ANALYST BRIEFING FY19 PERFORMANCE RESULTS Jakarta, 28 th February 2020
Agenda 1 INTRODUCTION 2 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 3 2 4 FINANCIAL REVIEW 4 2 4 5 5 QUESTION & ANSWERS 2
Highlights of 4Q19 and FY19 results Coal sales Coal sales 25.3 Mt 6.5 Mt Up 1.8 Mt Up 0.0 Mt +8% Y-Y +0% Q-Q Unit: US$ million 4Q19 3Q19 FY19 Q-Q FY18 y-y 411 1,716 412 -0% 2,008 -15% Total Revenue 22% 19% 18% +4% 29% -10% Gross Profit Margin 46 38 +20% 180 432 -58% EBIT 62 53 +16% 242 497 -51% EBITDA 28 30 127 -6% 259 -51% Net Income $60.0 $61.7 -3% $64.6 $81.0 -20% Coal ASP (USD/ton) 3
2018 highlights 2019 Highlights ITM remained vigilant and adaptive 23.4 Mt 2.2 Mt $242 M in countering the effect of soft coal Coal production Maintained Coal trading price environment volume; volume sizeable +8% y-y +6% y-y EBITDA +27% 2.2 Mt 194 ML Organic and In-house mining Coal trading volume, Fuel distribution volume, inorganic contractor portion to increasing 3 rd parties sales recording 8% y-y growth ITM group increase portion 23.4 Mt 1.7 Mt 10.9x Operational Coal production volume Coal hauled at Melak Strip ratio reduction; performance increased by 6% y-y cluster sites by in-house decreased by 2% y-y mining contractor $242 M $64.6/t $57.7/t Financial performance EBITDA decrease Avg. Selling Price Coal business cost/ton -51% y-y -20% y-y decrease -3% y-y decrease 4 4
Strategies: 2020 & Beyond CORE BUSINESS COAL VALUE CHAIN COAL OPERATIONAL MARGIN ACROSS VALUE IMPROVEMENT CHAIN ▪ Continue cost efficiency initiatives through ▪ Maximize margin from coal trading mine plan optimization and overhead and coal blending operation to rationalization . improve product quality; increase coal trading from 2.2 mt to 2.8 mt . ▪ Expand TRUST scale and scope of ▪ Replicate recent Solar PV operation in Melak cluster area; increase coal hauling volume into 8 mtpa. construction to other ITM mine site to improve fuel usage efficiency at mine. ▪ Enhance exploration techniques and ▪ Expand fuel business sales portion practices especially for recently acquired of 3 rd party customers for better mines to ensure maximum organic reserve growth. margin and diversify the business. BUSINESS EXPANSION PROCESS ENHANCEMENT ▪ Actively seek inorganic expansion ▪ Transform current practice into smart opportunities especially for area in mining practice by utilizing acquired close proximity to current coal asset. digital capabilities and agile mind set. ▪ Maintain intracompany innovation ▪ Leverage ITM’s established generation platform and people infrastructure network to create development initiatives. business opportunities outside coal operation. 5 5
Renewable Power: Solar – Diesel Hybrid • 3MW new renewable solar power plant build at Indominco port area. • The solar power sits on 4 hectares of land and is assembled in hybrid configuration with diesel generator. • Objective is to improve fuel efficiency at site through reducing diesel generator usage during daylight time. • Also in line with our main shareholders vision of Greener & Smarter. • Currently for internal use only; equipped with 2MW battery energy storage system and micro-grid controls. • Power generated by solar power will be Coal mining operation injected to microgrid system to maintain to secure stable cash stable quantity and quality of power in the flow for future growth & grid at all times. Any excess of power acquisition generated during the day will be stored in the batteries. Battery management system ensure safe charge and discharge of the batteries. 6
Awards and achievements in 2019 Top 10 Best Platinum Awards for Best Responsibility Most Innovative Performance of of The Board Based Asia Sustainability Company in Mining Respect for Human on ASEAN CG Score Report (ASRRAT) Sector Rights Card 2019 From Business News From From National From Indonesia Television Station: IDX Foundation For Committee for Institue for Corporate Channel International Human Sustainable Reporting Directorship (IICD) Rights Reporting Standards (FIHRRST) 7
Agenda 1 INTRODUCTION 2 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 3 2 4 FINANCIAL REVIEW 4 2 4 5 5 QUESTION & ANSWERS 8
Operational Summary 2019-2020 2019 OUTPUT: 23.4 Mt 2020 TARGET: 19 - 20.1 Mt* OUTPUT TREND East Kalimantan Indominco 8.9 Mt Trubaindo Bunyut Port 4.3 Mt Kitadin – Embalut Samarinda Bharinto 1.6 Mt Balikpapan 2.6 - 3.7 Mt East Kalimantan Avg.S/R 13.2x 9.5x 9.3x 10.7x 11.1x 10.9x (bcm/t) Palangkaraya COMMENTS Central South Kalimantan Kalimantan ▪ 4Q19 total output was lower than target as Banjarmasin Jorong 1.7 affected by weather condition. 1.4 - 1.6 Mt ▪ Lower output target in 2020 as compared to 2019 and lower strip ratio for 2020 is expected. Jorong Port *) 2020 target subject to further government approval 9
2019 Operational Review • Indominco production volume 12.4 Mt • Embalut output of 1.4 Mt and in 2019. Jorong 1.6 Mt in 2019. • Rationalized capex spending by 87% • Embalut achieved Blue Level in 2019. while Jorong achieved Green • Construction of 3 MW solar PV plant Level for environmental management from Ministry of with battery storage capacity of 2 MW. Energy and Mineral Resources • Indominco received appreciation from KITADIN in December 2019. Indonesian government as a partner in protecting conservation areas. TRUBAINDO • Mine closure continuation in Td. INDOMINCO Mayang area. BHARINTO NPR • Established Digital Center of • Trubaindo output achieved 4.9 Mt Excellence (DCoE) to support and Bharinto achieved 3.0 Mt in 2019. transition from current mining JORONG • Trubaindo & Bharinto: rationalized capex practice into smart mining spending in Trubaindo by 67% and Bharinto practice. by 39% in 2019. • Setting up Melak Digital Center • Continue infrastructure upgrade further into (MDC) as a hub for smart Bharinto area (bridges, road, etc). mining and digital • Trubaindo and Bharinto achieved Blue Level for collaboration center in environmental management from Ministry of Melak area. Energy and Mineral Resources in December 10 2019.
Indominco Mandiri SCHEMATIC OUTPUT TREND 2020 target: 8.9 Mt Unit: Mt Operations Ports Hauling W Block Stockpile West Block ROM Crusher Mine stockpile stockyard E. Block East Block Bontang City 35Km Sea conveyor Avg.S/R 13.9x 9.9x 10.2x 10.2x 11.4x 11.5x (bcm/t) 2.5Km Asphalt haul 14.9x 22.7x 12.8x 13.2x 24.4x 18.8x - W. Block : road 10.2x 10.1x - E. Block : 13.7x 7.5x 9.6x 9.1x Post Santan River Panamax Port stock COMMENTS yard 95,000 Inland DWT ▪ conveyor 4km 4Q19 production was slightly lower than target due to weather condition. ▪ Indominco 1Q20 production target expected to be significantly lower mainly due to continued severe km weather conditions. 0 2 4 6 8 10 11
Melak group – Trubaindo and Bharinto SCHEMATIC OUTPUT TREND 2020 target: TCM 4.3 Mt Unit: Mt Mahakam BEK 2.6 - 3.7 Mt River Bunyut Port Bharinto Product coal East Kalimantan conveyor, stacking, stockpile 40km Trubaindo Mine to port Operations Barge Port Kedangpahu Hauling River S/R (bcm/t) 12.9x 10.5x 9.5x 11.4x 12.2x 11.6x PT. Trubaindo - Trubaindo : Stockpile - Bharinto : 12.2x 10.2x 8.4x 9.9x 9.7x 9.5x ROM stockpile North COMMENTS Block Bharinto 60km South Block 1 ▪ Trubaindo: south west of (Dayak Besar) Trubaindo North ▪ 4Q19 production achieved as according to target. Block 2020 target to be lower than 2019; lower strip ratio PT. TIS in 2020. South Block 2 ▪ Road & bridge construction continues in 2020. (Biangan) ▪ Bharinto: 0 5 10 15 20 25 km ▪ 4Q19 production achieved as targeted. Higher PT. Bharinto production volume is expected in 2020. ▪ Further construction of road and improvement 12 of port infrastructure continues in 2020.
Kitadin Embalut and Tandung Mayang SCHEMATIC OUTPUT TREND 2020 target: EMB 1.6 Mt Unit: Mt TD. Mayang Bontang city IMM WB IMM EB ROM Bontang Port stockpile Embalut 5km Mine to port S/R (bcm/t) Embalut Port 11.9x 8.6x 8.1x 16.9x 10.7x 9.8x - Embalut : Mahakam Samarinda River to Muara Berau COMMENTS East Kalimantan ▪ Kitadin Embalut: to Muara Jawa ▪ 4Q19 production achieved as according to target. Operations ▪ 1Q20 Strip ratio expected to be higher due to Balikpapan Ports pre-strip activities and bad weather condition. Hauling ▪ Kitadin Td.Mayang: Stockpile ▪ Continue mine closure activities including mine 0 2 4 6 8 10 km Crusher rehabilitation activities. 13
Jorong SCHEMATIC OUTPUT TREND 2020 target: 1.4 – 1.6 Mt Unit: Mt Pelaihari Haul road 20km 10.5x 6.7x 6.0x 9.5x 6.3x 7.5x S/R (bcm/t) : Jorong COMMENTS Coal ▪ 4Q19 production achieved according to target. Operations terminal Java Sea Barge Port ▪ Overall strip ratio for 2020 will be lower than 1Q20 Hauling numbers. Stockpile 0 5 10 15 20 25 km 14
Agenda 1 INTRODUCTION OPERATIONAL 2 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 3 2 4 FINANCIAL REVIEW 4 2 4 5 5 QUESTION & ANSWERS 15
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