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PT TOBA BARA SEJAHTRA Tbk
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra (the “Company”).
These materials may contain statements that constitute forward-looking statements. These statements include descriptions regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results of operations and financial condition of the Company. These statements can be recognized by the use of words such as “expects,”“plan,”“will,”“estimates,”“projects,”“intends,” or words of similar meaning. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ from those in the forward-looking statements as a result of various factors and assumptions. The Company has no obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances.
These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever. Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate professional advice.
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Samarinda
Sungai Mahakam
Muara Jawa
Muara Berau
Makassar Strait Major City
Jetty
Transhipment Point
~55 Km locations for
all 3 mines
Furthest pit to jetty 25km | with closest one ~5km Major city is
less than 50 km
Close proximity transhipment
point & jetty
Toba owns all infrastructures (coal processing plants, overland conveyors, and jetties), giving
significant operating leverage
vs other concessions in surrounding areas
Balikpapan
TMU - IM Hauling Road
~ 120 km
Strategic Locations of
Toba’s Three Concessions
0.9
4Q2009 4Q2010 4Q2011 4Q2012 4Q2013
Toba’s Performance Guidance
Operation
2012
2013
Changes
2014E
Changes
Production Volume (million tons) 5.6 6.5 17.0% 7.2 – 7.8 10.0 – 20.0%
Stripping Ratio (x) 14.9 13.4 (10.0%) 12.9 – 13.3 (0.7%) – (3.7%)
Average Selling Price (ASP) (US$/ton) 72.5 67.0 – 70.0 (3.0%) – (7.5%) 63.0 – 67.0 (4.3%) – (6.0%)
Coal Production 2008
–
2014
In Million Tons
2008 2009 2010 2011 2012 2013 2014e
TMU IM ABN
Notes: - Production target range is expected to be above average Indonesian coal sector production growth of 5.0% – 10.0% for 2014
- All figures are rounded up to one decimal point
ABN: Expecting 2.0% – 3.0 % production growth
IM: Expecting 20.0% – 30.0% production growth
TMU: Expecting 60.0% – 70.0% production growth
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Highest 4Q production volume throughout corporate history
In million tons
Above 2013 internal guidance
of 5.8-6.4m
TOBA continues its strategy to lower cost via, inter alia, investment in infrastructure
2013 Achievements of Infrastructure Projects
Project
Background
Future Benefits
% Completion
Target
17 km Hauling Road from TMU to ABN *)
To streamline internal logistical flow for TMU
To obtain cost efficiency and allow for TMU production ramp up
100%
Second Underpass at ABN
To support
infrastructure facilities at ABN
To lower OB (over burden) overhaul dump distance
100%
Workshop at ABN To accommodate maintenance and repair facilities for mining equipment
To ensure streamlined
operational activities related to heavy equipment and
supporting equipment
100%
New CPP (Coal Processing Plant) at IM
To increase coal production capacity at IM from 3 mn tpa to 6 mn tpa **)
To process TMU’s coal ,
reduce costs, and boost stockpile capacity of up to 16 tpa from 13 tpa presently
91% 1H 2014 ***)
South Korea
2011 2012 2013*)
Sales (million tons)
ABN 3.7 4.2 4.7
IM 1.8 1.1 1.4
TMU - 0.2 0.7
2013 Sales and Marketing Activities
GAR 52 ABN 18%
GAR 56HS ABN 22%
GAR 56RS ABN 24%
GAR 58LS IM 8%
GAR 47 TMU 10%
Others 18%
Sales by Product
Note: * )This includes inter–subsidiaries sales
Note: Sales to export destinations ie. Vietnam, Thailand , Hong Kong, Malaysia and Japan each below 3%
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Initiatives Undertaken:
Commenced building well-diversified customer base and export market coverage
Generated good quality sales backed by quality buyers and favorable terms of payment
Land compensation,
Construction of new CPP at IM,
Completion of 17 km hauling road from TMU to ABN
Construction of ABN’s second underpass
2013 CAPEX
In 2013, Toba realized Capex of US$ 19 - 23 million, mainly allocated for :
7 Toba successfully generated cost savings of around US$ 4 – 8 million from total initially-planned capex of
US$ 27 million slated for 2013
Salient Point
In US$’000
5.394
22.970
27.100
5.230
4.319
3.456 1.807
528 2.236
0 5.000 10.000 15.000 20.000 25.000 30.000
CPP Land comp. Vehicles,
machineries and heavy eq
FY 2014 CAPEX
Land compensation at TMU
Exploration at TMU
Operational and Infrastructure maintenance at ABN and IM
US$ -9 million for Palm Oil Mill
Toba’s 2014 capex growth supports its on-going growth strategy amidst cutbacks among major
industry producers
Majority of capex is expected to focus on TMU as it will become Toba’s main growth driver Palm Oil Mills
38%
Conveyor 9% Buildings
5% Equipment
8% Exploration
5% Land Compensation
31%
Others 4%
Allocated US$ US$ ~9 million
PKU (Perkebunan Kaltim Utama I)
Total area granted by government: 8,633 ha
Plantation permit expires in 2036
Planted area: 2,896 ha
In 2014, Toba targets capex of US$ 15
–
24 million (including PKU), mainly allocated for :
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What to Expect f
rom Here…
Continued low
coal prices due
to on-going
supply and
demand
imbalance
Unfavorable
external and
domestic
government
policy-making
Deteriorating
and more
sporadic
weather
conditions
(rainfall)
Depleting
reserve life from
continued
decline in coal
prices
To anticipate this, Toba successfully overcame its majority obstacles during 2013. The highlights included:
Creating new mine plan executable for the current low coal price environment
Renegotiating with third party contractors on new rates
Building and completing hauling road in time to enable production ramp up and cost savings
Increasing infrastructure capacity to anticipate production growth Deploying effective marketing strategy targeting more diversified
customer base & export market coverage, better quality customers, while maximizing ASP
Entering 2014, Toba has become a stronger and more resilient company, and is poised to continue its “sustainable and profitable production growth” strategy through:
Maintaining cost efficiency in all levels
Increasing production growth at acceptable level
Seeking increased reserves through internal exploration and external acquisitions
Strengthening quality of human resources at every level of the organization
Increasing marketing strength via targeting higher quality customers, while optimizing ASP
Maximizing return to shareholders through profit growth and dividend
