1
PT Toba Bara Sejahtra Tbk (
䇾
Toba
䇿
)
Company Presentation
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.
Table of Contents
2
5
Company Profile
4
1H16 Operational Highlights
3
1H16 Marketing Highlights
Guidance for 2016
1
4
JORC-compliant proved and probable reserves of 147 MM tons and measured, indicated and inferred resources of 236 MM tons
Coal brands with mid to upper range calorific values (CV) of 4,700-5,800 kcal/kg GAR
Strong production growth profile, registering ~34% CAGR between 2008 and 2015. Produced 6.5 MM tons in 2013 and grew ~25% to 8.1 MM tons in 2014
Prime location near Capital of East Kalimantan
and proximity to waterways provides
operational cost edge to grow as logistical & operational center for the area
Strong Growth
Profile
Toba specializes in thermal coal production and comprises of three mining subsidiaries: Adimitra
Baratama Nusantara (ABN), Indomining (IM) and Trisensa Mineral Utama (TMU)
Toba Bara Sejahtra in Brief
Diversified Thermal Coal
Strategic Mine Locations
Muara Berau
Muara Jawa Makassar Strait
~55 km
City Jetty Transhipment Point
TMU – IM Hauling Road
Kutai Energi
TMU
ABN IM
Major city to north is less than
50 km
Adjacent locations for all
3 mines
Close proximity to jetty and transhipment point of Muara
Jawa Distance from pit to
jetty, with closest one ~5 km and furthest ~25 km ~5 km
IM jetty
ABN jetty
Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties), giving significant operating leverage vs other concessions in surrounding areas
TMU
IMABN
TMU
Underpass Infrastructure
Loading Speed of 1,800 TPH High Built CPP Cap
up to 10 Mn TPA Short Coal Hauling
Distance < 5km
~16 km Hauling Road to Connect with ABN
Mine Ops Commenced at Block 4
CPP Capacity (cap) Ramped Up to 6 Mn Tons/Annum (TPA)
IM Conveyor for TMU usage &
Others
Short Coal Hauling Distance ~4km
Infrastructure & Operational Capabilities
Toba’s Concessions
Integrated CPP and Jetty Ops with IM
Note: PT Adimitra Baratama Nusantara (ABN) PT Indomining (IM)
Note:
1. Figures are rounded off 2. CFPP: Coal-Fired Power Plant
3. PLN: PT Perusahaan Listrik Negara (Persero) 4. IPP: Independent Power Producer 5. PPA: Power Purchase Agreement
Ownership Structure
License
Area
Davit Togar Pandjaitan PT Bara Makmur Abadi
PT Toba Sejahtra PT Sinergi Sukses Utama Roby Budi Prakoso
71.8% 0.8% 6.2% 5.1%
PT Toba Bumi Energi (䇾TBE䇿)
99.99% (1)
99.99% (1)
3.6%
ABN Minorities
49.0%
20-year Production Operation Mining Permit (䇾IUP-OP䇿) expiring in December 2029
IUP-OP was converted from Kuasa
Pertambangan (䇾KP䇿) in 2009
IUP-OP expires in June 2013
IUP-OP was converted from KP in 2010
IUP-OP extension was completed in March 2013 (First out of 2 extensions: in 2023, with tenor of 10 years each)
13-year IUP-OP expires in December 2023
IUP-OP was converted from a KP in 2010
Plantation permit of PT Perkebunan Kaltim Utama I (PKU) expires in 2036
PT Gorontalo Listrik Perdana (GLP) was established in Feb 2016 to undertake coal-fired power plant project in Gorontalo, Sulawesi
2,990 ha 683 ha 3,414 ha 8,633 ha (Right to Use
Land) Gorontalo, Sulawesi
1H16 Milestones
1st April 2016: IM and PT Cipta Kridatama (subsidiary of PT ABM Investama Tbk) entered into a
five-year mining contract valued at US$ 82 million over the contract period
29th May 2016: ABN was awarded the PROPER Gold Mining Award for Environmental Management
(2015 – 2016) from the Governor of East Kalimantan
29th May 2016: IM was awarded the PROPER Green Mining Award for Environmental Management
(2015 – 2016) from the Governor of East Kalimantan
29th May 2016: TMU was awarded the PROPER Green Mining Award for Environmental Management
10
Realization
Focused on profitable production output
through optimization of :
Infrastructure and connectivity sharing
(hauling road, coal processing plants (CPP), & jetties)
Joint mine plan between three adjacent
operating mines
Competitive & premium coal pricing driven by strong coal branding from
consistency in scheduled delivery/product quality and established customer
relationship with diversified customer base
Average Selling Price (ASP)
outperformance relative to benchmark Newcastle due to sale executions based on well-timed predictions in market trends
Note:
2008 2009 2010 2011 2012 2013 2014 2015 2016
Annual Coal Production Mt : In Million Tons subsidiaries came in line with 2015 annual guidance
With strategy to sustain certain margin, while preserving life-of-mine (LoM) reserves, 2016 production guidance is estimated at 5.0-7.0 mn tons
2016 Stripping Ratio (SR) is expected to stabilize at 11x-12x, as per the mine plan
Cumulative production achievement >10 Mt
Cumulative production achievement >20 Mt
5.2
4.1
0.8
2.0
2016 Production Guidance
2008 2009
1H16 Operational Performance
Quarterly Production & SR Production in Thousand Tons
Production Summary MT: Million Ton
1H15 1H16 Change Comment
Sales Volume
SR (x)
3.3 3.1
12.5 13.1
(6.1)%
4.8%
1H16 sales volume tracked its 1H16 production volume
SR edged up due to pre-stripping at ABN, and in line with mine plan
3.0 2.8
Production volume in 1H16 stabilized at 2.8 mn tons in line with mine plan, while ensuring certain margin and optimizing reserve preservation
(6.7)%
Production Volume
Production Summary MT: Million Tons
Q-o-q production volume of 1.3 mn tons in 2Q16 came in line with 2016 quarterly guidance of 1.25 -1.75 mn tons
2Q16 SR rose to 13.9x from 12.4x in 1Q16 due primarily to pre-stripping activity at ABN new pit
SR in subsequent quarter is expected to remain at similar level before normalizing in 4Q16
2,160 2,330 1,653 1,505 1,469 1,565 1,529 1,503 1,269 13.8x
12.5x 13.8x 12.4x 12.5x
12.0x 12.1x 12.4x
13.9x
2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
TOBA
ABN Operational Performance
ABN
TMU
IM
PT Kutai Energi
Quarterly Production & SR
Production in Thousand Tons
Key Highlights
2Q16 quarterly production decreased y-o-y and q-o-q from 1Q16 and 2Q15 respectively due to
pre-stripping activity
SR in 2Q16 rose to 15.0x due to pre-stripping activity at ABN’s opening of new pit
969 987 994 1,071 876 13.3x 13.0x
12.6x 12.9x
15.0x
0x 5x 10x 15x 20x
0 200 400 600 800 1,000 1,200
2Q15 3Q15 4Q15 1Q16 2Q16
ABN
IM Operational Performance
TMU
ABN
PT Kutai Energi
Quarterly Production & SR
Production in Thousand Tons
Key Highlights
Production increase to 173K tons in 1H16 came in line with 2016 internal quarterly guidance of 125K -
175K tons
SR in 1Q16 stabilized y-o-y and q-o-q at 12.0x
231 319 288 140 173
12.7x 12.2x 13.6x
12.0x
12.0x
0x 5x 10x 15x
0 50 100 150 200 250 300 350
2Q15 3Q15 4Q15 1Q16 2Q16
IM
TMU Operational Performance
ABN IM
PT Kutai Energi
Note:
- - -
Hauling roadKey Highlights
Quarterly Production & SR
Production in Thousand Tons
2Q16 production volume came in at 220K tons, slightly below 2016 internal quarterly production guidance
of 225K-325K tons
2Q16 SR on q-o-q stabilized but edged slightly on y-o-y basis
269 259 247 292 220 9.4x
8.3x 8.3x
10.8x 10.6x
0x 5x 10x 15x
0 50 100 150 200 250 300 350
2Q15 3Q15 4Q15 1Q16 2Q16
TMU
17
Evolution of Quarterly FOB Cash Cost from 3Q12-2Q16
Quarterly FOB Cash Cost In US$/ton
Notes:
(1) FOB Cash Cost = COGS including royalty and selling & marketing expense – depreciation and amortization
(2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of deferred exploration & development costs and excluding deferred stripping cost
Divergence between SR averaging at 12x-13x and falling FOB cash cost reflect Toba operating within mine plan and more efficiently over time
60 57 55 55 53 49 49 53 51 50 47 43 41 38 35 35
12.7x 12.7x 13.5x
13.8x
12.5x
13.8x
12.4x 12.5x 12.0x 12.1x 12.4x
13.9x
3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16
Notes:
(1) FOB Cash Cost = COGS inc. royalty and selling & marketing expense – depreciation & amortization
(2) EBITDA = Gross Profit – selling expenses – G&A + depreciation & amortization + other non-cash items
23.9 20.2
Operational & Financial Highlights
Production (mn tons)
3.0
6.7%
FOB Cash Cost (US$/ton)
44.8 34.9
on continuous cost management
initiatives, better mine plan
execution
EBITDA declined by 26.2% y-o-y to US$ 22.0 mn in 1H16, yet EBITDA margin rose slightly 15.6% to 15.8% over the same period due to same reasons above
Financial and Operational Highlights
All figures are in million US$
unless otherwise stated 1Q16 2Q16 Changes 1H15 1H16 Changes
Operation
Financial Perform ance
Profit (Loss) 1Q16 2Q16 Changes 1H15 1H16 Changes Sales US$ mn 63.6 75.4 18.6 % 190.8 139.0 (27.1)%
Balance Sheet 1Q16 2Q16 Changes Dec'15 Jun'16 Changes Interest Bearing Debt US$ mn 61.3 58.0 (5.4)% 64.0 58.0 (9.4)%
Cash and Cash Equivalents US$ mn 49.1 40.7 (17.1)% 45.5 40.7 (10.5)%
Net Debt*** US$ mn 12.2 17.3 41.8 % 18.5 17.3 (6.5)%
Total Assets US$ mn 282.3 268.6 (4.9)% 282.4 268.6 (4.9)%
Total Liabilities US$ mn 122.2 111.8 (8.5)% 127.3 111.8 (12.2)%
Total Equity US$ mn 160.2 156.8 (2.1)% 155.1 156.8 1.1 %
Financial Ratios
Gross Profit Margin % 22.5% 18.4% 18.9% 20.2%
EBITDA Margin % 17.8% 14.2% 15.6% 15.8%
Operating Profit Margin % 13.1% 10.1% 12.5% 11.5%
Financial Performance
Notes: (1) FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization (2) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
Balance sheet position remains
positive despite lower cash holdings in 1H16, while debt exposure fell due to partial loan repayment
SR edged up in 1H16 due to
pre-stripping activity in 2Q16 as ABN opened new pit
Gross profit margin, and EBITDA
margin each rose y-o-y to 1H16
resulting from better operational
performance, disciplined cost
8.9
2Q15 3Q15 4Q15 1Q16 2Q16
Net Debt (Cash) (US$ Mn) EBITDA (US$ Mn)
Balance Sheet
Consolidated Balance Sheet
In Million US$
Net Debt to EBITDA2)
In Million US$
Total assets fell 4.9% to US$ 268.6 mn at end-June 2016 from US$ 282.4 mn as per end 2015, while
total liabilities dropped much more by 12.2% to US$ 111.8 mn over the same period due mainly to
loan repayment
Total equity value rose slightly 1.1% to US$ 160.2 mn from US$ 155.1 mn, due to additional profit for the period
Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at below 2x
Note:
(1) Restated due to compliance on PSAK 24R implementation
(2) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
282.3
Total Assets 282.4 0.0%
Interest Bearing Debt 64.0 61.3 (4.2)%
Total Liabilities 127.3 122.2 (4.0)%
Shareholders Equity 155.1 160.2 3.3%
Balance Sheet Dec ’151) Mar ‘16 Changes
Cash and Cash Equivalent 45.5 49.1 7.9%
22
98.5
2010 2011 2012 2013 2014 2015 1Q16 2Q16
NEWC
Million Tons
Optimizing Selling Price & Product Quality
Covergence of NEWC Index & ASP (in US$/ton) Sales by Product Mainly Contributed by 5600 (GAR)
Average NEWC Index declined by 18.8% from US$ 62.7/ton in 1H15 to US$ 50.9/ton in 1H16, while
ASP contracted by 20.8% from US$ 57.3/ton to US$ 45.4/ton over the same period
at ~65.5%, the 5600 GAR products account for the largest portion of 1H16 total sales volume
As of 1H16, 83.0% of 2016 sales volume target has been secured mostly at fixed price
Diversified Market Base & Customer Base
Initiatives Undertaken:
Total Sales by Customer Type Sales Destinations by Country
Building well-diversified export destination base and customer base backed by positive demand
prospects and quality customers respectively: In 2015, South Korea replaced China as main export destination, while the customer base consisted of mainly reputable international traders with growing composition of notable regional end-users, increasing from 3.6% in 2014 to 36.8% in 2015
In 1H16, end-users composition stabilized at 28.6% level as compared to 33.6% in 1H15
Maintaining product brand with customers by making good on delivery with specifications ensured
Achieving tighter discount to even premium to Newcastle adjusted reference price
26.4%
Million Tons
71.4% 28.6%
25
Snapshot of 2016F
Operation
Prod Vol (mn ton)
SR (x) 12.3x
6.1
2014
13.3x 8.1
NEWC Coal Price (US$/ton) 70.8 59.2
Objective is to execute disciplined mine plan that generates certain margin without compromising long
term reserves
Post 17.6% and 22.1% y-o-y FOB cash cost reductions in 2015 and 1H16 respectively, joint mine plan
and infrastructure sharing are to be better streamlined among 3 operating subsidiaries, with initiatives to lower costs throughout value chain from mining to logistics costs
Marketing is to focus on better diversification of export destination base and customer base (ideal mix between traders and end-users) and maintaining product branding
2016 CAPEX is estimated at US$ 5 - 8 mn to support mainly mining facilities and equipment, and
plantation operation of PKU. Currently, PKU is in final stage of constructing palm oil mill with capacity of 30 fresh fruit bunch (FFB) / hour to be completed by first semester 2016
Toba aspires to become an integrated energy company in the long run through sustainable growth. To
maximize existing assets and ensure future sustainable growth backed by more stable revenue stream, it is engaging in downstream integration in the power sector
11x - 12x 5 - 7
2016 F
50 - 55