Singapore Exchange Ltd. · SGX:S68
Singapore Exchange — Straits Asia Resources — Non-Deal Roadshow (September 2008)
32 slides from Singapore Exchange's roadshow presentation, September 2008
Slide 1: Straits Asia Resources Limited Management Presentation
Straits Asia Resources Limited (In the process of name change to “SAR Resources Limited”*) Management Presentation September 2008 * Subject to shareholder approval
Slide 2: Straits Asia Resources – continuing to add value
Straits Asia Resources – continuing to add value 2006 2007 2008 2009 and Beyond Production Targets Growth Global Producer Acquisitions Jembayan, Sebuku and Seller Jembayan Thermal and SAR Listed Exploration Metallurgical Coal Northern Sebuku Laung Organic and Laung Acquisition Growth Acquiring 50Mtp
Slide 3: Straits Asia Resources – continues to outperform
Straits Asia Resources – continues to outperform 700 February 2008 100 October 2007 Sebuku resource August 2008 increase May 2007 Placement to raise Reserve and 90 Resource increase 600 US$ 102m Richard Ong, at Jembayan appointed CEO 80 Jan 2007 500 record 3.5Mt 70 Sales July 2007 Price (rebased to
Slide 4: SAR Strategy
SAR Strategy Foundations of the SAR Strategy Seaborne coal market will grow significantly over the next 5 years – from 605Mtpa to an estimated 735Mtpa Coal will remain a core fuel for electricity generation - its use will increase Costs will increase as existing coalfields mature, stripping ratios i
Slide 5: Strong market fundamentals
Strong market fundamentals Past Performance Reflects Fundamentals Record Coal Prices $250 Record coal prices in 2008 reflect strong underlying fundamentals $200 Spot Coal US$ per tonne Coal equities have outperformed their peers $150 Imbalance between global coal supply and $100 demand $50 Forward m
Slide 6: Outlook for thermal coal remains positive
Outlook for thermal coal remains positive Increase in Price due to Structural Shortages Thermal Coal Price Forecasts (US$/t) OMM Upward Pressure on Prices NTR Global energy demand forecast to grow by more than half over the next 25 NRM years, coal use rising most in absolute terms (Source: IEA) NOR
Slide 7: Transformation into a Global Coal Player
Transformation into a Global Coal Player
Slide 8: Acquiring a global footprint
Acquiring a global footprint Brunei Interest Exclusive exploration MoU Jembayan Similar coal qualities to Indonesia Production target - 5Mt (08) / 7Mt (09) Target JORC Resources ~end 2009 Expandable infrastructure Thermal and Metallurgical coal 92Mt of Reserves Exploration Target of 300Mt -350Mt The
Slide 9: Delivering strong performance and enhancing future upside
Delivering strong performance and enhancing future upside Increasing Production Upside in Pricing 2008 2009 11.0 Mt 12 10 9.0 Mt US$104/t 8 3.6 Mt Mtpa 6 US$70.5/t 4 3.4 Mt 7.4 Mt 2 9.0 Mt 0 2007 2008 (target) 2009 (target) Sebuku Jembayan Priced and contracted Unpriced Infrastructure upgrades will
Slide 10: Delivering strong performance and enhancing future upside
Delivering strong performance and enhancing future upside Reserves Resources 120 111 Mt 522 Mt 600 100 500 342 Mt 80 400 59 Mt Mtpa Mtpa 60 300 40 200 ` 20 100 - - 2007 2008 2007 2008 Sebuku Jembayan Sebuku Jembayan Jembayan Madagascar Recently upgraded the Coal Resource at Jembayan to 138 Mt Explor
Slide 11: 2009 and Beyond
2009 and Beyond 2009 2010 2011 Production and further Sebuku study for long-term Additional Production from Northern and Western Leases development Drilling of the unexplored Jembayan Production increases 85% of the Concession area Laung Potential Metallurgical coal Continued exploration and feasibi
Slide 12: Diversification of product and markets served
Diversification of product and markets served Straits Asia Resources A balanced portfolio of operations, development and exploration Projects close to the markets that they sell into Jembayan Brunei Interest Country risk diversification Jembayan Similar to Indonesian coals Geological risk diversific
Slide 13: Acquisition of Brunei and Madagascar Interest
Acquisition of Brunei and Madagascar Interest Madagascar High quality coal that will be readily accepted by the market and type similar to South African coal exported through Richards Bay Satisfy European, Indian and African markets Suitable for a minimum 3 to 5 Mtpa operation Pursuing work programm
Slide 14: Key transaction terms
Key transaction terms Madagascar Acquisition from Straits Resources Effective 29% project interest Payment terms: Option to move to 80% for US$0.60/t — 10% Deposit paid; of JORC Resource above 100mt, US$92.1m subject to a maximum of 400mt — 25% on Demerger completion (US$180m), within 2 years (early
Slide 15: Building a more dynamic corporate structure
Building a more dynamic corporate structure SAR Pre-Restructure Secondary ASX listing oÉã~áåáåÖ= ÜçäÇÉêëI= Widens the investor base NNKPMB Broadens research coverage qçé=NN=J=RM= píê~áíë= ÜçäÇÉêëI= oÉëçìêÅÉë= Free Float = 52.9% Increases visibility OMKORB iáãáíÉÇI= QTKNMB Gives direct comparison to
Slide 16: Management team strengthened
Management team strengthened Board of Directors Key Executive Management Team Mr Milan Jerkovic, Non-executive Chairman Finance/Strategy — To become the Executive Chairman* — James Carter, Chief Financial Officer Mr Richard Ong Chui Chat, Chief Executive Officer and Executive — Graeme Tivey, Group M
Slide 17: Ample financing flexibility
Ample financing flexibility Funding Requirements — US$230m acquisition bridge facility raised December 2007 (matures December 2008) — Used for acquisitions of Jembayan and Sebuku Northern Leases — US$100m required for Brunei and Madagascar acquisition (staged payments) — Capital expenditure Substant
Slide 18: Restructure Update
Restructure Update 4 Straits Asia | Resources
Slide 19: Restructure timeline
Restructure timeline Sale & Purchase Lodged Information Agreement Memorandum with Completion of Brunei and annonunced ASX Madagascar acquisitions Dividend payment Trading on ASX commences SAR SAR Shareholders‘ Meeting 15 22 24 28 30 16 30 days from Demerger Aug Aug Sep Sep Sep Oct completion SRL Sha
Slide 20: SAR shareholders meeting
SAR shareholders meeting Resolutions Approval threshold 1 Acquisition of Brunei and Madagascar coal interests 50% SRL unable to vote 2 Issue of 1.5m SAR shares to Milan Jerkovic 50% Milan Jerkovic undertaking not to vote 3 Issue of 1.0m SAR shares to Richard Ong 50% Richard Ong undertaking not to vo
Slide 21: Appendices
Appendices Comparable Analysis SAR Results Update
Slide 22: Comparables analysis
Comparables analysis Analyst Estimates Asset Reserves Mine Geographical Coal Pure Production 2008 EV/EBITDA EV/EBITDA Company Location (mt)* Diversification Diversification Play (mt)** P/E 2008 P/E 2009 2008 2009 Bumi Resources Indonesia 1,402 Y N N 58.0 13.0 x 8.1 x 6.6 x 3.9 x PTBA Indonesia 1,825
Slide 23: Highlights
Highlights 2nd Quarter Report 2008 Financial Q2 Profit after tax $36.3 million up 410% (H1 2008 Profit $56.39 million up 263%) Q2 EBITDA $64.1 million up 620% (H1 2008 EBITDA $103.7 million up 404%) Operations Record Q2 coal production of 2.3 million tonnes up 271% (H1 production of 4.5 million tonn
Slide 24: Financial results
Financial results Key Financial Data US$m Q2 2008 Q2 2007 Change H1 2008 H1 2007 Change Revenue 159.6 69.5 130% 264.6 138.7 91% Profit after tax 36.3 7.1 410% 56.4 15.5 264% EBITDA 64.1 8.9 620% 103.7 20.6 403% Earnings per share 3.32 0.77 331% 5.17 1.69 206% Dividends per Share (USc) 0.81 0.80 1% 0
Slide 25: Financial results
Financial results Profit after tax Overall increase in Q2 profit after tax of 410% driven by: Increases in coal sales volume from 0.65mt to 2.16mt Increase in overall group ASP by 80% in Q2 2008 compared to Q2 2007 Fuel price increased by 58% in Q2 2008 compared to Q2 2007 Commodity sales on behalf
Slide 26: Financial results – Cashflow
Financial results Cashflow US$m Q2 2008 Q2 2007 H1 2008 H1 2007 Operating cash inflows 66.9 18.6 75.9 17.6 Payments for plant and equipment (20.1) (7.1) (26.2) (9.1) Other investing cash outflows 14.9 (4.1) 13.5 (8.4) Net cash flows from financing (4.7) (5.8) (4.8) (6.4) Net increase/(decrease) in c
Slide 27: Financial results – Balance Sheet
Financial results Balance Sheet US$m June-08 Mar-08 Dec-07 Cash and cash equivalents 87.6 30.6 29.1 Other current assets 92.9 78.3 100.6 Non-current assets 594.3 594.3 593.8 Total assets 774.8 703.2 723.5 Bridge loan 220.0 220.0 220.0 Other current liabilities 122.0 88.5 129.3 Non-current liabilitie
Slide 28: Sebuku coal operation
Sebuku coal operation Record H1 production result in wet season Sebuku Rainfall 000’s Q2 2008 Q2 2007 H1 2008 H1 2007 Waste movement (bcm) 4,597 5,236 9,422 10,860 Coal mined (kt) 1,064 694 2,335 1,699 Product coal (kt) 1,009 623 1,960 1,457 Coal sales (kt) 1,079 652 1,929 1,503 Strong production re
Slide 29: Jembayan coal operation
Jembayan coal operation Developing into a long life world class asset June 2008 000’s Q2 2008 H1 2008 Measured Indicated Inferred Total (Mt) Waste movement (bcm) 10,514 21,882 Resources - 138 - 138 Coal mined (kt) 1,189 2,386 Proved Probable Total Marketable Product coal (kt) 1,301 2,498 Coal sales
Slide 30: Jembayan underpinning growth
Jembayan underpinning growth Production Already at over 5mtpa Will be doubled to 11Mtpa by Capacity end 2009 Increased from 38Mt to 92Mt: Reserves 85% of the site is still to be assessed Proving to be a world class asset PM
Slide 31: Exploration: Laung coal
Exploration: Laung coal 20,110 hectares in Central Kalimantan Close to BHPB’s Maruwai coal project in Central Kalimantan Contains outcrops of high quality Eocene Metallurgical coal and Miocene thermal coal Drilling activities commenced in mid-June By the end of June a single hole drilled to depth of
Slide 32: Important Notice
Important Notice Nothing in this presentation constitutes an offer of securities for sale in Singapore, the United States (the “US"), the United Kingdom, Hong Kong, Indonesia, Japan, Australia, France, Germany, Italy, Netherlands, Ireland, the European Economic Area (“the EEA”) or any other jurisdic
Straits Asia Resources — Non-Deal Roadshow (September 2008) on 6ix