PT Indo Tambangraya Megah Tbk Public Expos é 3Q17 Performance Results Jakarta, 14 November 2017 1
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2
Highlights of 3Q17 and 9M17 results Coal sales Coal sales 16.5 Mt 5.6 Mt Down 3.6 Mt Up 0.1Mt -18% Y-Y +1% Q-Q Unit: US$ million 9M17 2Q17 3Q17 Q-Q 9M16 y-y 1,164 958 381 415 +9% +21% T otal Revenue 30% 26% 32% +6% 20% +10% Gross Profit Margin 267 71 107 +52% 105 +154% EBIT 310 84 123 +46% 142 +119% EBITDA 172 48 67 +39% 70 +147% Net Income $70.3 $68.5 $73.9 +8% $47.5 +48% ASP (USD/ton) 3
Towards a more sustainable integrated platform Acquired a fuel distributor 4.7 Mt reserves acquisition Improve fuel procurement Improved logistics management Strategic value capacity from from existing new equipment Evaluate potential third-party fuel infrastructure purchase marketing strategies CONTRACT RESERVES MINING FUEL DEVELOPMENT PROCUREMENT CUSTOMERS CAPITAL SOURCING SHIPPING BARGING BLENDING / LOGISTICS STOCKPILING THIRD PARTY OFFTAKE Target to trade 1Mt in 2017, 2Mt in 2018 Leverage on ITM’s existing infrastructure and marketing, sales, and logistics capabilities 4
4.7 Mt coal reserves acquisition HIGH QUALITY SIMILAR TO TRUBAINDO COAL Mahakam river Bunyut Port TIS 1.1 TCM 6,500 TCM 13.0 TCM TCM 0.8 6.0 6,400 TIS 5.9 TIS TCM TIS 9.6 CV % Total % Ash % Total (kcal/kg) Sulfur Moisture BEK ITM has acquired 70% stake in PT Tepian Indah Sukses (TIS). Total transaction value would be TIS $9.5M for 4.7 Mt (100% basis) reserves. 2 Mtpa starts in 2019 4.7Mt TIS has IUP operation license for concession area of 2,065 ha in East Kalimantan; adjacent to Trubaindo concession. TIS is a high CV concession with on-spec sulfur – increasingly difficult to acquire in Indonesia. ITM would utilize current infrastructure of Melak operation to minimize capex. 5
Fuel business: cost savings, new revenue stream Mahakam river IMM ITM has acquired a 75% stake in fuel MV distributor company named PT GasEmas 125,000 dwt Bunyut (PTGE) to supply diesel to ITM mine sites KTD and sell to 3 rd party customers TCM Samarinda Initiative will be to: 1) increase security of BEK supply of diesel to all ITM mines, 2) reduce cost and logistics premium, and 3) Other third party Balikpapan customers facilitate new revenues from 3 rd party customers Barito river 2016 OPERATING COST* Fuel cost represents 21% of ITM total $984 M operating costs (excl. royalty), mostly embedded in Mining and Transportation 44% Mining 16% 21% Fuel (Direct) Initiative will be introduced in stages as 2% 2% 3% 7% Transportation contracts are renegotiated. Overall fuel 34% Others** cost reduction target is approx. 5%. SG&A 12% JBG As shown in 2016 Fuel component audited report *excl. Royalty **incl. D&A, Maintenance, etc. 6
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 7
Operational summary 2017 2017 TARGET : 22.6 Mt QUARTERLY OUTPUT TREND Unit: Mt East 6.6 6.4 Kalimantan 5.7 Bharinto 5.4 5.1 Jorong INDOMINCO Kitadin 13.1 Mt Trubaindo Bunyut Port TRUBAINDO TD.MAYANG Indominco 5.1 Mt BHARINTO Samarinda 4Q16 1Q17 2Q17 3Q17 4Q17e KITADIN 4Q17e 4Q16 1Q17 2Q17 3Q17 2.5 Mt EMBALUT 1.0 Mt Balikpapan YEARLY OUTPUT TREND Central Kalimantan Unit: Mt Palangkaraya 29.4 29.1 28.5 South Kalimantan 25.6 22.6 Bharinto Jorong Kitadin Banjarmasin Trubaindo JORONG 0.9 Mt Indominco Jorong Port 2013 2014 2015 2016 2017e 2014 2015 2016 2017e 2013 8
Indominco Mandiri INDOMINCO 2017 TARGET: 13.1 Mt QUARTERLY UPDATES 3Q17 production slightly lower than target due to Operations rainy days affecting production at Indominco area. Ports Higher average S/R in 2017 to optimize coal reserves Hauling West Block S/R is higher due to lower output and Stockpile West Block pre-strip activities. ROM Crusher Mine stockpile stockyard QUARTERLY OUTPUT East Block Unit: Mt 3.8 Bontang City 3.7 3.4 3.4 W BLOCK 3.2 3.2 0.4 0.4 35Km 0.4 0.5 0.4 0.3 Sea conveyor 2.5Km 3.4 3.3 Asphalt haul 2.9 2.9 3.0 E BLOCK 2.8 road Post Santan River 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e Panamax Port stock Unit: Bcm/t yard 95,000 Avg 14.4 13.2 8.9 10.2 10.7 6.9 Inland DWT SR: 33.0 conveyor 4km 26.0 22.5 20.2 W BLOCK 13.4 11.1 11.3 11.1 8.3 9.1 9.4 E BLOCK 6.3 km 0 2 4 6 8 10 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e *SR based on FC coal **SR FY16 IMM: 8.3 , WB: 14.1 , EB: 7.4 9
Melak group – Trubaindo and Bharinto 2017 TARGET: TCM 5.1 Mt, BEK 2.5 Mt QUARTERLY UPDATES Trubaindo: 3Q17 production output was slightly lower than target due Mahakam to weather condition at Trubaindo area. River Bunyut Higher SR during 3Q17 mainly due to pre-stripping Port activities and optimized mine coal reserved. Continue hauling road improvement program from Product coal conveyor, East Kalimantan Trubaindo South Block to Bunyut port and expected to be stacking, stockpile completed by Dec 2017. 40km Bharinto: Mine to port 3Q17 production output was slightly lower than target due Operations to heavy rainfalls affecting mine production. Barge Port Kedangpahu SR expected higher in 4Q17 due to optimized coal reserved. Hauling River PT. Trubaindo QUARTERLY OUTPUT Stockpile 2.5 2.4 Unit: Mt 2.2 ROM 1.9 1.7 stockpile 0.8 1.5 0.7 North 0.6 BHARINTO 0.6 0.6 Block 0.5 Bharinto 60km 1.7 1.7 1.6 south west of 1.3 TRUBAINDO 1.1 1.0 Trubaindo North South Block 1 Block (Dayak Besar) 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e Unit: Bcm/t 9.8 9.1 Avg SR: South Block 2 6.5 6.2 5.7 5.5 BHARINTO (Biangan) 15.3 9.7 0 5 10 15 20 25 km 9.5 7.3 TRUBAINDO 8.8 8.0 PT. Bharinto 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e **SR FY16 TCM: 8.6 , BEK: 6.1 *SR based on FC coal 10
Kitadin Embalut and Tandung Mayang EMBALUT 2017 TARGET: EMB 1.0 Mt QUARTERLY UPDATES Kitadin Embalut: 3Q17 production achieved according to target TD. Mayang Kitadin Td.Mayang: Bontang city Continue mine closure activities including IMM WB IMM EB mine rehabilitation. ROM Bontang Port stockpile Embalut QUARTERLY OUTPUT 5km Mine to port Embalut Port Unit: Mt Mahakam TDM Samarinda River to Muara 0.3 0.3 0.1 0.2 0.2 0.1 Berau EMB 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e East Kalimantan Unit: Bcm/t to Muara Jawa Avg SR: Operations 16.5 14.0 Balikpapan EMB 13.1 Ports 12.1 11.3 12.9 Hauling Stockpile 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e 0 2 4 6 8 10 km Crusher *SR based on FC coal **SR FY16 EMB: 11.3 11
Jorong JORONG 2017 TARGET: 0.9 Mt QUARTERLY UPDATES 3Q17 production output was slightly lower than target due to weather condition. SR higher in 3Q17 due to transition of new mining contractor. Remaining mine reserves will be depleted by 2019 and Pelaihari mine closure plan already approved by government. QUARTERLY OUTPUT Unit: Mt Haul road 0.3 0.3 0.2 0.2 0.2 0.2 20km 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e Unit: Bcm/t Avg SR: 8.7 Jorong 6.8 6.7 5.7 5.1 5.0 Coal Operations terminal Java Sea 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17e Barge Port Hauling *SR based on FC coal ***SR FY16 JBG: 4.5 Stockpile 0 5 10 15 20 25 km 12
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 13
Global demand trends: 2017 vs 2016 CHANGE GEOGRAPHY COMMENTS 2017-16 (Mt.) Domestic supply continues struggle from disruptions caused by safety inspection Winter demand starts CHINA +10 Government policy on banning coal import continues Strong coal burn after monsoon on weak hydro and wind generations Domestic supply problems persist as key coal producing regions struggled with flooding INDIA -12 during monsoon season Low stocks will boost coal import but high international coal prices will limit purchase Strong coal burn in South Korea as government will carry out additional safety checks at OTHER +21 nuclear reactors and increased operation of coal plants recently added N.ASIA Japan and Taiwan imports remains strong Strong power prices, low renewable output in Germany and strong oil prices support coal market in Europe +5 EUROPE French nuclear reactor checks are helping underpin prices Nuclear and hydro constraints shape the outlook Malaysia, Philippines and Pakistan are the main drivers which expected to add almost 8 Mt of demand growth OTHERS +11 Chile and Mexico will drive growth in Americas Nuclear shut down and Chinese domestic supply tightness drive import demand in Asia +35 while nuclear outage in France and weak hydro drive demand in Europe. Strong GLOBAL demand is expected to continue into winter season in Q4. Note: Includes lignite but excludes anthracite
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