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
2014 Operational Highlights
3
2014 Marketing Highlights
Guidance for 2015
1
4
Toba’s Strategic Mine Locations
Muara Berau
Muara Jawa Makassar Strait
~55 km
City Jetty Transshipment 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 transshipment
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
Coal calorific values : mid to upper
Loading Speed of 1,800 TPH High Built CPP Cap
10 mn TPA Hauling Road to IM
Mine Ops Commenced at Block 4
Short Coal Hauling Distance < 5km
CPP Ramp Up to 6Mn Tons/Annum (TPA)
Conveyor for TMU & Others
Short Coal Hauling Distance 4km ABN
TMU
Infrastructure & Operational Capabilities
INDOMINING
Integrate CPP Ops with IM
Ownership Structure
Notes:
1. Son of TS founder, Luhut B. Pandjaitan 2. Figures are rounded off
•20-year Production Operation Mining Permit (䇾IUPOP䇿) expiring in
December 2029
•IUPOP was converted from Kuasa Pertambangan (䇾KP䇿) 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
License
Area
Davit Togar Pandjaitan (1) PT Bara Makmur Abadi
PT Toba Sejahtra (䇾TS䇿) PT Sinergi Sukses Utama Roby Budi Prakoso
ABN Minorities
Majority Shareholder
Coal Mining
• PT Toba Bara Sejahtra Tbk • PT Kutai
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. He is currently the chairman of TS
• 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)
Other Industry
9
2014 Target & Realization
2014
“Growing with Sustainability”
Operational 2013 2014 Δ%
Focus on production growth (~15%-20%)
while maintaining certain profitability level
through optimization of :
• Infrastructure and connectivity sharing
(hauling road and CPP)
• Joint mine plan
• Coal sale pricing driven by relationship, consistency in scheduled delivery and product quality
2008 2009 2010 2011 2012 2013 2014 2014e
TMU IM ABN Yearly Coal Production
in million tons (mt)
Cumulative production achievement >10 mt
Cumulative production achievement >20 mt
5.6 significantly from only 800,000 tons in 2008 to 8.1 mn tons in 2014,
• Stripping Ratio (SR) stabilized from 13.4x in 2013 to 13.3x in 2014
2014 Operatioinal Performance
Cumulative Production & Stripping Ratio (SR)
Production in thousand tons
Production Summary
MT: Million Ton
2013 2014 Change Comment
Sales Volume (mt)
Sales volume grew significantly in line with production volume growth
SR continued to fall resulting in lower mining cost
6.5 8.1
Production volume grew y-o-y significantly
from 2013 to 2014 mainly driven by border mining at IM and production ramp-up at TMU
24.6%
Production Volume
(mt)
Production Summary
mt: million tons
• 2014 quarterly production run rate
averaged around 2.0 mn tons
• Lower production in 4Q14
compared to previous quarters resulted mainly from relatively strong seasonal wet conditions
• In anticipation of continued weak
coal prices in 2015, the relatively higher SR in 4Q14 stemmed from higher pre-stripping activities to allow for better coal extraction in subsequent periods
1,298 2,799 4,601 6,551 1,911 4,071 6,401 8,054 15.1x 14.3x
13.7x 13.4x 13.5x 13.6x 13.2x 13.3x
0.0x
1Q13 1H13 9M13 2013 1Q14 1H14 9M14 2014
925 1,920 3,108 4,209 1,003 2,216 3,516 4,446 16.6x
15.5x
14.4x 14.0x 14.1x 14.6x 13.8x 13.9x
0.0x
1Q13 1H13 9M13 2013 1Q14 1H14 9M14 2014
Production Volume (000) Stripping Ratio
ABN Operational Performance
ABN
TMU
IM
PT Kutai Energi
Cumulative Production & Stripping Ratio Production in thousand tons
Key Highlights
Dump Dist. (m)
1,719 1,789 1,808 1,806 1,894 1,860 1,858 1,913
Yearly production rose from 4.2 mt in 2013 to 4.4 mt in 2014, while lower 4Q14 production was due to
relatively strong seasonal wet conditions
2014 SR stabilized at ~13.9x
4Q14 SR rose from previous quarters due to relatively high pre-stripping to anticipate better coal
IM Operational Performance
TMU
ABN
PT Kutai Energi
Cumulative Production & Stripping Ratio Production in thousand tons
Key Highlights
Quarterly production run-rate stabilized at ~550K level throughout 2014, up from quarterly run-rate of
~350K throughout 2013
2014 production volume rose ~64.0% y-o-y from 1.4 mt to 2.3 mt
4Q14 production was affected by strong seasonal wet conditions
2014 SR normalized at 13.3x
278 637 976 1,401 547 1,117 1,817 2,310 11.2x 11.7x
12.8x 12.8x 13.7x 13.1x 13.2x 13.2x
0.0x
1Q13 1H13 9M13 2013 1Q14 1H14 9M14 2014
Production Volume (000) Stripping Ratio
Dump Dist. (m)
TMU Operational Performance
ABN IM
PT Kutai Energi
Note:
- - -
Hauling roadKey Highlights
Cumulative Production & Stripping Ratio Production in thousand tons
Post completion of hauling road at TMU to ABN in 2Q13, production run-rate significantly rose from low of
80-90K per quarter up to average ~340K throughout 2014
2014 SR stabilized at 11.8x
Strong seasonal wet weather affected 4Q14 production
84 230 505 925 362 741 1,141 1,372 11.2x 12.1x 11.2x 11.1x 11.4x 11.6x 11.6x 11.8x
0.0x
1Q13 1H13 9M13 2013 1Q14 1H14 9M14 2014
16
Evolution of Quarterly FOB Cash Cost from 2012-2014
Quarterly FOB Cash Cost
in US$/ton
Notes:
(1) FOB Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization
(2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of exploration & development and excluding deferred stripping cost
Constant convergence between FOB cash cost and adjusted FOB cash cost underline normalization of
SR over quarterly period resulting from more efficient mine operations
67 69 60 57 55 55 53 49 49 52 53 50
12.7x 12.7x 13.5x 13.8x 12.5x
13.8x
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
48.8 51.5
Operational & Financial Highlights
Production (in mt)
6.5 8.1
24.6%
Avg. Cash Cost (in US$/ton)
52.9 51.3
Production volume expanded
11.9
34.6 35.8
2012 2013 2014 22.5
58.7
67.3
2012 2013 2014 396.7 421.9
500.0
2012 2013 2014
Financial Performance
Sales US$ million
EBITDA US$ million
Net Profit (a)
US$ million
Note: (a) Net Income before minority interest
Despite declining NEWC Index price trend on y-o-y basis from 2012 to 2013 and to 2014, sales value increased 6.4% from US$ 396.7 million in 2012 to US$ 421.9 million in 2013 and 18.5% to US$ 500.0 million in 2014
EBITDA surged 160.9% y-o-y to US$ 58.7 million in 2013 and 14.8% y-o-y to US$ 67.3 million in 2014
resulting from higher sales volume and better mine plan execution, hence lowering mining costs in the process
Total profit for the period in 2013 stood at US$ 34.6 million, up 190.8% from 2012. Meanwhile, from 2013
Financial Performance
Notes:
*FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization **EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
Despite weaker ASP, sales rose
18.5% y-o-y to US$ 500.0 mn in
2014 due to 23.4% sales
volume growth
EBITDA increased 14.8% y-o-y
to US$ 67.3 mn in 2014 attributable to increased production and lower cash cost by 24.6% and 3.0% respectively
Financial and Operational Highlights All figures are in million US$ unless
-17.0
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
Net Debt (Cash) (US$ Mn) EBITDA (US$ Mn)
Balance Sheet
Consolidated Balance Sheet
in million US$
Net Debt to EBITDA
in million US$
Total assets decreased 3.5% to US$ 300.6 mn in 2014 from US$ 311.6 mn as per end 2013
Over same period, total liabilities declined 12.6% to US$ 158.3 mn
Total equity in 2014 increased 9.1% to US$ 142.4 mn from US$ 130.5 mn, attributable to additional income
for the period
22
2014 Marketing Performance
NEWC Index & ASP (in US$/ton) Product Contribution (GAR)
Average NEWC Index declined by 17.0% from US$ 85.30/ton in 2013 to US$ 70.80/ton in 2014,
while ASP declined by 4.4% from US$ 66.6/ton in 2013 to US$ 63.7/ton
Total sales are mainly contributed from 4700 GAR and 5600 GAR products
98.5
2010 2011 2012 2013 2014
NEWC ASP
Million Tons
0.0 0.4 0.8 1.2 1.6 2.0 2.4 2.8
2014 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
Generating good quality sales backed by quality buyers and favorable terms of payment Achieved tighter discount rate to reference market price
0.0 0.3 0.6 0.9 1.2 1.5 1.8
Million Tons Million Tons
25
Target & Strategy
1
2
“Sustainability & Resilience”
3
2015 Strategy
Focus on maintaining level of profitability during uncertain times
Increase reserve through exploration & acquisition
Diversify into downstream industries
20
• Coal Market has been under pressure for past two years. In Dec 2013, NEWC Index reached US$86/ton or 34% lower compared to the highest in Jan 2011 of US$130/ton
• Newcastle Index continued to fall by ~27% from US$86/ton in Dec 2013 to US$63/ton in Dec 2014
• VIEW: Prolonged excess capacity has undermined coal price and is expected to continue in medium-term
Operational & Financial Snapshot 2015F vs 2014
Operation
Prod Vol (mt)
Sales Vol (mt)
SR (x) 11x - 12x
6 - 8 6 - 8
2015 F 2014
13.3x
7.9 8.1
NEWC Coal Price 62 - 65 70.8
• SR expected to be lowered to ~11x level. SR reduction expected to come mainly from IM & TMU
16%
41% 32%
11%
48 LS 56 RS 56 HS Others
Marketing Performance – 2015
More than 60% of total projected sales in 2015 has been locked
Customer Base – 2015 Marketing Plan & Strategy
1
2 Secure good quality sales backed by quality buyers and favorable terms of payment
3 Achieve ASP based on tighter discount rate to reference market price
4 Continuously improve quality control by minimizing product deviation and delayed shipment:
full coordination with production and logistics teams
2015 Marketing Strategy
Build well-diversified customer base. Focus to increase sales to end users
63% Locked
51% Locked
2015 CAPEX
In 2015, Toba is planning to realize CAPEX of US$ 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
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
