Second Quarter 2019

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Pelindo III

Global Bond 1st Issuance Date : 1 October 2014 Amount : USD 500 million Tenor : 10 Years

Coupon : 4.875%

2nd Issuance Date : 2 May 2018

Amount : USD 500 million Tenor : 5 Years

Coupon : 4.5%

Shareholder structure As of July, 31st 2019 Government of

Republik Indonesia 100%

Corporate & Bond Ratings As of July, 31st 2019

Moody’s : Baa3

Stable Outlook Fitch : BBB-

Stable Outlook S&P : BBB-

Stable Outlook

Investor Relations &

Corporate Governance Pelindo III - Indonesia Ph: +62 31 3298631 - 37 Fax: +62 31 3295204 Email:

[email protected] www.pelindo.co.id

@pelindo3 pelindo3

@pelindo3 Pelindo III

Investor Memo

Second Quarter 2019

Pelindo III performance bounced back in second quarter 2019.

August , 1st 2019

Improved performance in term of operational and financial occur very significantly in quarter 2, 2019.

The flow of goods in tons in the second quarter of 2019 increased by 4% or recorded 37.309.479 tons compared to the same period in 2018 amounted 35.903.193 tons. The increase in the flow of goods in tons was due to an increase in the commodities of raw sugar, salt, cokes, molasses and palm stearin at the Port of Tanjung Perak. In addition to this, the addition of new customers in the Manyar terminals, the increase of wheat commodity unloading activities from Argentina at the Terminal Teluk Lamong, the increase in CPO loading and unloading at Port of Bagendang and Bumiharjo and coal at the Port of Tanjung Intan became the main drivers for increasing the flow of goods in tons in the second quarter of 2019.

As for container flows, it was recorded at 2.540.192 TEUs, an increase 4% when compared to the second quarter of 2018 amounted 2.451.150 TEUs . This increase was due to the growth of international container flows, especially in Terminal Teluk Lamong.

Flow of ship visits to the Pelindo III working area in the second quarter of 2019 amounted to 146.536.559 GT or an increase of 16% when compared to the same period in 2018 amounted 126.305.101 GT. Other than due to the delegation of service activities for guided and tug services activities in Mandatory First Class Waters of Sungai Danau Satui and Bunati, the increase in ship visits was also caused by an increase in passenger ship visits during the 2019 Idul Fitri transport period.

Operational Performance

2Q2018 2Q2019 Ship Traffic (GT)

in million

16%

146.54 126.30

in million

Container (TEUs)

2.45 2.54

4%

2Q2018 2Q2019

in million

Goods (Ton)

35.90 37.31

2Q2018 2Q2019 4%

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Investor Memo

Financial Performance

A significant increase occurred in the second quarter of 2019, this was due to an increase in operational performance which resulted in an increase in revenue.

In the 2nd quarter of 2019 Pelindo III managed to record revenues of Rp. 4.87 trillion or an increase of 7%

when compared to the 2nd quarter of 2018 which recorded an income of 4Rp. 4.56 trillion. From the total revenue, container service is the largest contributor with a total revenue of Rp. 2.77 trillion, followed by ship service in second place with revenue of Rp. 535.4 billion. while the revenue from non-container goods occupies the third position with a total income of Rp. 512.6 billion. These three revenue posts successfully contributed 78% of the total income received by Pelindo III in quarter 2 of 2019.

Revenue

in trillion IDR

7%

4.56 4.89

2Q2018 2Q2019

in trillion IDR

Expenses

6%

3.02 3.20

2Q2018 2Q2019

in trillion IDR

EBITDA

12%

2.06 2.31

2Q2018 2Q2019

in trillion IDR

Net Income

0.24 1.25

2Q2018 2Q2019

519%

While for operating expenses, it was recorded Rp. 3.20 trillion or an increase of 6% compared to the same period in 2018 where the company's operating expenses were recorded at Rp. 3.16 trillion. 73% of the total operating expenses came from the third party resources expense amounting to Rp. 871.5 billion, employee benefit expense of Rp. 849.6 billion and depreciation and amortization expenses of Rp. 626.4 billion.

A very significant increase was seen in the company's net profit where in the second quarter of 2019 it was recorded at Rp. 1.25 trillion or an increase of 519% when compared to the second quarter of 2018 where Pelindo III only recorded a net profit of Rp. 241 .5 billion. The strengthening of the rupiah against the United States dollar is one of the causes of the significant increase in net profit. With this increase also impacted on the increase in EBITDA, recorded in the 2nd quarter of 2019 Pelindo III EBITDA increased by 12% from Rp. 2.06 trillion in the second quarter of 2018 to Rp. 2.31 trillion

in the 2nd quarter of 2019.

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Investor Memo

Capital Expenditure

Until the second quarter of 2019 the investments absorption amounted to Rp. 1.57 trillion or 57% of the second quarter budget (Rp. 2.7 trillion) or 24% of the total Pelindo III capex in 2019 (Rp. 6.4 trillion). The biggest portion of the absorption of investment in the second quarter of 2019 was roads and buildings amounting to

Rp. 470.62 billion or 30% of the total investment absorption then followed by the port facility building of Rp. 419.89 billion or 27% of the total investment absorption in the second quarter of 2019. As for the investment program realized 33 programs or 80% of the 41 programs that have been announced in 2019.

In general, 8 programs have not been realized because they are still in the design stage as well as the land liberation and certification.

The following is a highlight of several Pelindo III investment programs in 2Q2019

Additional CY Terminal Teluk Lamong

- Time Periode : 2018 - 2020 - Capex : Rp. 400 billion - Progress until 2Q2019 : 60.57%

Fly Over Terminal Teluk Lamong

- Time Periode : 2018 - 2020 - Capex : Rp. 1.3 trillion - Progress until 2Q2019 : 48.73%

Tower Poros Maritim (previously Pelindo Place)

Wharf Construction of Terminal Gili Mas

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Investor Memo

Recent Updates

On 31 May 2019 Standard and Poor's raised Pelindo III's rating from BB + / stable to BBB- / stable for credit rating and senior unsecured issuers. This increase follows an increase from Indonesia's sovereign credit rating from BBB- / A-3 to BBB / A-2, as well as a very close relationship between Pelindo III and the Government.

As of July 23rd, 2019 the Ministry of SOE’s as a shareholder honorably dismissied Mr. Iman Rachman as

Finance Director and appointed him as the President Director of PT Aset Management Company. As of the date the investor memo was published, there has been no subtitute appointed by the Ministry of SOE’s. For the time being the Operations and Commercial Director is appointed as the executor of the duties of the Finance

Director. Besides that, as of as of July 1, 2019, Mr. Rudi Herdiyantoro as the Head of Investor Relations Unit received a promotion as SVP General Affairs / Head of Head Office. Until now his replacement has also not been determined, temporarily related to the service of rating agencies or bond holders can go to Corporate Secretary Mr. Ardhy Wahyu Basuki at the email address [email protected].

Disclaimer

This document containts certain financial information and result of operation, and may also contain certain projections, plans, strategies, and objectives of Pelindo III, that are not statements of historical fact which would be treated as forward looking statements within the meaning of applicable law. Forward looking statements are subject to risks and uncertainties that may cause actual events and Pelindo III future results to be materially different than expected or indicated by such statements. No Assurance can be given that the results anticipated by Pelindo III, or indicated by any such forward looking statements will be achieved.

The financial information provided herein is based on Pelindo III consolidated financial statements in accordance with Indonesian Financial Accounting Standards.

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Investor Memo

Unit GT Ton M3 MMBTU Box Teu’s People Head

2Q2018

29.352

2Q2019

37.514

2Q2018

126.305.101

2Q2019

146.536.559

2Q2018

35.903.193

2Q2019

37.309.479

2Q2018

5,1151.433.178

2Q2019

1.661.044

28% 16% 4% 16%

2Q2018

4.520.509

22Q019

5.792.000

2Q2018

1.987.211

2Q2019

2.041.611

2Q2018

2.451.150

2Q2019

2.540.192

2Q2018

5,1151.474.578

2Q2019

1.748.321

28% 3% 4% 19%

2Q2018

5,11554.925

2Q2019

46.460

(15%)

Flow of Ships Flow of Goods Flow of Containers Flow of Passenggers Flow of Animal

APPENDIX 1

OPERATIONAL PERFORMANCE

2Q2018

4,561

2Q2019

4,885

2Q2018

3,016

2Q2019

3,197

2Q2018

0,241

2Q2019

1,253

2Q2018

5,1152,060

2Q2019

2,295

*in trillion IDR

Revenue Expenses EBITDA Net Proﬁt

7% 6% 12% 519%

2Q2018

1,543

2Q2019

1,686

Opera�onal Income 8%

APPENDIX 2

FINANCIAL PERFORMANCE