Figures in US millions unless stated
2008 2009
2010 2011
2012
Financial Performance
Net revenue 1,869
2,591 2,718
3,987 3,722
Cost of revenue 1,433
1,534 1,889
2,559 2,680
Gross profit
436 1,057
829 1,428
1,043 EBITDA
506 1,067
883 1,474
1,088 Operating income
305 898
638 1,131
836 Net income
96 417
247 552
383 Basic earnings per share EPS US 0.00392 0.01297 0.00773 0.01721 0.01205
Total assets
3,347 4,530
4,470 5,659
6,692 Total liabilities
1,824 2,648
2,438 3,217
3,697 Stockholders equity
1,523 1,882
2,032 2,442
2,995 Interest-bearing debt
993 1,676
1,592 2,105
2,445 Cash and cash equivalents
221 1,199
607 559
500 Net debt
772 477
985 1,546
1,945 Capex
154 106
245 625
490 Free cash flow EBITDA - Capex
352 960
638 849
598
Financial Ratios
Gross profit margin 23.3
40.8 30.5
35.8 28.0
EBITDA margin 27.1
41.2 32.5
37.0 29.2
Operating margin 16.3
34.7 23.5
28.4 22.5
Return on equity 10.6
24.5 12.6
24.7 14.1
Return on assets
3.9 10.6
5.5 10.9
6.2 Return on invested capital
9.5 16.4
9.8 15.1
9.2 Net debt to equity x
0.5 0.3
0.5 0.6
0.6 Net debt to EBITDA x
1.5 0.4
1.1 1.0
1.8 Cash from operations to capex x
0.5 6.6
1.2 1.1
0.9
Operating Statistics
Coal production volume Mt
38.5 40.6
42.2 47.7
47.2 Sales volume Mt
41.1 41.4
43.8 50.8
48.6 Overburden removal Mbcm
159.3 208.5
225.9 299.3
331.5 Planned strip ratio x
4.3 5.0
5.5 5.9
6.4 Coal cash cost, excl. royalty USt
27.2 26.9
31.9 35.8
38.9
We expensed our 2012 deferred stripping cost of
US55.3 million as part of our strategy to manage
our business and balance sheet conservatively.
Our EBITDA was in line with our 2012 guidance of
US1.0 to US1.3 billion.
We reduced our capex spend in 2012 by
purchasing less heavy equipment in order to
preserve cash.
Our balance sheet remained solid with
low leverage and access to cash and long-term
bank facilities totaling US920 million.
Our 2012 production was below guidance of
48-51 Mt as we decided not to sell additional
volumes at a discount. As the market recovered,
we produced a record quarterly volume of
13.3 Mt in 4Q12. We achieved our
planned overburden target of 321 Mbcm,
even as coal production decreased, exposing
more coal and aiding our ability to lower the
strip ratio in 2013. Our coal cash cost was at the bottom
end of 2012 guidance of US39 to US42 per tonne due to below-budget
fuel costs and cost reduction initiatives.
Revenue
EBITDA
Debt
Production
2008 2009
2010 2011
2012
1,869
16.3
2,591
34.7
2,718
23.5
3,987
28.4
3,722
22.5
2008 2009
2010 2011
2012
506 1,067
883 1,474
1,088
27.1 41.2
32.5 37.0
29.2
2008 2009
2010 2011
2012
0.5 0.3
0.5 0.6
0.6
1.5 0.4
1.1 1.0
1.8
2008 2009
2010 2011
2012
38.5 40.6
42.2 47.7
47.2
159.3 208.5
225.9 299.3
331.5
Net Revenue USm Operating margin
EBITDA USm EBITDA margin
Net debt to equity x Net debt to EBITDA x
Coal production Mt Overburden removal Mbcm
Capital market regulations were revised in 2012 to require operating income to
include other expenses. All years have been restated to reflect this revision.
DELIVERING
POSITIVE
ENERGY
2012 ANNUAL REPORT
What Is Positive Energy?
Each time we send Envirocoal, the cleanest thermal coal available on the export market, on time and as ordered to
our loyal customers, we deliver positive energy.
In the passionate work of each of our employees, in the way we conduct ourselves, in the impact we have on those around us and
in the contributions we make to society, we deliver positive energy.
As we turn a non-renewable resource into a renewable one, as we create maximum sustainable value from Indonesian coal,
we deliver positive energy.
It is time to see coal for what it really is: positive energy. And in this exciting time of growth in Indonesia and the Asia-Pacific
region, it is a great honor to be able to make such a positive impact.
At Adaro, we are different from the rest in what we produce and how we behave. We are doing more than just building a great coal
and energy company, we are Delivering Positive Energy.
DELIVERING
POSITIVE
ENERGY
DELIvERINg POsITIvE ENERgY
4
In Print For a copy of this
report in English or Indonesian,
e-mail us at investor.relations
ptadaro.com As a PDF
Download this report in English
or Indonesian from www.adaro.com
investor_relations reports
On adaro.com see our web
version of the report at
www.adaro.com On your tablet
Download the Adaro Annual
Report app in the Apple app store.
Our Vision
To be a leading Indonesian mining and energy group.
Our Mission
We are in the business of
mining and energy to:
• Satisfy our customers’ needs. • Develop our people.
• Partner with our suppliers. • Support community and national development.
• Promote a safe and sustainable environment. • Maximize shareholder value.
This Report Is Available:
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114 46
148
162
176
192
116 secrets to success
173 A Note on Indonesias Regulatory Environment
182 Adaro Energy Perception survey 2012
289 Obtaining previous years annual reports 54 Coal: A
Rough guide 59 global Coal
Markets 2012 61 Maritime
Freight 2012 63 What Is
Envirocoal? 69 Introducing
Envirocoal E4700
127 In Memoriam Andre Mamuaya
189 Corporate Identity Contact Details
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ADARO ENERgY 2012 ANNUAL REPORT
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OUR WORLD
OUR THOUGHTS
OUR BUSINESS
OUR PEOPLE
OUR COMMUNITIES
OUR GOVERNANCE
OUR INVESTORS
OUR FINANCES
292 GLOSSARY
8 Our Business at a glance
10 2012 as It Happened 11 Why Invest in Adaro?
25 Our Awards in 2012
30 A Letter from the
Commissioners
34 A Letter from the Directors 42 President Directors
Message 2013
150 Quality, Health, safety
Environment
156 social Engagement: Our
Community Responsibilities
48 Corporate Overview 62 Coal sales Review
70 Operations Review 86 Financial Review
92 Investing for the Future 102 Exploration Reserves
118 Commissioner Proiles 121 Director Proiles
128 Adaro Energy Management 134 Human Resources
138 Yearbook 2012: Our
Winning Team in Photos
164 Corporate governance 169 Risk Management
178 Investor Relations 184 shareholder Information
195 Directors’ statement 196 Independent Auditor’s
Report
197 statements of
Financial Position
Adaro Energy 2012 Annual Report
DELIvERINg POsITIvE ENERgY
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ADARO ENERgY 2012 ANNUAL REPORT
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IN THIS SECTION 8
Our Business at a Glance 10 2012 as It Happened
11 Why Invest in Adaro? 25 Our Awards in 2012
OUR
WORLD
I want Adaro to give the best performance it can to the nation,
to the people. Why? It’s very simple. If I can contribute to the
country, and later the country becomes a great nation, people
become prosperous. They will need more electricity, and the
government will need more power plants and more coal.
Garibaldi Thohir, President Director Chief Executive Officer
PT Adaro Eksplorasi
Indonesia AEI
Mining exploration 100 owned by
Adaro Energy
PT Adaro Persada
Mandiri APM
Land management 100 owned by
Adaro Energy
PT Adaro Mining
Technologies
Coal research and development
100 owned by Adaro Energy
Adaro Exploration Drilling Services
Adaro Land Asset Management
Adaro Mining Technologies
Jakarta HQ Barito River Taboneo
offshore anchorage
1
2 2 3
3
Lampung South
Sumatra West
Sumatra North
Sumatra
Jambi Riau
SINGA P OR E
Bengkulu
West Java West
Kalimantan M A L A
Central Java
What Is Adaro? We focus on integrated
coal mining through subsidiaries. Our principal
location is in South Kalimantan, where we mine Envirocoal,
a sub-bituminous, moderate calorific value coal producing
ultra-low sulphur, ash and NOx emissions. We are vertically integrated,
with pit-to-power subsidiaries including mining, barging, shiploading, dredging, port
services, marketing and power generation. Our strategy is to focus on organic growth,
improve efficiency and cost control and further integrate our power generation division. In this
opening section, see why Adaro is an exceptional company and an excellent prospect for investors.
8
Our Business at a Glance
‘From Pit to Port to Power’ — Adaro Energys subsidiaries are vertically integrated for maximum cost efficiency
PT Adaro Indonesia AI
Mining license holder 100 owned by Adaro Energy.
Operates a coal concession in south Kalimantan currently
with three mines: Tutupan, Wara and Paringin. It produced
47.2 million tonnes of Envirocoal sub-bituminous
coal in 2012, mostly for blue-chip power utilities.
PT Mustika Indah Permai MIP
Mining license holder, South Sumatra 75. Pre-production
ongoing for sub-bituminous coal.
PT Bukit Enim Energi BEE
Mining license holder, South Sumatra 61.04 . geological
studies for thermal coal mine.
PT Bhakti Energi Persada BEP
Mining license holder, East Kalimantan 10.22 with
option up to 90. Developing mine for low-rank coal.
IndoMet Coal Project IMC
JV with BHP Billiton, East and Central Kalimantan 25.
Developing metallurgical coal.
1 1
1 1
1 1
2 3
4
5
Adaro Mining Assets PT Alam Tri Abadi, 100 AE owned
1 2
3 4
5
1
DELIvERINg POsITIvE ENERgY
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3
PT Saptaindra Sejati SIS
Mining and hauling contractor 100
owned by Adaro Energy
PT Jasapower Indonesia JPI
Operator of overburden crusher
and conveyor 100
PT Servo Meda Sejahtera SMS
Coal hauling road operator 35
I N D O N E S I A
1 1
1 5
2 4
Adaro Indonesia mines at Tabalong
Central Kalimantan
East Kalimantan
Southeast Sulawesi
Central Sulawesi
West Sulawesi
Gorontalo
East Java
South Kalimantan
South Sulawesi
M A L AYSI A
PT Makmur Sejahtera
Wisesa MSW
Operator of 2x30MW coal- fired mine-mouth power
plant 100
PT Bhimasena Power Indonesia
BPI
Partner in 2x1,000MW power generation project
in Central Java 34
South Kalimantan Power Project
Partner in 2x100MW power generation project 65
Coaltrade Services
International Pte Ltd
Marketing 100 owned by
Adaro Energy Trading thermal
coal, agent for Adaro and
third-party coal producers and
customers.
PT Maritim Barito
Perkasa MBP
Barging and shiploading 100
PT Harapan Bahtera
Internusa HBI
Third-party barging and shiploading 100
PT Sarana Daya Mandiri
SDM
Dredging contractor in Barito River mouth
51.2
PT Puradika Bongkar Muat
Makmur PBM
Shiploading and barging management
100
PT Indonesia Multi-Purpose
Terminal IMPT
Port operator 85
PT Indonesia Bulk Terminal
IBT
Coal and fuel terminal 100
2 1
3 1
3 4
2 5
6
Adaro Logistics Services PT Adaro Logistics, 100 owned by Adaro Energy
Adaro Power PT Adaro Power, 100 owned by AE
Adaro Marketing Trading
Adaro Mining Services
2 1
3 1
Adaro Mining
Assets Adaro
Exploration Drilling
Services Adaro
Mining Technologies
Adaro Land Asset
Management
Adaro Energy Group
Adaro Mining
Services Adaro
Logistics Services
Adaro Power
Adaro Marketing
Trading
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Adaro Marketing Trading
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DELIvERINg POsITIvE ENERgY
10 Aug 21
Andre Mamuaya, Director, Corporate Affairs, PT Adaro
Energy, passed away. In memoriam, page 127
Jan Adaro
Energy share
price 2012
May sep
Mar Jul
Nov Feb
Jun Oct
Apr Aug
Dec
2012 as It Happened
March 22
We announced the JORC- Compliant Coal Resources
and Reserves for PT Mustika Indah Permai MIP. The
JORC-Compliant Coal Resources were estimated
at 286.4 million tonnes, of which 272.6 million tonnes
were estimated as JORC- compliant coal reserves.
Details on page 106-108
May 29
Our barging and shiploading subsidiary, MBP, secured
a Us200 million, 7-year 5.75-year average life
loan from a group of 10 foreign banks.
Details on page 253
July 25
Our subsidiary, AI, received the environmental impact
assessment AMDAL approval from the
Ministry of Environment to produce 80 million
tonnes of coal annually. some of the assessments
include a detailed environmental impact
analysis, an environmental management plan and
an environmental monitoring plan.
Details on page 153
Nov 27
Our subsidiary, AI, received the Aditama gold award
2012 for environmental management excellence
in the coal sector. The award is given to the best
performing companies for environmental management
excellence in the coal, mineral and geothermal
sector. AI received this award for the third
consecutive year.
Details on pages 152-153
April 27
We held our Annual general Meeting of shareholders
to approve the use of 47.08 of the company’s
net income for 2011 to be paid as dividend an interim
amount of Us75.17 million paid on Dec. 9, 2011, and the
remaining Us183.92 million on June 12, 2012.
Details on page 188
May 28
We entered into a convertible loan and share subscription
agreement with the option to provide a loan to BEP for up
to Us500 million, which is convertible into equity of up
to 51 in BEP for a period up to three years Option One,
and an option agreement which we are granted to
acquire BEP shares from the controlling shareholders of
BEP by offering newly issued shares of Adaro Energy
Option Two.
Details on page 234
Nov 29
Our subsidiary Adaro Indonesia received the gold
PROPER award, the highest standard in Indonesian
environmental rehabilitation management, becoming
the irst mining company to do so since the award
was initiated in 2002. AI previously won the green
PROPER award, one level below the gold award, for
four consecutive years.
Details on page 152
1,770
1,590
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ADARO ENERgY 2012 ANNUAL REPORT
Why Invest in Adaro? For Our Core Strengths...
Our major shareholders
and governance Our strategy
to create long-term value
Our record for production growth
Our respect for people and nature
Our coal quality and reserves
Our low cost of production
Our focus on the Asian
growth story
Our financial strength
Our vertically integrated business
1
5
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6
10
3
8 4
Page 15 Page 16
Page 12 Page 14
Page 20 Page 22
Page 18 Page 19
Page 24
Our experienced management team
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DELIvERINg POsITIvE ENERgY
12
Our Coal Quality and Reserves
Adaro controls or has options on 12 billion tonnes of coal resources — including 1.1 billion tonnes of reserves
— all in full compliance with JORC standards.
We currently produce out of a single concession in South Kalimantan — the largest single-site
mine in the southern hemisphere — but we
have acquired assets in all of Indonesias four
key coal-producing provinces. For our
core operation we have a first-
generation Coal Cooperation
Agreement, a secure contract with the Indonesian government.
Our coal is marketed as Envirocoal due to its extremely low ash,
nitrogen and sulphur content with heat values ranging from
4,000 kcalkg to 5,000 kcalkg.
12 billion
tonnes
of coal
resources
1.1 billion tonnes
of coal reserves
Read More
Resources reserves Page 102
About Envirocoal Page 63
Coal acquisitions Pages 96-99
Includes option to control 7 billion tonnes
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1-2
Envirocoals average ash content, compared to up to 20 among
other globally exported coals.
0.9
Envirocoals average nitrogen content, compared to up to 2.5 among
other globally exported coals.
0.2
Envirocoals average sulphur content, compared to up to 2.0 among
other globally exported coals.
