Company Presentation 9M 2014
PT Toba Bara Sejahtra Tbk (䇾Toba䇿)
Company Presentation
Nine Months (9M2014)
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
Table of Contents
1
Corporate Events
2
Operational Highlights
3
Financial Highlights
4
Marketing Highlights
3
1
Corporate Events
4
Events in 9M 2014
McCloskey Conference
Macquarie Mining Conference
IHS Asia Coal Market
Outlook
13 August 2014
Macquarie Indonesia
Commodities Conference
23-24 September 2014
Theme: Half-day event
discussing key issues
facing Asian coal market
with focus on Indonesia
and its supply/ demand
outlook
Toba Bara Role: Pandu
Sjahrir acted as one of
panelists who spoke on
coal market situation post
Presidential Election
Theme: Mining Conference
focusing
on
trends
emerging in commodities
markets and impacts on
Indonesia.
Toba Bara Role: Pandu
Sjahrir acted as one of
speakers with topic on
“New Paradigm for Coal
Producers”
5
2
Operational Highlights
6
Prime Location Gives Significant Cost Advantage
Major
City
Samarinda
Jetty Transhipment
Point
TMU – IM
Hauling Road
Muara Berau
Major city is less
than 50 km
Furthest pit to jetty
25 km, with closest
one ~5 km
IM
ABN
TMU
Kutai Energi
~55 km
(total ~120 km)
~5 km
IM jetty
ABN jetty
Close proximity
transhipment
point & jetty
Makassar Strait
Adjacent
locations for all
3 mines
Balikpapan
~65 km
Muara Jawa
Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties), giving
significant operating leverage vs other concessions in surrounding areas
7
Infrastructure & Operational Capabilities
Short Coal Hauling
Distance < 5km
CPP Ramp Up to 6Mn
Tons/Annum (TPA)
Conveyor for TMU
& Others
ABN
INDOMINING
TMU
TMU
IM
Short Coal Hauling
Distance 4km
ABN
Hauling Road to IM
TMU
High Built CPP Cap
10 Mn TPA
Loading Speed of
1,800 TPH
Toba’s Concessions
Mine Ops Commenced
at Block 4
Integrate CPP Ops with
IM
Underpass
Infrastructure
8
Solid Operating Track Record
Yearly Coal Production
Mt : In Million Tons
TMU
IM
ABN
7.2 – 7.8
6.5
5.2
6.4
5.6
• IM and TMU both contributed to
Company’s
2013
total
production’s higher volume
growth of ~40% and ~260%
respectively
4.0
2.0
0.8
2008
2009
2010
2011
2012
Cumulative Production
achievement >10 million
tons
2008
ABN
IM
TMU
Stripping Ratio (x)
0.8
0.1
0.7
11.9
Note: 2014e: Toba’s Production target in 2014
2009
2.0
1.1
0.9
10.5
2013
2014e
9M14
Cumulative Production
Achievement >20
million tons
Operational Data
Production Volume (Mt)
• Production
volume
rose
significantly from only ~800,000
tons in 2008 to ~6.5 mn tons in
2013, booking CAGR growth of
52.2% over relatively short
period of 5 years
2010
4.0
3.1
1.0
9.9
2011
5.2
3.8
1.4
0.0
12.7
2012
5.6
4.4
1.0
0.2
14.9
2013
6.5
4.2
1.4
0.9
13.4
• Stripping Ratio (SR) decreased
from 14.9x in 2012 to 13.4x in
2013 resulting in lowered
mining costs
• TMU’s
production
solidly
increased from quarterly runrate of ~84,000 tons in 1Q13 to
high of ~420,000 tons in 4Q13
post
earlier-than-expected
completion of hauling road from
TMU-IM via ABN in 2Q13
9
Company Operational Performance in 9M14
Quarterly Production & Stripping Ratio (SR)
Production in Thousand Tons
2,000
20x
15.1x
13.6x
1,500
12.7x
13.5x
12.7x
13.8x
15x
12.5x
1,000
10x
1,298
1,501
1,802
1,950
1,911
2,160
2,328
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
500
5x
Production volume ('000)
Stripping Ratio (SR)
• Quarterly production run-rate of
minimum 1.9 Mt has been
maintained for last 4 consecutive
quarters due to more streamlined
mining operations
• 3Q14 volume reached ~2.3 Mt,
up from 1.9 Mt in 1Q14
• SR normalized to 12.5x in 3Q14,
down q-o-q from 13.8x in 2Q14,
and slightly down y-o-y from 12.7x
in 3Q13
Production Summary
MT: Million Ton
Change
9M13
9M14
Comment
Production
Volume
(Mt)
4.59
6.40
39.4%
Production volume grew y-o-y significantly
from 9M13 to 9M14 mainly driven by border mining
at IM and production ramp-up at TMU.
Sales Volume
(Mt)
4.41
6.08
37.9%
Sales volume grew significantly in line with
production volume growth
SR (x)
13.7
13.2
-3.5%
SR continued to fall resulting in lower mining cost
10
ABN Operational Performance
Quarterly Production & Stripping Ratio
Production in Thousand Tons
IM
Production volume ("000)
ABN
Stripping Ratio
1,500
20x
16.6x
TMU
12.4x
14.2x
12.7x
14.1x
14.9x
15x
13.1x
1,000
10x
PT Kutai Energi
500
Dump
Distance
(m)
925
995
1,188
1,101
1,003
1,213
1,273
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
1,719
1,864
1,843
1,779
1,894
1,842
5x
1,853
Key Highlights
Quarterly production rose from 1.0 mn Mt in 1Q14 to 1.2 mn Mt in 2Q14 and to 1.3 mn Mt in 3Q14, while
quarterly run-rate has stabilized at average of 1.0 – 1.2 mn Mt per quarter over past 4 consecutive quarters
Higher q-o-q SR from 14.1x in 1Q14 to 14.9x in 2Q14 but normalized to 12.4x in 3Q14
SR is expected to be maintained in 4Q14
11
TMU Operational Performance
Quarterly Production & Stripping Ratio
IM
ABN
Production in Thousand Tons
Production volume ('000)
450
Stripping Ratio
45x
400
350
35x
300
PT Kutai Energi
250
25x
200
150
100
50
Note:
---
Hauling road
0
11.2x
12.7x
84
1Q13
10.3x
11.1x
11.4x
11.7x
11.7x
146
275
420
362
379
402
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
15x
5x
Key Highlights
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 380K per quarter over last 3 quarters of 1Q14, 2Q14, and 3Q14
SR in 3Q14 remained same as 2Q14 SR at 11.7x
SR is expected to be maintained in 4Q14
12
IM Operational Performance
Quarterly Production & Stripping Ratio
Production in Thousand Tons
750
Production volume ('000)
ABN
TMU
14.7x
500
12.8x
12.7x
20x
Stripping Ratio
12.8x
13.7x
15x
13.3x
11.2x
10x
250
5x
PT Kutai Energi
0
Dump
Distance
(m)
278
360
339
425
547
570
652
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
1,698
1,662
1,728
1,570
1,904
1,751
0x
1,957
Key Highlights
Quarterly production run-rate stabilized at 550K level throughout 1Q14, 2Q14, and 3Q14, up from
quarterly run-rate of c.300-330K for 1Q and 2Q13
9M14 production volume rose ~80.0% y-o-y from 980K in 9M13
SR slightly rose 4.0% q-o-q to 13.3x in 3Q14 due to pre-stripping activity but it fell on y-o-y basis from
14.7x in 3Q13 to 13.3 in 3Q14 .
SR is expected to be maintained in 4Q14
13
3
Financial Highlights
14
Evolution of Quarterly FOB Cash Cost from 2012-2014
Quarterly FOB Cash Cost
In US$/ton
100
FOB Cash Cost
17.7x
16.6x
80
18x
15.1x
14.2x
77
13.6x
12.0x
73
60
12.7x
13.5x
12.7x
13.8x
12.5x
15x
12x
63
59
56
52
52
51
40
52
52
51
9x
6x
20
3x
67
69
60
57
55
55
53
49
49
52
53
0
0x
1Q12
2Q12
3Q12
4Q12
1Q13
FOB cash cost
2Q13
3Q13
Adj. FOB cash cost
4Q13
1Q14
2Q14
3Q14
SR
Constant convergence between FOB cash cost and adjusted FOB cash cost underline normalization of
SR over quarterly period resulting from more efficient mine operations
Notes:
(1) FOB Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization
(2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of exploration & development and excluding
deferred stripping cost
15
9M 2014 Highlights
Production (in Mt)
1
Production volume expanded
39.4% y-o-y from 4.59 mn tons in
9M13 to 6.40 mn tons in 9M14 on
the back of significantly higher
volume contributions from ABN,
TMU and IM
4.59
0.5
Total
6.40
39.4%
1.1
1.8
1.0
TMU
IM
3.1
3.5
9M13
9M14
ABN
Cash Cost (in US$/ton)
2
FOB cash cost was lowered by
5.4% y-o-y,
resulting from
lowered overall SR by 3.5% y-o-y
from 13.7x in 9M13 to 13.2x in
9M14
54.4
EBITDA surged by 44.0% y-o-y
from US$ 40.2 mn in 9M13 to US$
57.8 mn in 9M14
51.5
40.4
47.0
TMU
53.8
49.2
IM
56.9
55.8
9M13
3
Average
5.4%
ABN
9M14
EBITDA (US$ Mn)
40.2
2.3
7.7
32.4
9M13
Total
57.8
44.0%
4.4
12.3
TMU
IM
40.2
9M14
ABN
16
9M 2014 Financial Performance
Sales
EBITDA
Net Profit (a)
US$ million
US$ million
US$ million
389.7
283.4
30.9
57.8
297.5
40.2
19.3
15.9
22.6
9M12
9M13
9M14
9M12
9M13
9M14
9M12
9M13
9M14
Note: (a) Net Income before minority interest
(b) Figures are unaudited
Despite declining NEWC Index price trend on y-o-y basis from 9M12 to 9M13 and to 9M14, sales value
increased 5.0% from US$ 283.4 million in 9M12 to US$ 297.5 million in 9M13, and 31.0% to US$ 389.7
million in 9M14
EBITDA surged 78.1% y-o-y to US$ 40.2 million in 9M13, and 44.0% y-o-y to US$ 57.8 million in 9M14
resulting from higher sales volume and better mine plan execution, hence lowering mining costs in
process
Total profit for the period in 9M13 stood at US$ 19.3 million, up 21.7% from 9M12. Meanwhile from 9M13 to
9M14, profit increased y-o-y by 59.8% to US$ 30.9 million
17
Financial Performance
Financial and Operational Highlights
All figures are in million US$
unless otherwise stated
Operation
Sales Volume
Production Volume
Stripping Ratio (SR)
FOB Cash Cost*
NEWC Index Price
Average Selling Price (ASP)
Mn ton
Mn ton
x
US$/ton
US$/ton
US$/ton
Financial Performance
Profit (Loss)
Sales
Cost of Goods Sold
Gross Profit
Operating Profit
EBITDA**
Profit for the Period
EBITDA/ton
Capex
2Q14
US$ Mn 124.83
US$ Mn 103.77
US$ Mn 21.06
US$ Mn 14.75
US$ Mn 17.20
US$ Mn
7.92
US$/ton
8.96
US$ Mn
2.27
Financial Ratios
Gross Profit Margin
EBITDA Margin
Operating Profit Margin
%
%
%
2Q14
3Q14 Changes
1.92
2.16
13.79
52.32
73.05
64.81
2.23
2.33
12.50
52.55
68.35
64.09
16.9%
13.8%
11.8%
9M13
16.1%
7.9%
(9.4%)
0.4%
(6.4%)
(1.1%)
4.41
4.59
13.69
54.40
85.70
67.47
3Q14 Changes
142.90
14.5%
121.10
16.7%
21.81
3.6%
15.41
4.5%
19.51 13.4%
10.19 28.7%
8.75
(2.3%)
2.46
8.4%
9M13
297.50
244.70
52.80
29.28
40.15
19.34
9.11
15.39
15.3%
13.7%
10.8%
17.7%
13.5%
9.8%
Note Figures are unaudited
*FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization
**EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
9M14
6.08
6.40
13.21
51.46
73.20
64.10
Changes
37.9%
39.4%
(3.5%)
(5.4%)
(14.6%)
(5.0%)
9M14 Changes
389.73
31.0%
323.27
32.1%
66.47
25.9%
47.83
63.4%
57.80
44.0%
30.91
59.8%
9.51
4.4%
10.23 (33.5%)
Despite weaker ASP, sales rose
31.0% y-o-y to US$ 389.73 mn in
9M14 due to 37.9% sales
volume growth
EBITDA increased 44.0% y-o-y
to US$ 57.8 mn in 9M14
attributable to increased
production and lower cash cost
by 39.4% and -5.4% respectively
On q-o-q, EBITDA grew 13.4% to
US$ 19.51 mn in 3Q14 from US$
17.20 mn in 2Q14
17.1%
14.8%
12.3%
18
Balance Sheet
Consolidated Balance Sheet
Net Debt to EBITDA
In Thousand US$
In Million US$
Cash and Cash Equivalents
Fixed Assets
Others
Total Assets
Trade Payable
Interest Bearing Debt
Others
Total Liabilities
Shareholders Equity
Dec-13
63,302
49,033
199,314
311,649
69,265
55,858
56,044
181,167
130,482
Sep-14 Changes (%)
64,312
1.6
47,091
(4.0)
218,213
9.5
329,616
5.8
85,942
24.1
57,832
3.5
41,692
(25.6)
185,466
2.4
144,150
10.5
Total assets rose 5.8% to US$ 329.62 mn in 9M14
from US$ 311.65 mn as per end 2013
Over same period, total liabilities increased 2.4% to
US$ 185.47 mn due to higher operational activities
resulting in higher payables to counterparties, while
offset by lower prepayments from customers
Total equity in 9M14 increased 10.5% to US$
144.15 mn from US$ 130.48 mn, attributable to
additional income for the period
Account Payable Days
68
66
67
65
64
64
62
61
60
60
58
56
54
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
5
Marketing Highlights
20
Marketing Performance
NEWC Index & ASP (in US$/ton)
140.0
Sales Volume, Y-o-Y (in Mn Tons)
6.08
121.1
120.0
98.5
96.9
100.0
80.0
60.0
4.41
85.3
73.2
91.3
72.2
65.5
66.2
64.1
37.9%
0.4
1.2
0.6
TMU
0.7
40.0
IM
4.2
ABN
3.2
20.0
0.0
2010
2011
2012
NEWC
2013
9M14
9M13
ASP
Product Contribution (GAR)
Marketing Highlights
1%
1%
9%
9M14
4200 GAR
16%
4700 GAR
9%
5200 GAR
5600 GAR
Average NEWC Index declined by 14.6% from
US$ 85.70/ton in 9M13 to US$ 73.15/ton in 9M14
Sales volume increased by 37.9%, y-o-y from
4.41 mn tons in 9M13 to 6.08 mn tons in 9M14
~90-95% of 2014 sales volume has been secured
Total sales are mainly contributed from 4700 GAR
29%
and 5600 GAR products
5800 GAR
65%
5900 GAR
21
9M14 Marketing & Sales – Quality & Diversified Buyers
Major Customers
Export Destinations by Country
60.0%
54.0%
11.9%
50.0%
36.2%
15.1%
China
40.0%
Taiwan
Korea
India
30.0%
28.9%
21.8%
18.8%
20.0%
16.4%
Others
18.3%
10.0%
9.1%
10.0%
18.5%
0.0%
Glencore Mercuria
Note: Total Sales 9M14: 6,08 Mt
Vitol
Dragon
Energy
Trafigura
Others
End
Buyers
Major customers provide the stable
business support for Toba’s marketing…
Initiatives Undertaken:
Maintaining well-diversified customer base consisting of mainly reputable international traders, while
also growing the no of end-users
Generating good quality sales backed by quality buyers and favorable terms of payment
Achieved tighter discount rate to reference market price with ASP of US$ 65-68/ton
22
Average Selling Price Analysis
Discount to NEWC-Adjusted Selling Price
Sales Contract
US$
5 - 10%
From double digit,
discount has
narrowed to
single digit
relative to current
price level
Contracted
90 - 95%
Non Contracted
Majority of 2014 sales volume has been
contracted with buyers at fixed price
-6%
Newcastle (6,322 GAR)
Average Selling Price - FOB Vessel
(5,600 GAR)
23
THANK YOU
Company Presentation
Nine Months (9M2014)
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
Table of Contents
1
Corporate Events
2
Operational Highlights
3
Financial Highlights
4
Marketing Highlights
3
1
Corporate Events
4
Events in 9M 2014
McCloskey Conference
Macquarie Mining Conference
IHS Asia Coal Market
Outlook
13 August 2014
Macquarie Indonesia
Commodities Conference
23-24 September 2014
Theme: Half-day event
discussing key issues
facing Asian coal market
with focus on Indonesia
and its supply/ demand
outlook
Toba Bara Role: Pandu
Sjahrir acted as one of
panelists who spoke on
coal market situation post
Presidential Election
Theme: Mining Conference
focusing
on
trends
emerging in commodities
markets and impacts on
Indonesia.
Toba Bara Role: Pandu
Sjahrir acted as one of
speakers with topic on
“New Paradigm for Coal
Producers”
5
2
Operational Highlights
6
Prime Location Gives Significant Cost Advantage
Major
City
Samarinda
Jetty Transhipment
Point
TMU – IM
Hauling Road
Muara Berau
Major city is less
than 50 km
Furthest pit to jetty
25 km, with closest
one ~5 km
IM
ABN
TMU
Kutai Energi
~55 km
(total ~120 km)
~5 km
IM jetty
ABN jetty
Close proximity
transhipment
point & jetty
Makassar Strait
Adjacent
locations for all
3 mines
Balikpapan
~65 km
Muara Jawa
Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties), giving
significant operating leverage vs other concessions in surrounding areas
7
Infrastructure & Operational Capabilities
Short Coal Hauling
Distance < 5km
CPP Ramp Up to 6Mn
Tons/Annum (TPA)
Conveyor for TMU
& Others
ABN
INDOMINING
TMU
TMU
IM
Short Coal Hauling
Distance 4km
ABN
Hauling Road to IM
TMU
High Built CPP Cap
10 Mn TPA
Loading Speed of
1,800 TPH
Toba’s Concessions
Mine Ops Commenced
at Block 4
Integrate CPP Ops with
IM
Underpass
Infrastructure
8
Solid Operating Track Record
Yearly Coal Production
Mt : In Million Tons
TMU
IM
ABN
7.2 – 7.8
6.5
5.2
6.4
5.6
• IM and TMU both contributed to
Company’s
2013
total
production’s higher volume
growth of ~40% and ~260%
respectively
4.0
2.0
0.8
2008
2009
2010
2011
2012
Cumulative Production
achievement >10 million
tons
2008
ABN
IM
TMU
Stripping Ratio (x)
0.8
0.1
0.7
11.9
Note: 2014e: Toba’s Production target in 2014
2009
2.0
1.1
0.9
10.5
2013
2014e
9M14
Cumulative Production
Achievement >20
million tons
Operational Data
Production Volume (Mt)
• Production
volume
rose
significantly from only ~800,000
tons in 2008 to ~6.5 mn tons in
2013, booking CAGR growth of
52.2% over relatively short
period of 5 years
2010
4.0
3.1
1.0
9.9
2011
5.2
3.8
1.4
0.0
12.7
2012
5.6
4.4
1.0
0.2
14.9
2013
6.5
4.2
1.4
0.9
13.4
• Stripping Ratio (SR) decreased
from 14.9x in 2012 to 13.4x in
2013 resulting in lowered
mining costs
• TMU’s
production
solidly
increased from quarterly runrate of ~84,000 tons in 1Q13 to
high of ~420,000 tons in 4Q13
post
earlier-than-expected
completion of hauling road from
TMU-IM via ABN in 2Q13
9
Company Operational Performance in 9M14
Quarterly Production & Stripping Ratio (SR)
Production in Thousand Tons
2,000
20x
15.1x
13.6x
1,500
12.7x
13.5x
12.7x
13.8x
15x
12.5x
1,000
10x
1,298
1,501
1,802
1,950
1,911
2,160
2,328
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
500
5x
Production volume ('000)
Stripping Ratio (SR)
• Quarterly production run-rate of
minimum 1.9 Mt has been
maintained for last 4 consecutive
quarters due to more streamlined
mining operations
• 3Q14 volume reached ~2.3 Mt,
up from 1.9 Mt in 1Q14
• SR normalized to 12.5x in 3Q14,
down q-o-q from 13.8x in 2Q14,
and slightly down y-o-y from 12.7x
in 3Q13
Production Summary
MT: Million Ton
Change
9M13
9M14
Comment
Production
Volume
(Mt)
4.59
6.40
39.4%
Production volume grew y-o-y significantly
from 9M13 to 9M14 mainly driven by border mining
at IM and production ramp-up at TMU.
Sales Volume
(Mt)
4.41
6.08
37.9%
Sales volume grew significantly in line with
production volume growth
SR (x)
13.7
13.2
-3.5%
SR continued to fall resulting in lower mining cost
10
ABN Operational Performance
Quarterly Production & Stripping Ratio
Production in Thousand Tons
IM
Production volume ("000)
ABN
Stripping Ratio
1,500
20x
16.6x
TMU
12.4x
14.2x
12.7x
14.1x
14.9x
15x
13.1x
1,000
10x
PT Kutai Energi
500
Dump
Distance
(m)
925
995
1,188
1,101
1,003
1,213
1,273
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
1,719
1,864
1,843
1,779
1,894
1,842
5x
1,853
Key Highlights
Quarterly production rose from 1.0 mn Mt in 1Q14 to 1.2 mn Mt in 2Q14 and to 1.3 mn Mt in 3Q14, while
quarterly run-rate has stabilized at average of 1.0 – 1.2 mn Mt per quarter over past 4 consecutive quarters
Higher q-o-q SR from 14.1x in 1Q14 to 14.9x in 2Q14 but normalized to 12.4x in 3Q14
SR is expected to be maintained in 4Q14
11
TMU Operational Performance
Quarterly Production & Stripping Ratio
IM
ABN
Production in Thousand Tons
Production volume ('000)
450
Stripping Ratio
45x
400
350
35x
300
PT Kutai Energi
250
25x
200
150
100
50
Note:
---
Hauling road
0
11.2x
12.7x
84
1Q13
10.3x
11.1x
11.4x
11.7x
11.7x
146
275
420
362
379
402
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
15x
5x
Key Highlights
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 380K per quarter over last 3 quarters of 1Q14, 2Q14, and 3Q14
SR in 3Q14 remained same as 2Q14 SR at 11.7x
SR is expected to be maintained in 4Q14
12
IM Operational Performance
Quarterly Production & Stripping Ratio
Production in Thousand Tons
750
Production volume ('000)
ABN
TMU
14.7x
500
12.8x
12.7x
20x
Stripping Ratio
12.8x
13.7x
15x
13.3x
11.2x
10x
250
5x
PT Kutai Energi
0
Dump
Distance
(m)
278
360
339
425
547
570
652
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
1,698
1,662
1,728
1,570
1,904
1,751
0x
1,957
Key Highlights
Quarterly production run-rate stabilized at 550K level throughout 1Q14, 2Q14, and 3Q14, up from
quarterly run-rate of c.300-330K for 1Q and 2Q13
9M14 production volume rose ~80.0% y-o-y from 980K in 9M13
SR slightly rose 4.0% q-o-q to 13.3x in 3Q14 due to pre-stripping activity but it fell on y-o-y basis from
14.7x in 3Q13 to 13.3 in 3Q14 .
SR is expected to be maintained in 4Q14
13
3
Financial Highlights
14
Evolution of Quarterly FOB Cash Cost from 2012-2014
Quarterly FOB Cash Cost
In US$/ton
100
FOB Cash Cost
17.7x
16.6x
80
18x
15.1x
14.2x
77
13.6x
12.0x
73
60
12.7x
13.5x
12.7x
13.8x
12.5x
15x
12x
63
59
56
52
52
51
40
52
52
51
9x
6x
20
3x
67
69
60
57
55
55
53
49
49
52
53
0
0x
1Q12
2Q12
3Q12
4Q12
1Q13
FOB cash cost
2Q13
3Q13
Adj. FOB cash cost
4Q13
1Q14
2Q14
3Q14
SR
Constant convergence between FOB cash cost and adjusted FOB cash cost underline normalization of
SR over quarterly period resulting from more efficient mine operations
Notes:
(1) FOB Cash Cost = COGS including royalty and selling &marketing expense – depreciation and amortization
(2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of exploration & development and excluding
deferred stripping cost
15
9M 2014 Highlights
Production (in Mt)
1
Production volume expanded
39.4% y-o-y from 4.59 mn tons in
9M13 to 6.40 mn tons in 9M14 on
the back of significantly higher
volume contributions from ABN,
TMU and IM
4.59
0.5
Total
6.40
39.4%
1.1
1.8
1.0
TMU
IM
3.1
3.5
9M13
9M14
ABN
Cash Cost (in US$/ton)
2
FOB cash cost was lowered by
5.4% y-o-y,
resulting from
lowered overall SR by 3.5% y-o-y
from 13.7x in 9M13 to 13.2x in
9M14
54.4
EBITDA surged by 44.0% y-o-y
from US$ 40.2 mn in 9M13 to US$
57.8 mn in 9M14
51.5
40.4
47.0
TMU
53.8
49.2
IM
56.9
55.8
9M13
3
Average
5.4%
ABN
9M14
EBITDA (US$ Mn)
40.2
2.3
7.7
32.4
9M13
Total
57.8
44.0%
4.4
12.3
TMU
IM
40.2
9M14
ABN
16
9M 2014 Financial Performance
Sales
EBITDA
Net Profit (a)
US$ million
US$ million
US$ million
389.7
283.4
30.9
57.8
297.5
40.2
19.3
15.9
22.6
9M12
9M13
9M14
9M12
9M13
9M14
9M12
9M13
9M14
Note: (a) Net Income before minority interest
(b) Figures are unaudited
Despite declining NEWC Index price trend on y-o-y basis from 9M12 to 9M13 and to 9M14, sales value
increased 5.0% from US$ 283.4 million in 9M12 to US$ 297.5 million in 9M13, and 31.0% to US$ 389.7
million in 9M14
EBITDA surged 78.1% y-o-y to US$ 40.2 million in 9M13, and 44.0% y-o-y to US$ 57.8 million in 9M14
resulting from higher sales volume and better mine plan execution, hence lowering mining costs in
process
Total profit for the period in 9M13 stood at US$ 19.3 million, up 21.7% from 9M12. Meanwhile from 9M13 to
9M14, profit increased y-o-y by 59.8% to US$ 30.9 million
17
Financial Performance
Financial and Operational Highlights
All figures are in million US$
unless otherwise stated
Operation
Sales Volume
Production Volume
Stripping Ratio (SR)
FOB Cash Cost*
NEWC Index Price
Average Selling Price (ASP)
Mn ton
Mn ton
x
US$/ton
US$/ton
US$/ton
Financial Performance
Profit (Loss)
Sales
Cost of Goods Sold
Gross Profit
Operating Profit
EBITDA**
Profit for the Period
EBITDA/ton
Capex
2Q14
US$ Mn 124.83
US$ Mn 103.77
US$ Mn 21.06
US$ Mn 14.75
US$ Mn 17.20
US$ Mn
7.92
US$/ton
8.96
US$ Mn
2.27
Financial Ratios
Gross Profit Margin
EBITDA Margin
Operating Profit Margin
%
%
%
2Q14
3Q14 Changes
1.92
2.16
13.79
52.32
73.05
64.81
2.23
2.33
12.50
52.55
68.35
64.09
16.9%
13.8%
11.8%
9M13
16.1%
7.9%
(9.4%)
0.4%
(6.4%)
(1.1%)
4.41
4.59
13.69
54.40
85.70
67.47
3Q14 Changes
142.90
14.5%
121.10
16.7%
21.81
3.6%
15.41
4.5%
19.51 13.4%
10.19 28.7%
8.75
(2.3%)
2.46
8.4%
9M13
297.50
244.70
52.80
29.28
40.15
19.34
9.11
15.39
15.3%
13.7%
10.8%
17.7%
13.5%
9.8%
Note Figures are unaudited
*FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization
**EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
9M14
6.08
6.40
13.21
51.46
73.20
64.10
Changes
37.9%
39.4%
(3.5%)
(5.4%)
(14.6%)
(5.0%)
9M14 Changes
389.73
31.0%
323.27
32.1%
66.47
25.9%
47.83
63.4%
57.80
44.0%
30.91
59.8%
9.51
4.4%
10.23 (33.5%)
Despite weaker ASP, sales rose
31.0% y-o-y to US$ 389.73 mn in
9M14 due to 37.9% sales
volume growth
EBITDA increased 44.0% y-o-y
to US$ 57.8 mn in 9M14
attributable to increased
production and lower cash cost
by 39.4% and -5.4% respectively
On q-o-q, EBITDA grew 13.4% to
US$ 19.51 mn in 3Q14 from US$
17.20 mn in 2Q14
17.1%
14.8%
12.3%
18
Balance Sheet
Consolidated Balance Sheet
Net Debt to EBITDA
In Thousand US$
In Million US$
Cash and Cash Equivalents
Fixed Assets
Others
Total Assets
Trade Payable
Interest Bearing Debt
Others
Total Liabilities
Shareholders Equity
Dec-13
63,302
49,033
199,314
311,649
69,265
55,858
56,044
181,167
130,482
Sep-14 Changes (%)
64,312
1.6
47,091
(4.0)
218,213
9.5
329,616
5.8
85,942
24.1
57,832
3.5
41,692
(25.6)
185,466
2.4
144,150
10.5
Total assets rose 5.8% to US$ 329.62 mn in 9M14
from US$ 311.65 mn as per end 2013
Over same period, total liabilities increased 2.4% to
US$ 185.47 mn due to higher operational activities
resulting in higher payables to counterparties, while
offset by lower prepayments from customers
Total equity in 9M14 increased 10.5% to US$
144.15 mn from US$ 130.48 mn, attributable to
additional income for the period
Account Payable Days
68
66
67
65
64
64
62
61
60
60
58
56
54
3Q 2013
4Q 2013
1Q 2014
2Q 2014
3Q 2014
5
Marketing Highlights
20
Marketing Performance
NEWC Index & ASP (in US$/ton)
140.0
Sales Volume, Y-o-Y (in Mn Tons)
6.08
121.1
120.0
98.5
96.9
100.0
80.0
60.0
4.41
85.3
73.2
91.3
72.2
65.5
66.2
64.1
37.9%
0.4
1.2
0.6
TMU
0.7
40.0
IM
4.2
ABN
3.2
20.0
0.0
2010
2011
2012
NEWC
2013
9M14
9M13
ASP
Product Contribution (GAR)
Marketing Highlights
1%
1%
9%
9M14
4200 GAR
16%
4700 GAR
9%
5200 GAR
5600 GAR
Average NEWC Index declined by 14.6% from
US$ 85.70/ton in 9M13 to US$ 73.15/ton in 9M14
Sales volume increased by 37.9%, y-o-y from
4.41 mn tons in 9M13 to 6.08 mn tons in 9M14
~90-95% of 2014 sales volume has been secured
Total sales are mainly contributed from 4700 GAR
29%
and 5600 GAR products
5800 GAR
65%
5900 GAR
21
9M14 Marketing & Sales – Quality & Diversified Buyers
Major Customers
Export Destinations by Country
60.0%
54.0%
11.9%
50.0%
36.2%
15.1%
China
40.0%
Taiwan
Korea
India
30.0%
28.9%
21.8%
18.8%
20.0%
16.4%
Others
18.3%
10.0%
9.1%
10.0%
18.5%
0.0%
Glencore Mercuria
Note: Total Sales 9M14: 6,08 Mt
Vitol
Dragon
Energy
Trafigura
Others
End
Buyers
Major customers provide the stable
business support for Toba’s marketing…
Initiatives Undertaken:
Maintaining well-diversified customer base consisting of mainly reputable international traders, while
also growing the no of end-users
Generating good quality sales backed by quality buyers and favorable terms of payment
Achieved tighter discount rate to reference market price with ASP of US$ 65-68/ton
22
Average Selling Price Analysis
Discount to NEWC-Adjusted Selling Price
Sales Contract
US$
5 - 10%
From double digit,
discount has
narrowed to
single digit
relative to current
price level
Contracted
90 - 95%
Non Contracted
Majority of 2014 sales volume has been
contracted with buyers at fixed price
-6%
Newcastle (6,322 GAR)
Average Selling Price - FOB Vessel
(5,600 GAR)
23
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