PT DE DELTA A DUNI DUNIA A MAKM AKMUR UR Tbk bk COMPANY ANY PR PRES ESENT ENTATIO TION N | January 2 2012
Overview
Delta Overview Shareholding Structure Share Data Bloomberg Ticker Public DOID.IJ NTP Ltd (1) Shareholders Reuters Ticker DOID.JK Shares Outstanding 40.06% 59.94% 8,148,494,232 Free Float 59.94% Share Price (As of 30 Dec 2011) 100% (3) Rp 670 Market Capitalization (4) Property US$ 602 million Portfolio (2) Notes: 1.Northstar Tambang Persada Ltd., a company owned by a consortium of investors consisting of affiliates/nominated investment vehicles of TPG Capital, Government of Singapore Investment Corporation, China Investment Corporation and Northstar Equity Partners 2.As of 1 August 2011, Delta had a 48.99% interest in PT . Nusamakmur Cipta Sentosa (“NCS”) and 41.00% interest in PT. Sanurhasta Mitra (“SHM”). Further divestment of the property portfolio is expected to be done in the future 3.Less one share as required by Indonesian company regulations 4.Based on an exchange rate of Rp.9,068 = US$1.00 Source: Company data and Bloomberg 3
Key Developments BUMA secured larger equipment supply with firm orders totaling • BUMA signed a new 3-year mining BUMA signed a series of bi-lateral ~US$280mm for delivery up to services contract with PT Arutmin financing agreements with Komatsu 2012 with Caterpillar, Komatsu and Indonesia for Pit 4-7 of Senakin mine Astra Finance, Bank Danamon and Hitachi site Bank Permata • Successfully refinanced original LBO debt of $285mm syndicated loan and $315mm HY bond with a $600mm BUMA signed a new 3-year syndicated bank loan. Reduced mining services contract with average cost of debt by over 450bps Darma Henwa (KPC) May 2010 Sep 2010 Nov 2010 June 2010 BUMA completed US$800mm loan financing, comprised of Implementation of SAP US$750mm 7-year term facility and US$50mm 3-year revolving phase 1: Finance, facility and US$500mm 5-year plain vanilla interest rate swap. Accounting and Enterprise Removed the restrictive covenants, double average life and reduced Resources Mgmt. pricing. Lower balance sheet (funding) and interest rate risks. May 2011 Dec 2010 Dec 2011/Jan 2012 July 2011 Jan 2011 • BUMA signed contract amendment with Delta completed a Rights Issue, raising gross • BUMA was awarded a 5-year mining services Gunungbayan Pratama Coal. Contract was proceeds of ~US$142mm. Proceeds will be contract from Berau Coal for Pit East 2 (Lati) extended to 2017 with total target OB used to fund growth and/or potential • NTP Ltd announced a change in the lineup of its Removal volume of 260mm bcm acquisitions and other general corporate non-voting shareholding. TPG, GIC, CIC and • Contract amendment with Perkasa purposes Northstar Equity Partners are now the Inakakerta until 2017 with total target OB shareholders of NTP Removal volume of 261mm bcm and coal hauling of 29mm tons 4
Favorable Industry Dynamics High Barriers to Entry High Cost of Contractor Switching Proven track record and strong reputation Long transition downtime Term contracts High opportunity cost High capital investment Loss of mine site knowledge Strong ties with local communities Unique Positioning Lack of Well Capitalized, Strong Coal Demand Reputable and Technically Proficient Contractors has High Bargaining Power New Contracts from Existing and New Customers Increase in Coal Price Rising Mine owners may accelerate production to capitalize on high prices, subject to fleet constraints Coal Marginal coal deposits become profitable Prices Indonesia as Lowest Marginal Cost Producer, Formula-Based Pricing and Term Contracts Falling Coal Continued strong coal demand Prices Fixed coal volumes as specified in the long-term sales contracts Less impacted than other coal producing countries due to cost competitiveness Source: BUMA Company Data 5
Robust Contract Backlog BUMA’s Existing Contracts Kalimantan No Customers Period 1 Adaro (Tutupan) 2009-2013 2 Adaro – Coal Hauling 2009-2013 3 Kideco (Extension) 2004-2019 4 Berau Coal (Lati) 1998-2018 5 Berau Coal (Lati East 2) 2011-2016 6 Berau Coal (Suaran) 2003-2018 7 Berau Coal (Binungan) 2003-2018 8 Darma Henwa (KPC) 2010-2013 9 Marunda Graha Mineral - MGM 2003-2012 10 Lanna Harita Indonesia 2001-2013 11 Bayan - PIK 2007-2017 DEWA 12 Bayan - GBP 2007-2017 13 Arutmin (Senakin Pit 1) 2008-2012 (1) 14 Arutmin (Senakin Pits 4-7) 2010-2014 Contract Underwriting Criteria 15 KPC (Elang) 2011-2014 (2) Coal Marketability – Coal Quality must meet minimum requirements (1) Extended until August 2012 to complete existing work, (2) operates since April 2011 under Customer Requirements Head of Agreement, contract was signed January 2012 – Shareholder reliability / sufficient risk mitigates – Significant reserves – Low operating costs Profitability of Contract – Specified minimum return – Contract duration 6
Track Record of Growth Overburden Removal Volume Coal Production Volume mm bcm mm tons 334 36.4 292 35.0 34.7 278 32.3 32.7 32.8 262 207 191 2006 2007 2008 2009 2010 2011* 2006 2007 2008 2009 2010 2011* Implied Stripping Ratio 9.6x 8.5x 8.3x 7.2x 6.3x 5.9x 2006 2007 2008 2009 2010 2011* * Preliminary data based on truck counts for Oct-Dec figures Source: BUMA Company Data 7
BUMA’s Financial Performance Sustainable Net Revenue Growth (1) Rising EBITDA US$ mm US$ mm 580 227 504 504 487 202 199 418 175 165 2008 2009 2010 9M10 9M11 2008 2009 2010 9M10 9M11 Healthy EBITDA margin (2) Capital Expenditure 209 US$ mm 40.9% 40.0% 39.6% 195 39.1% 34.6% 95 75 2008 2009 2010 9M11 2008 2009 2010 9M10 9M11 1) Revenues net of fuel costs, 2) EBITDA to net revenue Notes: Source: BUMA Company Data 8
Interim Results
Interim Production Results OVERBURDEN REMOVAL COAL PRODUCTION COAL HAULING 2010 2011 2010 2011 2010 2011 mm bcm mm tons mm tons 93 3.2 3.1 3.2 3.1 3.1 86 3.0 3.0 80 80 9.6 75 75 76 9.0 9.1 9.1 8.8 8.5 8.0 7.7 2.2 61 1Q 2Q 3Q 4Q* 1Q 2Q 3Q 4Q* 1Q 2Q 3Q 4Q* * Preliminary data for 4Q2011, based on truck counts During 4Q 2011 , OB (1) Removal volume , which accounts for c.80% of BUMA’s revenue, reached 86 mm bcm (2) (7% increase YoY, down 8% QOQ) and Coal Production of 9.1 mm tons (-5% YoY and -1% QoQ). Higher frequency and intensity of rainfalls in Nov and Dec 2011 negatively affected production in 4Q 2011. SR (3) increased significantly to 9.5x in 4Q 2011 (compared to 8.4x in 4Q 2010). On a quarterly basis, SR declined by 7% QoQ from 10.2x in 3Q 2011. Average OB hauling distance increased by 7% YoY to 2.21km in 4Q 2011 vs. 2.05km in 4Q 2010. Note: 1.Defined as overburden, which is the material that is removed from the earth’s surface to uncover the coal 2.Million bank cubic metres 3.Defined as stripping ratio, which refers to the volume of waste rock or overburden removed to extract 1 tonne of coal 10
Delta / BUMA – Key Financial Highlights (1) BUMA Key Highlights: Net revenue (excl. fuel) in 9M 2011 increased 15% YoY to Rp 4,377bn. In US$ terms net revenue grew 20% YoY from US$418MM to US$504MM EBITDA reached Rp 1,515bn (+1% YoY). In US$ terms EBITDA grew by 5% YoY to US$175MM, translating into and EBITDA margin to net revenue of 34.6% in 9M 2011. Improvement in Q3 2011 performance. EBITDA margin to net revenue expanded to 37.4% in Q3 2011 vs. 29.3% in Q2 2011 and 36.8% in Q1 2011. Capital expenditure during 9M 2011 totaled US$195MM, in which US$182MM was for heavy equipment purchases. Delta Key Highlights: Delta’s 9M 2011 consolidated EBITDA remained flat at Rp 1,461bn and we posted a net loss of Rp 12bn due to, among others, a significant increase in depreciation and amortization expenses (+36% YoY), lower forex gain (-54% YoY) and one time expenses of US$18.2MM, recorded in Q2 2011, associated with a refinancing. In actual US$ terms, consolidated EBITDA grew 4% YoY to US$168MM and recurring net profit was at US$24.2MM (-7% YoY) 11
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