – Trubaindo and Bharinto

    Melak group – Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2018 target: TCM 4.6 Mt  Trubaindo: Mahakam BEK 2.7 Mt River  2Q18 production output slightly higher than Bunyut target. Port Product coal conveyor,  Continue hauling road improvement program East Kalimantan stacking, from Trubaindo

  11. Slide 11: Kitadin Embalut and Tandung Mayang

    Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2018 target: EMB 1.0 Mt  Kitadin Embalut:  2Q18 production achieved according to target. TD. Mayang  Further study to optimize coal reserves. Bontang city IMM WB IMM EB  Kitadin Td.Mayang:  Continue mine closure activities including

  12. Slide 12: Jorong

    Jorong SCHEMATIC QUARTERLY UPDATES 2018 target: 1.1 Mt  2Q18 production achieved according to target.  Additional reserves from river diversion project would extend the life of the mine beyond 2019. Pelaihari  Permit requirement by government is continue in progress. QUARTERLY OUTPUT Haul road Un

  13. Slide 13: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 1313

  14. Slide 14: Positive outlook for 2018

    Positive outlook for 2018 1H18 2H18 OUTLOOK Strong demand and tight supply Supply tightness continues especially continued to drive coal price shortage of high quality product China China  Economy  Chinese government  Regulation (safety) intervention continues  Colder-than-expected winter, early

  15. Slide 15: Demand and supply trends

    Demand and supply trends DEMAND – REMAINS STRONG SUPPLY – DIFFICULT TO INCREASE CAPACITY HIGH ECONOMIC GROWTH CONSTRAINTS ON EXPECTATION NEW CAPACITY EXPANSION Rising prosperity drives an increase Not only economics, but also in energy demand environmental and social issues BALANCE BETWEEN ECONOMICS

  16. Slide 16: Medium term demand and supply outlook

    Medium term demand and supply outlook KEY DEMAND COUNTRIES KEY SUPPLY COUNTRIES SEA INDONESIA Coal remains as most Growing domestic demand competitive power sources could limit future exports +31 +18 SEA INDONESIA INDIA Domestic coal could not +23 AUSTRALIA meet demand growth INDIA Consolidation and

  17. Slide 17: China: tight supply continues in the short term

    China: tight supply continues in the short term CHINA DOMESTIC COAL TRADE FLOW Heilongjiang Jilin 2Q18  Reintroduced import coal ban at tier-2 port in Liaoning Beijing April reverses domestic coal prices Inner Inner Mongolia Mongolia 600 Mt significantly Tianjin Hebei Northern  Strengthened demand

  18. Slide 18: India: robust demand amid supply deficit

    India: robust demand amid supply deficit COASTAL DEMAND AND COAL INFRASTRUCTURE IN INDIA 2Q18 Coal fields Coal ports  Higher temperature and demand from non- New railway capacity power sector keep domestic market in Under construction Proposed supply deficit  Domestic coal supply still not suffici

  19. Slide 19: ITM coal sales 1H18

    ITM coal sales 1H18 COAL SALES BREAKDOWN BY DESTINATION COAL SALES 1Q18 1.5 Mt 1.7 Mt Italy Others Bangladesh Hongkong 0.5 Mt 2% Taiwan 2% 2% 3% Japan 4% 18% Vietnam 0.2 Mt 5% 1.1 Mt KOREA ITALY CHINA Korea 0.7 Mt 0.2 Mt 5% China 0.4 Mt 0.6 Mt HK 1.5 JAPAN Thailand 15% 1.2 Mt 6% TAIWAN 0.2 Mt INDIA

  20. Slide 20: Indicative coal sales 2018

    Indicative coal sales 2018 COAL SALES CONTRACT AND PRICING STATUS Contract Status Price Status Uncontracted Unsold 13% Unpriced 13% 2% 58% Fixed Indexed 27% Contracted Contracted 87% TARGET SALES 2018: 25.0 Mt 20

  21. Slide 21: ITM ASPs vs thermal coal benchmark prices

    ITM ASPs vs thermal coal benchmark prices ITM ASP VS BENCHMARK PRICES Monthly NEX COMMENTS 200 Unit: US$/ton 150  2Q18 ASP continued firm according to supply 100 tightness. 50 150 0 – ITM ASP: US$78.3/t* (-6% QoQ) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 – NEX (Aug 10, 2018)**: US$119

  22. Slide 22: Agenda

    Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 22 22

  23. Slide 23: Sales Revenue

    Sales Revenue Unit: US$ million +14% QoQ +13% YoY 431 381 378 42 Others +44% (QoQ) ; +131% (YoY) 18 18 Jorong +16% (QoQ) ; +79% (YoY) 10 29 15 21 Kitadin +28% (QoQ) ; +44% (YoY) 15 16 62 61 Bharinto +2% (QoQ) ; +1% (YoY) 61 Trubaindo +8% (QoQ) ; +1% (YoY) 124 126 117 Indominco +11% (QoQ) ; +5%(YoY)

  24. Slide 24: Average Gross Margin

    Average Gross Margin Unit : US$ Million 431 Revenue GPM* (%) 381 378 247 234 221 124 126 117 62 61 62 41% 38% 36% 32% 38% 31% 21 41% 32% 15 16 15 18 28% 37% 42% 42% 10 48% 49% 29% 26% 33% 41% 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 Indominco Trubaind

  25. Slide 25: Cost Analysis

    Cost Analysis WEIGHTED AVERAGE STRIP RATIO PRODUCTION COST Avg. FY16 : 8.7 Unit: US$/t Avg. FY16: $28.8/t Unit: Bcm/t Avg. FY17 : 11.2 Avg. FY17: $39.2/t 12.3 12.1 12.0 10.4 10.8 50.0 43.1 47.2 37.7 39.4 Others 48.0 Coal 44.0 39.1 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 FUEL PRICE TOTAL CO

  26. Slide 26: EBITDA

    EBITDA Unit: US$ million -9% QoQ +11% YoY 102 93 84 4 6 Others +41% (QoQ) ; n.m (YoY) 1 0.6 7 1 Jorong -25% (QoQ) ; -48% (YoY) 2 8 Kitadin +21% (QoQ) ; +143% (YoY) 3 16 13 15 Bharinto -8% (QoQ) ; +11% (YoY) 19 32 20 Trubaindo -37% (QoQ) ; +9% (YoY) 51 42 44 Indominco +4% (QoQ) ; -14%(YoY) 2Q17 1Q18

  27. Slide 27: Net Income

    Net Income Unit: US$ million -24% QoQ -8% YoY 58 1 48 4 44 1 1 Jorong +90% (QoQ) ; +2% (YoY) 3 12 4 Kitadin -1% (QoQ) ; +43% (YoY) 9 10 Bharinto -13% (QoQ) ; +17% (YoY) 18 10 Trubaindo -29% (QoQ) ; +28% (YoY) 13 33 27 22 Indominco -19% (QoQ) ; -33%(YoY) 1 (0.3) (3) Others n.m(QoQ) ; n.m (YoY) 2Q17 1

  28. Slide 28: Balance Sheet

    Balance Sheet KEY RATIOS CASH POSITION Unit: US$ million Net Gearing (%) 374 Net D/E (times) 328 268 268 226 (26%) (32%) (36%) (39%) (30%) (0.26) (0.32) (0.36) (0.39) (0.30) 2014 2015 2016 2017 2Q18 2014 2015 2016 2017 2Q18 DEBT POSITION Unit: US$ million 0 0 0 0 0 2014 2015 2016 2017 2Q18 28

  29. Slide 29: 2018 Capital Expenditure Plan

    2018 Capital Expenditure Plan Units: US$ million 3.2 Indominco 16.0 7.1 Trubaindo Realized up to Jun 2018 20.8 2018 Capex plan 1.6 Bharinto 22.7 0.1 Jorong 5.9 3.9 TRUST 40.0 16.7 ITM Consolidated 107.1 29

  30. Slide 30: Thank you Question & Answer

    Thank you Question & Answer 30

  31. Slide 31: Appendices

    Appendices 3131

  32. Slide 32: Income Statement

    Income Statement Unit: US$ thousand 2Q18 1Q18 QoQ% Net Sales 430,649 378,247 14% Gross Profit 114,692 111,053 3% GPM 27% 29% SG&A (35,833) (23,350) EBIT 78,859 87,703 -10% EBIT Margin 18% 23% EBITDA 93,405 102,252 -9% EBITDA Margin 22% 27% Net Interest Income / (Expenses) 606 822 FX Gain / (Loss) (3

  33. Slide 33: Income Statement

    Income Statement Unit: US$ thousand 1H18 1H17 YoY% Net Sales 808,896 748,784 8% Gross Profit 225,745 212,543 6% GPM 28% 28% SG&A (59,183) (52,865) EBIT 166,562 159,678 4% EBIT Margin 21% 21% EBITDA 195,657 187,655 4% EBITDA Margin 24% 25% Net Interest Income / (Expenses) 1,428 1,303 FX Gain / (Loss)

  34. Slide 34: ITM Structure

    ITM Structure Banpu 65% INDONESIAN STOCK 35%* EXCHANGE Public ITMG PT Indo Tambangraya Megah Tbk. IPO 18th Dec 2007 99.99% 99.99% 99.00% 99.99% 99.00% 70.00% 99.99% 99.99% 99.99% Indominco Trubaindo Bharinto Embalut Jorong TIS NPR TRUST ITMI PT Tambang Raya PT ITM Indonesia PT Indominco PT Trubaindo

  35. Slide 35: Rainfall 2013-2018

    Rainfall 2013-2018 INDOMINCO TRUBAINDO & BHARINTO Unit: Millimeter Unit: Millimeter • Except for Jorong, this year ITM’s mines have seen 800 800 700 700 700 600 relatively mild rainfall 600 500 600 500 500 compared to their 5-year 400 400 400 300 average levels. 300 300 200 200 100 200 100 100 • Rai

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