PT Indo Tambangraya Megah Tbk ANALYST BRIEFING 1Q18 PERFORMANCE RESULTS Jakarta, 16 May 2018
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2
Highlights of 1Q18 results Coal Sales: 4.4 Mt Down 2.1 Mt Down 1.0 Mt -32% Q-Q -19% y-y Unit: US$ million y-y 1Q18 4Q17 1Q17 Q-Q +3% 379 526 368 -28% T otal Revenue -2% 29% 31% -1% 30% Gross Profit Margin -2% 89 -28% 88 121 EBIT -4% 103 -28% 99 137 EBITDA +2% 58 80 57 -28% Net Income $67.5 +3% +24% $83.6 $80.8 ASP (USD/ton) 3
Highlight of 1Q15 Highlights of 1Q18 BOARD OF COMMISIONERS ANNUAL GENERAL MEETING OF SHAREHOLDERS Somsak Sithinamsuwan Somruedee Chaimongkol Rudijanto Boentoro Commissioner (New Member) Commissioner Commissioner Prof. Djisman Simandjuntak President Commissioner & Independent Prof. Djoko Wintoro, PhD Fredi Chandra Mahyudin Lubis Commissioner (New Member) Commissioner Commissioner Annual General Meeting of Shareholders BOARD OF DIRECTORS conducted on 23 Mar 2018 declared total final dividend of USD 252 Mln or 100% of the Company’s 2017 Net Profit after tax, which payment are as follows: In the amount of USD 105 Mln or equal to IDR 1,300 per share has Kirana Limpaphayom Jusnan Ruslan Stephanus Demo Wawin A.H Bramantya Putra President Director Director Director Director been distributed as interim dividend on 21 Nov 2017 The remaining amount of USD 147 Mln or equivalent to IDR 1,840 per share was paid on 20 Apr 2018 Padungsak Thanakij Mulianto Ignatius Wurwanto Yulius K.Gozali Director (New Member) Director Director Director 4
Synergy: coal business focus HARD SYNERGY (INPUTS) SOFT SYNERGY (SKILLS) WITHIN BUSINESS UNIT CONTRACT MINING COAL MARKETING ARBITRAGE COAL MINING SYNERGY In-house contract Secure third party coal for Sharing of market insights Cross-fertilization of UG mining at ITM blending and trading and mechanism mining expertise Target 30% Enable quality upgrade [Enhance Development of RESULTS of ITM’s OB and enhance pricing competitiveness and UG mining at Indonesian removal volume through blending add value] operations ACROSS BUSINESS UNIT SYNERGY ESCM COAL MINING POWER ITM-BPP Sharing of coal mining Supply diesel for Sharing of power Additional margins from expertise ITM internal use operational expertise other business Optionality for reserves Target fuel cost Improve coal RESULTS Develop renewable energy optimization reduction by $3/bbl productivity at several locations OPERATIONAL DEVELOPMENT 5
ITM growth strategy CONTRACT MINING COAL TRADING Growing internal contribution Blending for value-added Focusing on growing organically. Leveraging ITM’s extensive Currently conducting a further network to enable this asset- study to increase capacity to light strategy. work at Melak cluster. COAL MINING Organic and inorganic growth 77 Mt from drilling and exploration 4.5 Mt from TIS acquisition Evaluating more opportunities FUEL PROCUREMENT POWER GENERATION Cost control and additional margin Conventional and renewables ITM’s fuel business initial focus Focusing on renewable energy, has been on supplying internal such as solar PV, hydro, etc. consumption. Going forward, will also build capacity to grow 3 rd party sales. 6
Organic growth provides additional reserves at a relatively attractive price SIMPLIFIED AND ILLUSTRATIVE Drilling boundary • Current reported reserves/resources OB are based on current exploration • Does not include potential reserves, which could be proven by doing more exploration Exploration • More exploration can confirm and identify more resources/reserves 77 Mt • Also increases optionality to convert more resources into reserves additional reserves • $7-8 M p.a. drilling and exploration capex • Options to increase reserves with updated economics, technology Optimization • Productivity, efficiency, and Optimization additional margins along the value chain would also lead to better economics and in turn, more reserves 7
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 8
Operational summary 2018 QUARTERLY OUTPUT TREND 2018 TARGET : 22.5 Mt Unit: Mt East Kalimantan 6.0 5.7 5.0 5.1 INDOMINCO 4.4 Bharinto 13.1 Mt Jorong Kitadin Trubaindo Bunyut Port TRUBAINDO TD.MAYANG 4.6 Mt Indominco BHARINTO Samarinda KITADIN 2.7 Mt 2Q17 3Q17 4Q17 1Q18 2Q18e 4Q17 1Q18 2Q18e 2Q17 3Q17 EMBALUT 1.0 Mt Balikpapan Central YEARLY OUTPUT TREND Kalimantan Unit: Mt Palangkaraya 29.1 South Kalimantan 28.5 25.6 22.5 22.1 Bharinto Jorong Banjarmasin Kitadin Trubaindo JORONG 1.1 Mt Indominco Jorong Port 2014 2015 2016 2017 2018e 2018e 2014 2015 2016 2017 9
Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 2018 target: 13.1 Mt 1Q18 production was slightly lower than target Operations due to weather condition affecting the mine Ports production. Hauling Average strip ratio in 2018 is expected to be Stockpile West Block higher than 2017 to optimize coal reserves. ROM Crusher Mine stockpile stockyard QUARTERLY OUTPUT East Block Unit: Mt 3.4 Bontang City 3.2 3.2 2.9 W BLOCK 35Km 0.5 0.4 0.4 2.3 0.3 0.1 Sea conveyor 2.5Km Asphalt haul 2.9 2.8 2.8 E BLOCK 2.6 2.2 road Post Santan River 2Q17 3Q17 4Q17 1Q18 2Q18e Panamax Port stock Unit: Bcm/t yard 95,000 Avg 13.3 13.1 11.9 12.2 10.7 Inland DWT SR: conveyor 4km 26.7 23.3 25.1 20.2 W BLOCK 12.4 11.9 11.2 11.0 11.1 E BLOCK 9.4 km 0 2 4 6 8 10 2Q17 3Q17 4Q17 1Q18 2Q18e *SR based on FC coal **SR FY17 IMM: 11.8 , WB: 23.9 , EB: 10.2 10
Melak group – Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2018 target: TCM 4.6 Mt Trubaindo: Mahakam BEK 2.7 Mt 1Q18 production output slightly above than target. River Bunyut Continue hauling road improvement program from Port Trubaindo to Bharinto area, expected to be completed Product coal conveyor, by mid of 2018. East Kalimantan stacking, Bharinto: stockpile 1Q18 production was close to target despite weather 40km condition affecting mine production. Mine to port Operations Barge Port Kedangpahu Hauling River QUARTERLY OUTPUT PT. Trubaindo Stockpile Unit: Mt 2.1 ROM 1.9 1.7 1.5 1.5 stockpile BHARINTO 0.6 North 0.6 0.7 0.5 0.5 Block Bharinto 60km 1.5 1.3 TRUBAINDO 1.0 1.0 1.0 south west of Trubaindo North South Block 1 2Q17 3Q17 4Q17 1Q18 2Q18e Block (Dayak Besar) Unit: Bcm/t 12.2 10.6 10.5 Avg SR: 8.3 7.8 South Block 2 BHARINTO (Biangan) 15.3 12.9 12.6 9.7 9.4 TRUBAINDO 0 5 10 15 20 25 km PT. Bharinto 2Q17 3Q17 4Q17 1Q18 2Q18e *SR based on FC coal **SR FY17 TCM: 10.9 , BEK: 8.6 11
Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2018 target: EMB 1.0 Mt Kitadin Embalut: 1Q18 production achieved according to target TD. Mayang Further study to optimize coal reserves Bontang city Kitadin Td.Mayang: IMM WB IMM EB Continue mine closure activities including ROM Bontang mine rehabilitation. Port stockpile Embalut QUARTERLY OUTPUT 5km Mine to port Embalut Port Unit: Mt Mahakam TDM Samarinda River to Muara 0.3 0.3 0.2 0.2 0.2 Berau EMB 2Q17 3Q17 4Q17 1Q18 2Q18e East Kalimantan Unit: Bcm/t to Muara Jawa Avg SR: Operations 16.5 13.0 Balikpapan EMB Ports 11.9 11.3 10.4 Hauling Stockpile 2Q17 3Q17 4Q17 1Q18 2Q18e 0 2 4 6 8 10 km Crusher *SR based on FC coal **SR FY17 EMB: 12.2 12
Jorong SCHEMATIC QUARTERLY UPDATES 2017 target: 1.1 Mt 1Q18 production achieved according to target. Additional reserves from river diversion project would extend the life of the mine beyond 2019. Permit requirement by government is in progress. Pelaihari QUARTERLY OUTPUT Unit: Mt Haul road 0.3 0.3 0.3 0.2 0.2 20km 2Q17 3Q17 4Q17 1Q18 2Q18e Unit: Bcm/t Avg SR: Jorong 7.4 6.1 5.8 6.9 5.4 Coal Operations terminal Java Sea 2Q17 3Q17 4Q17 1Q18 2Q18e Barge Port Hauling *SR based on FC coal ***SR FY17 JBG: 6.4 Stockpile 0 5 10 15 20 25 km 13
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 14
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