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PT Toba Bara Sejahtra Tbk ( Toba )
Company Presentation
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra (the “Company”) and have not been
independently verified. No representation or warranty, expressed or implied, is made and no reliance
should be placed on the accuracy, fairness or completeness of the information presented or contained in
these materials. The Company or any of its affiliates, advisers or representatives accepts no liability
whatsoever for any loss howsoever arising from any information presented or contained in these materials.
The information presented or contained in these materials is subject to change without notice and its
accuracy is not guaranteed.
These materials 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.
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Content
Marketing & Financial Highlights
4
1
Corporate Profile & Updates
2
Industry Updates
3
Operational Highlights & Planning
CSR & Environmental Highlights
Corporate Profile & Updates
5
Toba comprises three coal companies, Adimitra Baratama Nusantara (ABN), Indomining (IM) and Trisensa
Mineral Utama (TMU), which hold adjacent concession areas located in East Kalimantan, Indonesia
Toba in Brief
•
Substantial and diversified thermal coal
reserves and resources
o
JORC-compliant proved and probable reserves of
147 MM tonnes and measured, indicated and
inferred resources of 236 MM tonnes
o
4 coal brands with calorific values ranging from
4,700 - 5,800 Kcal / kg GAR
•
Strong growth profile
o
Produced 5.2 MM tonnes of coal in 2011 and is forecasted
to produce around 5.7 MM tonnes of coal in 2012
o
Prime location provides the operational cost edge to
grow as a logistical & operational center for the area
o
Continued exploration effort to increase our Reserves and
Resources. Current reserves only account for 52% of our
total area has been explored
June 2012 Revenue
%
June 2012 Net Income
%Resources
%Total: 147 MM Tonnes
6
Toba’s Ownership Structure
• 20-year Production Operation Mining Permit ( IUPOP ) expiring in December 2029
– IUPOP was converted from a Kuasa Pertambangan ( KP ) in 2009
• IUPOP expiring in June 2013
– IUPOP was converted from a KP in 2010
• In the process of renewing its IUPOP – Expects to receive renewal of 10-year
IUPOP by end 2012
• 13-year IUPOP expiring in December 2023
Davit Togar Panjaitan (1) PT Bara Makmur Abadi
PT Toba Sejahtra ( TS ) PT Sinergi Sukses Utama Roby Budi Prakoso
73.8% 0.8% 6.2% 5.1%
PT Toba Bumi Energi ( TBE )
99.99% (2)
99.99% (2)
3.6%
ABN Minorities 49.0%
51.0% 99.92% (2)
Public
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Toba’s Majority Shareholder
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
• A privately owned group founded in 2004 with interests in energy and plantations
• Its business segments are as follow:
–Energy: Owns 5 coal mining concessions through Toba and PT Kutai Energi. All of TS' mines are characterized by low production costs and favorable proximity to ports
–Oil & Gas: In the exploration phase of the 4,567 sq miles South East Madura Block through subsidiary E&P company PT Energi Mineral Langgeng
–Power Plant: Operates a 30 MW coal-fired power plant in Palu, Central Sulawesi and is developing a 120 MW greenfield power plant in Senipah, East Kalimantan
–Agribusiness: A 25% stake in a 12,000 ha palm oil plantation in East Kalimantan
• 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
Further integrate
ABN, Indomining and
TMU to maximize
efficiency and cost
competitiveness
• Recent restructuring will align IM and TMU shareholders’ interests
and facilitate further integration of
operations across the three concessions
• Benchmarking and sharing of best practices between departments and functions
• Optimize and coordinate mine planning and logistics
• Centrally coordinate and streamline corporate finance, legal, human resource and CSR functions
1
Increase coal reserve
and resource base
through additional
exploration and
potential acquisitions
• Continue exploration activities to increase proven and probable reserves as only 52% of total concession area of 7,087 hectares has been explored to JORC standard
• Consider opportunities to acquire coal
concessions with significant reserves
3
Strengthen existing
and develop new
customer
relationships
• Supply a higher proportion of sales volume to end users, while maintaining relationships with existing coal traders
• Target customers in Japan, Taiwan, South Korea, China and Hong Kong, South East Asia and India
4
Continue to focus on
health and safety,
environmental track
record and
commitment to CSR
• Maintain and enhance high international operating standards, utilize automated mining methods to minimize accidents and enhance safety
• Foster community ties through development programs as well as job creation
5
Organically increase
coal production levels
• Expand coal production through increased production and mine development activities
• Strengthen
relationships with third party mining
contractors and work closely with them to improve their productivity
2
9
Toba’s Initial Public Offering
Listed on IDX
06 July 2012
Number of shares offered
210.681.000 shares or 10.47%
IPO Proceed
IDR 400,293,900,000
Anchor Investor
Barings Private Equity (8% at IPO)
Competitive cost producer of coal in Indonesia
Substantial reserves and resources to support significant production expansion
Solid operating track record and visible earnings growth
Well-positioned to capture growth opportunities in thermal coal markets
Why Invest in Toba
Wide range of coal quality grades to meet customers
’
requirements
Strong relationships with multinational customers
11
2007
• IM commenced
production
2011
• TMU commenced
production
• Toba production
hits 5m tons
2008
• ABN commenced
production
• Operational
adjustment due to
a drop in coal
market
2010
• TS acquired the remaining share
for IM from minority shareholder
• Toba acquired 51.0% of ABN,
52.5% of TBE (IM
’
s shareholding
company) and 51.0% of TMU
• Toba production hits 4m tons
Key Milestones
Strong track record of acquisitions, development of greenfield mines, rapid production ramp-up and
experience to adjust operation in a downmarket
2007
2008
2009
2010
2011
2012
2012
• Toba acquired the
minorities
’
shares in
TBE and TMU
• IPO/Listed on IDX,
6
thJuly 2012
2009
Industry Updates
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Price of Newcastle Index Price dropped in
Q2…
80
110
140
Jun-10 Dec-10 Jun-11 Dec-11 Jun-12
$/
to
n
Impact of Global Economy Coal Industry
… due to the concerns over global
economic slowdown
IMF GDP Forecast for 2012
Sep 2011 (Updated)
Apr 2012 (Updated)
1.8%
2.1%
1.4%
0.0%
9.0%
8.2%
2.3%
2.0%
7.5%
6.9%
• The Newcastle Thermal Coal Price Index went from
US$108.88 in April 2012 to US$101.21 in May 2012.
Then to US$91.73 in June 2012.
• The Index Price are typically used as a basis for Spot
and Index Linked Long Term contract sales, before
discounts
Source: World Bank
Source: IMF
• Concerns regarding the instability over Greece, Spain,
and the EU were highlighted given the surprise of
Greece election result
• European countries are the biggest trading partner for
China
However, thermal seaborne coal price may
have seen the floor…
Response by the Coal Industry
… as the price of imported coal became
cheaper than domestic coal in China...
… and coal producers limits production
growth..
“ITMG lowers coal production target in 2012” – Kontan,
Aug 24, 2012
“Indonesia Adaro cuts 2012 Thermal coal output target
to 48-51 million mt” – Platts, Aug 1, 2012
“Output cuts help steady China’s coal prices, outlook” –
80
110
140
Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12
$/
to
n
Source:Globalcoal
Source: CLSA Asia-Pacific Market, CEIC, CCTD, globalCoal
-100
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 (US$/tonne)
Export
Import Spread (Domestic -…
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Operational Highlights & Planning
2.0
3.9
5.2
2.5
3.2
2009
2010
2011
2012
Actual Est
Production
Historical
MM Tonnes
Consolidated Production Performance
Samarinda Mahakam River
ABN Jetty
Muara Jawa Muara Berau
Makassar Strait
Major City Jetty
Transshipment Point IM Jetty
NDM Jetty
Kutai Energi Jetty
IM
Operation Focus for 2012 – 2013
• Integrate the operation of all 3 assets that are
adjacent to each other to maximize
profitability
• Update mineplans to focus on profitability
growth over volume growth given the current
price of coal
Result of H1 2012
• Despite challenging condition, we maintained
our profitability because our prime location
gives us our operational cost advantage
• This advantage provides an investment
margin of safety to our investors
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1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
Production & Stripping Ratio
Thousand Tonnes
ABN Operational Update
Major Quarterly Updates
1. The production level is higher compared to H1 2011
but is behind the expected target due to higher SR,
and higher rainfall delay compared to plan
2. ABN have been making adjustment to its mineplan to
lower its SR
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
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ABN Operational Advantages and Focus
Barge Loading Jetty Under Pass Coal Hauling
Short coal hauling
distance 4km
Crusher Capacity
High Built Cap
10 MM TPY
Loading Speed of
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IM Operational Update
Major Quarterly Updates
1. IM Operations was impacted from higher mining SR
and lower level of equipment productivity from
contractor
2. IM have worked on reducing the SR and began
negotiation with the contractor to improve equipment
productivity
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
Production & Stripping Ratio
Thousand Tonnes
10.1x 8.6x 8.8x
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IM Operational Advantage and Focus
Coal Hauling
Overland Conveyor
Crusher Capacity
Short coal hauling
distance < 5km
CPP Ramp up to
6MM TPY
Conveyor for TMU
& Others
Joint Operation
21
TMU Operational Update
Major Quarterly Updates
1. Mining performance was lower as the slippery road
condition due to high level of rainfall and higher
stripping ratio
2. Adjustment to the mineplan was made that would
lower the mining SR
39
23
59
4Q11
1Q12
2Q12
Production & Stripping Ratio
Thousand Tonnes
24.5x
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TMU Operational Advantage and Focus
Hauling Road
Build 16km Road
to ABN
Samarinda Mahakam River
Muara Berau
Makassar Strait
Kutai Energi Jetty
IM
ABN
~55 Km (total ~120 Km)
kilometers 0 12 24 36 48
T M U
Develop clients
for Infrastructure
Exploration in
2500+ ha
Exploration
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Marketing & Financial Highlights
Toba’s has a wide range of coal
products…
TM
Ash
TS
Calorific Value
(kcal/kg)
(% GAR) (% GAD) (% GAD)
GAR
GAD
ABN
ABN 52
25
7
0.8
5,200
5,800
ABN 58
19
6
0.8
5,800
6,250
IM
Indomining
19
8
0.9
5,700
6,200
TMU
Trisensa-47
28
5
0.4
4,700
5,400
Coal Products
Marketing Highlight
Location of End Users
HONG KONG
MALAYSIA
TAIWAN
JAPAN
SINGAPORE
SOUTH KOREA CHINA
INDIA
INDONESIA THAILAND
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Marketing Highlight
Major Customers
DRAGON ENERGY GROUP
Major customers provide the stable
business support for Toba’s marketing…
…at zero external cost because Toba
handles our marketing internally
Toba’s Marketing Operations
Central Marketing Operations of all 3
subsidiaries
Internally developed customer based that
allows Toba to have low marketing cost
Balance mix of long term contract, short
term and spot
Active participation in reputable
conference and trade shows to promote
the Toba brand
Marketing development to sell directly to
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481
274
101
2009
2010
2011
Notes:
1. USD/IDR exchange rate of 1:9,400, 8,991 and 9,068 as of December 31, 2009, 2010 and 2011, respectively (Source: Bank Indonesia)
TBS has achieved significant revenue and earnings growth driven by strong growth in production and ASP
combined with its competitive cost position
Revenue
(1)2009
2010
2011
10
58
114
10%
21%
24%
2009
2010
2011
Toba Financial Summary – Key Financials
27
Toba Financial Summary – Key Financials (June)
Revenue
US$ MM
Net Income
US$ MM
EBITDA
US$ MM
•
Toba’s strengths in operation was proven as revenue continue to grow. This is further highlighted given
the subdued market condition
•
Improvement and adjustments actions are being taken to return future EBITDA and Net Income to the
similar previous level
66
26
H1 2011
H1 2012
44
19
H1 2011 H1 2012
194 203
Revenue Drivers
ASP Drivers
Pricing Mechanism:
Index-linked vs. Spot
Contract Type:
Long-term vs. Short-term vs. Spot
Coal Quality
Export vs. Domestic Mix
Premium vs. High-growth Markets
Customer Type:
End-users vs. Coal-traders
Toba
Historical ASPs
US$ / Tonne
50,1
65,5
93,9
2009
2010
2011
95,0
82,0
H12011
H12012
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Cash Margins
(1)US$ / Tonne
TBS
ABN
Indomining
40.4
40.6
47.7
54.6
2009
2010
2011
35.8
40.2
2009
2010
2011
FOB Cash Cost
Margin
ASP
37.7
40.3
2009
2010
2011
Note:
1. Cash margin equals ASP minus FOB cash cost including royalties
Cash Cost Analysis and Drivers
Toba FOB Vessel Cash Cost
(1)%
Toba FOB Vessel Cash Cost per Tonne
US$ / Tonne Sold2009 2010 2011 H1 2012 2009 – H1 2012
OB Removal 23.2 25.7 38.6 43.4 +20.2
Barging &
Floating Crane 7.4 5.0 5.7 5.7 (1.7)
Royalty 3.2 4.0 6.0 4.8 +1.6
Coal Extraction
& Hauling 1.5 2.8 2.3 2.8 +1.3
