20140100 toba performance guidance 2013 2014 tbs only
PT TOBA BARA SEJAHTRA Tbk
PERFORMANCE GUIDANCE
1
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.
2
Strategic Locations of Toba’s Three Concessions
Major City
Jetty
Transhipment Point
TMU - IM Hauling Road
Major city is
less than 50
km
Furthest pit to
jetty 25km | with
closest one ~5km
Samarinda
~55 Km
(total ~120 Km)
Sungai Mahakam
~22km
IM
ABN
TMU
ABN
Muara
Berau
~ 5 km
IM Jetty
Close proximity
transhipment
Makassar Strait
point & jetty
ABN Jetty
Kutai
Energy
~ 120 km
Balikpapan
Adjacent
locations for
all 3 mines
~65 Km
Muara Jawa
Toba owns all infrastructures (coal processing plants, overland conveyors, and jetties), giving
significant operating leverage vs other concessions in surrounding areas
Toba’s business units: ABN = Adimitra Baratama Nusantara; IM = Indomining; TMU = Trisensa Mineral Utama
3
Toba’s Performance Guidance
Operation
2012
2013
Changes
2014E
Changes
Production Volume (million tons)
5.6
6.5
17.0%
7.2 – 7.8
10.0 – 20.0%
Stripping Ratio (x)
14.9
13.4
(10.0%)
12.9 – 13.3
(0.7%) – (3.7%)
Average Selling Price (ASP) (US$/ton)
72.5
67.0 – 70.0
(3.0%) – (7.5%)
63.0 – 67.0
(4.3%) – (6.0%)
Notes: - Production target range is expected to be above average Indonesian coal sector production growth of 5.0% – 10.0% for 2014
- All figures are rounded up to one decimal point
Highest 4Q production
volume throughout
corporate history
Coal Production 2008 – 2014
In Million Tons
TMU
IM
Above 2013
internal guidance
of 5.8-6.4m
5.2
7.2 – 7.8
In million tons
1,5
ABN: Expecting 2.0% –
3.0 % production growth
5.6
IM: Expecting 20.0% –
30.0% production growth
0.8
TMU: Expecting 60.0% – 70.0%
production growth
2010
1.2
1
2.0
2009
2011
2012
2013
1.6
1.5
6.5
4.0
2008
1.9
2
ABN
2014e
2014E
0.9
0,5
0
4Q2009
4Q2010
4Q2011
4Q2012
4Q2013
4
2013 Achievements of Infrastructure Projects
TOBA continues its strategy to lower cost via, inter alia, investment in infrastructure
Project
1
17 km Hauling Road
from TMU to ABN *)
Second Underpass at
2 ABN
Workshop at ABN
New CPP (Coal
3 Processing Plant) at
IM
Background
Future Benefits
% Completion
To streamline internal
logistical flow for TMU
To obtain cost efficiency and
allow for TMU production ramp
up
100%
To support
infrastructure facilities
at ABN
To lower OB (over burden)
overhaul dump distance
100%
To accommodate
maintenance and
repair facilities for
mining equipment
To ensure streamlined
operational activities related to
heavy equipment and
supporting equipment
100%
To increase coal
production capacity at
IM from 3 mn tpa to 6
mn tpa **)
To process TMU’s coal ,
reduce costs, and boost
stockpile capacity of up to 16
tpa from 13 tpa presently
91%
Target
1H 2014 ***)
Notes : *) Total distance from TMU -> ABN -> IM Jetty is approximately 22 km
**) Tpa : Tons per annum
***) In process of transferring conveyor from old CPP to new CPP
1
2
3
5
2013 Sales and Marketing Activities
South Korea
10%
Japan
China
43%
Sales (million tons)
ABN
IM
TMU
2011
2012
3.7
1.8
-
4.2
1.1
0.2
2013*)
4.7
1.4
0.7
Note: * )This includes inter–subsidiaries sales
Sales by Product
Hong Kong
Taiwan
19%
Others
18%
GAR 52 ABN
18%
Vietnam
Thailand
India
14%
GAR 47 TMU
10%
GAR 56HS ABN
22%
Malaysia
GAR 58LS IM
8%
GAR 56RS ABN
24%
Note: Sales to export destinations ie. Vietnam, Thailand , Hong Kong,
Malaysia and Japan each below 3%
Initiatives Undertaken:
Commenced building well-diversified customer base and export market coverage
Generated good quality sales backed by quality buyers and favorable terms of payment
Achieved tighter discount rate to reference market price with ASP of US$ 67-70/ton
6
2013 CAPEX
30.000
In US$’000
25.000
3.456
20.000
1.807
528
2.236
4.319
15.000
27.100
5.230
10.000
22.970
5.394
5.000
0
CPP
Land comp.
Vehicles,
machineries and
heavy eq
Hauling road
Underpass
Exploration
Others
Realized CAPEX Planned CAPEX
In 2013, Toba realized Capex of US$ 19 - 23 million, mainly allocated for :
Land compensation,
Construction of new CPP at IM,
Completion of 17 km hauling road from TMU to ABN
Construction of ABN’s second underpass
Salient Point
Toba successfully generated cost savings of around US$ 4 – 8 million from total initially-planned capex of
US$ 27 million slated for 2013
7
FY 2014 CAPEX
Allocated US$
US$ ~9 million
Others
4%
Land
Compensation
31%
Palm Oil Mills
38%
PKU (Perkebunan Kaltim Utama I)
Exploration
5%
Equipment
8%
Conveyor
9%
Total area granted by government: 8,633 ha
Plantation permit expires in 2036
Planted area: 2,896 ha
Buildings
5%
In 2014, Toba targets capex of US$ 15 – 24 million (including PKU), mainly allocated for :
Land compensation at TMU
Exploration at TMU
Operational and Infrastructure maintenance at ABN and IM
US$ -9 million for Palm Oil Mill
Salient Points
Toba’s 2014 capex growth supports its on-going growth strategy amidst cutbacks among major
industry producers
Majority of capex is expected to focus on TMU as it will become Toba’s main growth driver
8
What to Expect from Here…
Inherent Challenges
Continued low
coal prices due
to on-going
supply and
demand
imbalance
Unfavorable
external and
domestic
government
policy-making
Deteriorating
and more
sporadic
weather
conditions
(rainfall)
Depleting
reserve life from
continued
decline in coal
prices
2013 Theme: “Consolidation & Efficiency”
To anticipate this, Toba successfully overcame its majority obstacles
during 2013. The highlights included:
Creating new mine plan executable for the current low coal price
environment
Renegotiating with third party contractors on new rates
Building and completing hauling road in time to enable
production ramp up and cost savings
Increasing infrastructure capacity to anticipate production growth
Deploying effective marketing strategy targeting more diversified
customer base & export market coverage,
better quality
customers, while maximizing ASP
2014 Theme: “Growth & Integration”
Entering 2014, Toba has become a stronger and more resilient
company, and is poised to continue its “sustainable and profitable
production growth” strategy through:
Maintaining cost efficiency in all levels
Increasing production growth at acceptable level
Seeking increased reserves through internal exploration and
external acquisitions
Strengthening quality of human resources at every level of the
organization
Increasing marketing strength via targeting higher quality
customers, while optimizing ASP
Maximizing return to shareholders through profit growth and
dividend
9
PT Toba Bara Sejahtra Tbk
www.tobabara.com
PERFORMANCE GUIDANCE
1
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.
2
Strategic Locations of Toba’s Three Concessions
Major City
Jetty
Transhipment Point
TMU - IM Hauling Road
Major city is
less than 50
km
Furthest pit to
jetty 25km | with
closest one ~5km
Samarinda
~55 Km
(total ~120 Km)
Sungai Mahakam
~22km
IM
ABN
TMU
ABN
Muara
Berau
~ 5 km
IM Jetty
Close proximity
transhipment
Makassar Strait
point & jetty
ABN Jetty
Kutai
Energy
~ 120 km
Balikpapan
Adjacent
locations for
all 3 mines
~65 Km
Muara Jawa
Toba owns all infrastructures (coal processing plants, overland conveyors, and jetties), giving
significant operating leverage vs other concessions in surrounding areas
Toba’s business units: ABN = Adimitra Baratama Nusantara; IM = Indomining; TMU = Trisensa Mineral Utama
3
Toba’s Performance Guidance
Operation
2012
2013
Changes
2014E
Changes
Production Volume (million tons)
5.6
6.5
17.0%
7.2 – 7.8
10.0 – 20.0%
Stripping Ratio (x)
14.9
13.4
(10.0%)
12.9 – 13.3
(0.7%) – (3.7%)
Average Selling Price (ASP) (US$/ton)
72.5
67.0 – 70.0
(3.0%) – (7.5%)
63.0 – 67.0
(4.3%) – (6.0%)
Notes: - Production target range is expected to be above average Indonesian coal sector production growth of 5.0% – 10.0% for 2014
- All figures are rounded up to one decimal point
Highest 4Q production
volume throughout
corporate history
Coal Production 2008 – 2014
In Million Tons
TMU
IM
Above 2013
internal guidance
of 5.8-6.4m
5.2
7.2 – 7.8
In million tons
1,5
ABN: Expecting 2.0% –
3.0 % production growth
5.6
IM: Expecting 20.0% –
30.0% production growth
0.8
TMU: Expecting 60.0% – 70.0%
production growth
2010
1.2
1
2.0
2009
2011
2012
2013
1.6
1.5
6.5
4.0
2008
1.9
2
ABN
2014e
2014E
0.9
0,5
0
4Q2009
4Q2010
4Q2011
4Q2012
4Q2013
4
2013 Achievements of Infrastructure Projects
TOBA continues its strategy to lower cost via, inter alia, investment in infrastructure
Project
1
17 km Hauling Road
from TMU to ABN *)
Second Underpass at
2 ABN
Workshop at ABN
New CPP (Coal
3 Processing Plant) at
IM
Background
Future Benefits
% Completion
To streamline internal
logistical flow for TMU
To obtain cost efficiency and
allow for TMU production ramp
up
100%
To support
infrastructure facilities
at ABN
To lower OB (over burden)
overhaul dump distance
100%
To accommodate
maintenance and
repair facilities for
mining equipment
To ensure streamlined
operational activities related to
heavy equipment and
supporting equipment
100%
To increase coal
production capacity at
IM from 3 mn tpa to 6
mn tpa **)
To process TMU’s coal ,
reduce costs, and boost
stockpile capacity of up to 16
tpa from 13 tpa presently
91%
Target
1H 2014 ***)
Notes : *) Total distance from TMU -> ABN -> IM Jetty is approximately 22 km
**) Tpa : Tons per annum
***) In process of transferring conveyor from old CPP to new CPP
1
2
3
5
2013 Sales and Marketing Activities
South Korea
10%
Japan
China
43%
Sales (million tons)
ABN
IM
TMU
2011
2012
3.7
1.8
-
4.2
1.1
0.2
2013*)
4.7
1.4
0.7
Note: * )This includes inter–subsidiaries sales
Sales by Product
Hong Kong
Taiwan
19%
Others
18%
GAR 52 ABN
18%
Vietnam
Thailand
India
14%
GAR 47 TMU
10%
GAR 56HS ABN
22%
Malaysia
GAR 58LS IM
8%
GAR 56RS ABN
24%
Note: Sales to export destinations ie. Vietnam, Thailand , Hong Kong,
Malaysia and Japan each below 3%
Initiatives Undertaken:
Commenced building well-diversified customer base and export market coverage
Generated good quality sales backed by quality buyers and favorable terms of payment
Achieved tighter discount rate to reference market price with ASP of US$ 67-70/ton
6
2013 CAPEX
30.000
In US$’000
25.000
3.456
20.000
1.807
528
2.236
4.319
15.000
27.100
5.230
10.000
22.970
5.394
5.000
0
CPP
Land comp.
Vehicles,
machineries and
heavy eq
Hauling road
Underpass
Exploration
Others
Realized CAPEX Planned CAPEX
In 2013, Toba realized Capex of US$ 19 - 23 million, mainly allocated for :
Land compensation,
Construction of new CPP at IM,
Completion of 17 km hauling road from TMU to ABN
Construction of ABN’s second underpass
Salient Point
Toba successfully generated cost savings of around US$ 4 – 8 million from total initially-planned capex of
US$ 27 million slated for 2013
7
FY 2014 CAPEX
Allocated US$
US$ ~9 million
Others
4%
Land
Compensation
31%
Palm Oil Mills
38%
PKU (Perkebunan Kaltim Utama I)
Exploration
5%
Equipment
8%
Conveyor
9%
Total area granted by government: 8,633 ha
Plantation permit expires in 2036
Planted area: 2,896 ha
Buildings
5%
In 2014, Toba targets capex of US$ 15 – 24 million (including PKU), mainly allocated for :
Land compensation at TMU
Exploration at TMU
Operational and Infrastructure maintenance at ABN and IM
US$ -9 million for Palm Oil Mill
Salient Points
Toba’s 2014 capex growth supports its on-going growth strategy amidst cutbacks among major
industry producers
Majority of capex is expected to focus on TMU as it will become Toba’s main growth driver
8
What to Expect from Here…
Inherent Challenges
Continued low
coal prices due
to on-going
supply and
demand
imbalance
Unfavorable
external and
domestic
government
policy-making
Deteriorating
and more
sporadic
weather
conditions
(rainfall)
Depleting
reserve life from
continued
decline in coal
prices
2013 Theme: “Consolidation & Efficiency”
To anticipate this, Toba successfully overcame its majority obstacles
during 2013. The highlights included:
Creating new mine plan executable for the current low coal price
environment
Renegotiating with third party contractors on new rates
Building and completing hauling road in time to enable
production ramp up and cost savings
Increasing infrastructure capacity to anticipate production growth
Deploying effective marketing strategy targeting more diversified
customer base & export market coverage,
better quality
customers, while maximizing ASP
2014 Theme: “Growth & Integration”
Entering 2014, Toba has become a stronger and more resilient
company, and is poised to continue its “sustainable and profitable
production growth” strategy through:
Maintaining cost efficiency in all levels
Increasing production growth at acceptable level
Seeking increased reserves through internal exploration and
external acquisitions
Strengthening quality of human resources at every level of the
organization
Increasing marketing strength via targeting higher quality
customers, while optimizing ASP
Maximizing return to shareholders through profit growth and
dividend
9
PT Toba Bara Sejahtra Tbk
www.tobabara.com