1
PT Toba Bara Sejahtra Tbk (
ɋ
Toba
Ɍ
)
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.
Table of Contents
2
5
Company Profile
4
9M15 Operational Highlights
3
9M15 Marketing Highlights
Guidance for 2015
1
9M15 Financial Highlights
4
Toba’s 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 is less than 50 km
Adjacent locations for all
3 mines
Close proximity transhipment
point & jetty Furthest pit to jetty 25 km, with closest
one ~5 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
25 km
TMU
IMABN
TMU
Underpass Infrastructure
Loading Speed of 1,800 TPH High Built CPP Cap
10 Mn TPA Short Coal Hauling
Distance < 5km
Hauling Road to IM
Mine Ops Commenced at Block 4
CPP Ramp Up to 6Mn Tons/Annum (TPA)
Conveyor for TMU & Others
Short Coal Hauling Distance 4km
Infrastructure & Operational Capabilities
Toba’s Concessions
Integrate CPP Ops with IM
20-year Production Operation Mining Permit (ɋIUPOPɌ) expiring in December 2029
IUPOP was converted from Kuasa Pertambangan (ɋKPɌ) in 2009
IUPOP expires in June 2013
IUPOP was converted from KP in 2010
IUPOP extension was
completed in March 2013 (First out of 2 extensions: in 2023, with tenor of 10 years each)
13-year IUPOP expires in December 2023
IUPOP was converted from a KP in 2010
Plantation permit expires in 2036
2,990 ha 683 ha 3,414 ha 8,633 ha (Right to Use Land)
Reserves: 117 MT- JORC
Resources: 156 MT- JORC
Reserve: 22 MT- JORC
Resources: 37MT- JORC
Reserves : 8 MT - JORC and additional 7 MT of internal estimate
Resources: 43 MT- JORC
Planted Area: 2,896 ha
Ownership Structure
Notes:
1. Son of TS founder, Luhut B. Pandjaitan 2. Figures are rounded off
License
Area
Davit Togar Pandjaitan (1) PT Bara Makmur Abadi
PT Toba Sejahtra (ɋTSɌ) PT Sinergi Sukses Utama Roby Budi Prakoso
71.8% 0.8% 6.2% 5.1%
PT Toba Bumi Energi (ɋTBEɌ)
99.99% (2) 99.99% (2)
3.6%
ABN Minorities
Majority Shareholder
PT Toba Bara Sejahtra Tbk PT Kutai Energi
PT Pusaka Jaya Palu Power
PT Kartanegara Energi Perkasa
Toba believes it benefits from Toba Sejahtra’s experience in the Indonesian coal sector as well as its
leadership and experience
Controlling Shareholder with Established Track
Record… Helmed by an Experienced Leader
General (Ret.) Luhut B. Pandjaitan is the key shareholder and founder of Toba Sejahtra Group
Mr. Luhut had a long and illustrious career in the civic service before turning to the commercial sector. Over the course of thirty years in the Army Special Forces, Mr. Luhut rose to become a four-star general
In 1999, Mr. Luhut retired from the military service to serve as Ambassador for the Republic of Indonesia to Singapore
In 2000, he was appointed Minister of Industry and Trade of the Republic of Indonesia
Thereafter, Mr. Luhut applied his knowledge and leadership skills to establish TS in 2004, building it from the ground up into a major business group with interests in energy oil and gas, power and agribusiness
PT Tritunggal Sentra Buana (Palm Oil)
Established in 2004, PT Toba Sejahtra (TS) is a fast growing Indonesian enterprise with industries, ranging from Energy Sector such as Natural Resources, Power, and Agriculture (Palm Oil) to Property
Power Coal Mining Other Industry
9
9M15 Realization
2015
“Sustainability & Resilience”
Operational 9M14 9M15 Δ%
Focused on profitable production output
through optimization of :
• Infrastructure and connectivity sharing
(hauling road and coal processing plant) • Joint mine plan
• Coal sale pricing driven by relationship, consistency in scheduled delivery and product quality
• Competitive price-fixing relative to benchmark Newcastle adjusted price
Note:
(1) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
2008 2009 2010 2011 2012 2013 2014 2015e
ABN IM TMU
G
uidan
ce
Yearly Coal Production
Mt : In Million Tons
5.6
6.5
6.0 – 8.0
8.1 Production volume rose significantly
from only 800K tons in 2008 to 8.1 mn tons in 2014, booking CAGR growth of 47.1% over 6 years
To preserve profitable margin and coal reserves, 2015 production target is expected at 6.0–8.0 mn tons
Stripping Ratio (SR) expected to stabilize at 11x–12x in 2015 from 13.3x in 2014
3Q15 results from subsidiaries came in line with 2015 quarterly guidance
Cumulative production achievement >10 Mt
Cumulative production achievement >20 Mt
5.2
4.1
0.8
2.0
2015 Production Target
2008 2009
9M15 Operational Performance
Quarterly Production & Stripping Ratio (SR)
Production in Thousand Tons
Production Summary
MT: Million Ton
9M14 9M15 Change Comment
Sales Volume (mt)
Sales decreased by 21.3%
SR continued to fall resulting in lower mining cost
6.4 4.5 Production volume decreased y-o-y to 4.5 mn tons in
9M15 to ensure profitable margin
(29.7)%
Production Volume
(mt)
Production Summary
MT: Million Ton
Q-o-q production volume of 1.6 mn tons remained stable, which came in line with 2015 quarterly guidance of 1.5-2.0 mn tons
9M15 SR stabilized at 12.3x, on track of achieving annual SR guidance of 11x – 12x 12.7x 12.7x 13.5x 13.8x
12.5x
13.8x
12.4x 12.5x 12.0x
00x
3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
ABN Operational Performance
ABN
TMU
IM
PT Kutai Energi
Quarterly Production & Stripping Ratio
Production in Thousand Tons
Key Highlights
Q-o-q production increased to 987 thousand tons in 3Q15, in line with 2015 internal guidance SR stabilized at 13.0x in 3Q15, on track of achieving annual SR guidance
SR decreased y-o-y by 5.1% from 13.8x in 9M15 to 13.1x in 9M15
13
1,300 930 904 969 987 12.4x
14.2x
13.1x 13.3x 13.0x
0x
3Q14 4Q14 1Q15 2Q15 3Q15
Production Volume (000) Stripping Ratio
Dump
IM Operational Performance
TMU
ABN
PT Kutai Energi
Quarterly Production & Stripping Ratio
Production in Thousand Tons
Key Highlights
Production increase of 38.1% q-o-q from 231K tons in 2Q15 to 319K tons in 3Q15 came in line with 2015 quarterly internal guidance of 200K – 300K tons
Q-o-q SR decreased from 12.7x in 2Q15 to 12.2x in 3Q15 and y-o-y SR decreased from 13.2x in 9M14 to 12.2x in 9M15, on track of achieving the annual SR guidance
14
700 493 388 231 319 13.3x 13.3x
12.0x 12.7x 12.2x
0x 5x 10x 15x
0 100 200 300 400 500 600 700 800
3Q14 4Q14 1Q15 2Q15 3Q15
Production Volume (000) Stripping Ratio
Dump
TMU Operational Performance
ABN IM
PT Kutai Energi
Note:
- - -
Hauling roadKey Highlights
Quarterly Production & Stripping Ratio
Production in Thousand Tons
3Q15 production volume decreased slightly to 259K tons, achieving 2015 quarterly internal production guidance
Q-o-q and y-o-y SR declined by 11.7% and 26.8% respectively, from 9.4x in 2Q14 to 8.3x in 3Q15 and from 12.7x in 9M14 to 9.3x in 9M15
3Q14 4Q14 1Q15 2Q15 3Q15
16
Evolution of FOB Cash Cost from 1Q12-3Q15
Quarterly FOB Cash Cost
In US$/ton
Notes:
(1) FOB Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization
(2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of exploration & development and excluding deferred stripping cost
Constant convergence between FOB cash cost and adjusted FOB cash cost underline normalization of SR over quarterly period resulting from more efficient mine operations
17
12.7x 12.7x 13.5x
13.8x
12.5x
13.8x
12.4x 12.5x 12.0x
0x
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15
Operational & Financial Highlights
Production (in mt)
6.4 4.5
29.7%
Avg. Cash Cost (in US$/ton)
51.5 43.7
Production volume decreased 29.7% y-o-y to 4.5 mn tons in 9M15, while sales volume decreased 21.3% mn tons over the same period
FOB cash cost fell by 15.1% y-o-y, resulting from continuous cost management initiatives, better execution of mine plan, and lower fuel costs
EBITDA declined by 27.3% y-o-y to US$ 42.0 mn in 9M15, yet EBITDA margin increased from 14.8% to 15.6% over the same period
Notes:
(1) FOB Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization
(2) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
Financial and Operational Highlights
All figures are in million US$
unless otherwise stated 2Q15 3Q15 Changes 9M14 9M15 Changes
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
16.1% weaker NEWC Index
Stabilization of annual SR to 11x-12x is shown by y-o-y and q-o-q SR declines by 6.8% and 4.0% respectively
19
Balance Sheet
Consolidated Balance Sheet
In Million US$
Net Debt to EBITDA
In Million US$
Total assets decreased 7.7% to US$ 277.6 mn in 9M15 from US$ 300.6 mn as per end 2014 Over same period, total liabilities declined 20.0% to US$ 126.7 mn
Total equity value increased 6.0% to US$ 150.9 mn from US$ 142.4 mn (excluding US$ 14.4 mn of declared dividend), attributable to additional income for the period
Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at way below 2x.
Note:
(1) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
20
3Q14 4Q14 1Q15 2Q15 3Q15
Net Debt (Cash) (US$ Mn) EBITDA (US$ Mn)
Ratio(x) (0.3) 1.1 0.5 0.7 1.1
277.6
Total Asets 300.6 (7.7)%
Interest Bearing Debt 58.1 62.5 7.6%
Total Liabilities 158.3 126.7 (20.0)%
Shareholders Equity 142.4 150.9 6.0%
Balance Sheet (in US$ mn) Dec ‘14 Sep ‘15 Changes
21
98.5
2010 2011 2012 2013 2014 9M15 NEWC ASP
9M15 Marketing Performance
NEWC Index & ASP (in US$/ton) Product Contribution (GAR)
Average NEWC Index declined by 16.1% from US$ 73.2/ton 9M14 to US$ 61.4/ton in 9M15, while ASP declined by 12.8% from US$ 64.1/ton to US$ 55.9/ton over the same period
Total sales were mainly contributed by ~5,600 GAR products
22
Million Tons
9M15 Marketing & Sales
–
Quality & Diversified Buyers
Initiatives Undertaken:
Major Customers Export Destinations by Country
Maintaining well-diversified customer base consisting of mainly reputable international traders, while also growing the number of end-users and decrease exposure to risks from single major customer
Generating good quality sales backed by quality buyers and favorable terms of payment Achieved tighter discount rate to reference market price
End Users
Million Tons
1.6 Mt
Million Tons
24
50
Target & Strategy
1
2
“Sustainability & Resilience”
3
2015 Strategy
Focus on maintaining certain
profitability level during uncertain times
Increase reserve through inorganic growth (M&A)
Diversify into downstream industries
NEWC Index (2011 – 2015)
Sep ‘13 US$78/ton Sep ‘12
US$ 89/ton
• Coal Market has been under pressure for the past three years. In September 2015, NEWC Index reached US$ 58/ton or 35% lower compared to the high US$ 89/ton in September 2012
Marketing Plan & Strategy
1
2
Secure good quality sales backed by quality buyers and favorable terms of payment3
Achieve ASP based on tighter discount rate to reference market price4
Continuously improve quality control by minimizing product deviation and delayed shipment: full coordination with production and logistics teamsBuild well-diversified customer base. Focus to increase sales to end users
2015 Marketing Strategy
Operational & Financial Snapshot 2015F vs 2014
Operation
Prod Vol (mt)
Sales Vol (mt)
SR (x) 11x - 12x
6 - 8 6 - 8
2015 F 2014
13.3x
7.9 8.1
NEWC Coal Price 62 - 65 70.8
• SR expected to be lowered to ~11x level. SR reduction expected to come mainly from IM & TMU • Production and sales volume expected to stabilize at 6-8 million tons
2015 CAPEX
In 2015, Toba is planning to realize CAPEX of US$ 10 – 14 mn
US$ mn
Salient Points
1 - 2
2 - 3
4 - 5
4 - 5
0 2 4 6 8 10 12 14 16
Conveyor Land Comp. Building Road & Bridges Total CAPEX 2015
14
• Toba’s 2015 CAPEX supports its on-going sustainability program strategy amidst cutbacks among major industry producers
• Majority of Toba’s mining-related CAPEX i.e. Infrastructure upgrade had already been realized in 2013. Hence, 2014 and 2015 will mainly focus on: operational facilities and equipment (conveyor and heavy equipment); land compensation; maintenance for building & road and bridges
Long Term: Create Downstream Synergy through Power
Sector Backed by Continuous Reserve
Build sustainable cash-flow Increase margin
Short - Medium Term
Medium - Long Term
VERTICAL DIVERSIFICATION
Continuous increase in coal reserve via concession acquisition
Protect and maximize margin in prolonged weak & volatile coal market
Focus on continuous improvement in cost efficiency
Generate higher portion of durable cash-flow, improving margin over time
Run executable mine plan focusing on profitable production growth
Deploy hedging (coal & fuel price) Source cheaper substitute energy to
replace diesel fuel
Commercially-viable
Develop and operate coal-fired power plant, optimizing supply for domestic consumption
Develop opportunities in alternative and renewable energy sources
