20131031 toba mdna 3q 2013 english version latest
Management Discussion & Analysis 3Q 2013
PT Toba Bara Sejahtra Tbk and Subsidiaries
September 2013
1
SUMMARY
The global coal industry for the period up to the third quarter 2013 (3Q13) remained lackluster, not yet
showing any signs of recovery. This was, among others, reflected by the Newcastle Index Price, which
decreased from US$ 100/ton in 9M12 to US$ 86/ton in 9M13. Amidst the continued weakness surrounding
the coal market, PT Toba Bara Sejahtra Tbk (“The Company”) successfully embarked on initiatives that
enabled it to boost production volume and sales volume by 13.3% to 4.6 million tons and 20.2% to 4.4 million
tons year-on-year (y-o-y) respectively. In this 3Q13 alone, the Company booked the highest production
volume throughout its corporate history at 1.8 million tons. Given this production milestone, the Company
believes its production target of 5.8-6.4 million tons for 2013 remains achievable.
Financially, the Company also successfully increased its sales by 5.0% y-o-y to 9M13 from 9M12. In its
efforts to run its operations more efficiently, the Company lowered its FOB vessel cash cost by 16.4% over
the same period. Hence, this resulted in a 77.8% y-o-y higher EBITDA and a more favorable comprehensive
income of US$19.3 million for the period of January to September 2013, or an increase of 23.3% from the
same period last year. Expansion in sales demonstrated another Company’s achievement bearing in mind
the Newcastle Index price took a 14% tumble throughout the same period.
Special Note: The following discussion on the Company’s performance is based on the Consolidated Financial
th
Statements as per 30 September 2013 (unaudited), which mainly focuses on the operational and financial performances
of all three of its operating subsidiaries: PT Adimitra Baratama Nusantara (ABN), PT Indomining (IM), dan PT Trisensa
Mineral Utama (TMU).
PRODUCTION & OPERATION
The Company’s coal production volume grew 13.3% y-o-y from 4.1 million tons in 9M12 to 4.6 million tons in
9M13, while on quarterly basis, it expanded 19.9% (quarter-on-quarter {q-o-q}) from 1.5 million tons in 2Q13
to 1.8 million tons in 3Q13.
The production volume of 4.6 million tons in 9M13 derived from all three operating subsidiaries with the
following respective contributions: 3.1 million tons from ABN, 1.0 million tons from IM, and 0.5 million tons
from TMU. The Company’s y-o-y production growth of 13.3% was predominantly attributable to TMU’s
significant production ramp-up post the earlier than expected completion of its hauling road connecting TMU
and IM via ABN. The Company is expected to achieve this year’s targeted production of 5.8 – 6.4 million
tons. Total production as at 9M13 reached around 75.4% of this year’s average production target of 6.1
million tons.
Changes in Production and Stripping Ratio (SR) at ABN, IM and TMU
ABN
3.200
IM
20
16,3x
1.200
14,0x
TMU
16
12,8x
17,0x
16
16
14,4x
600
12
800
11,2x
400
12
12
3.100
8
3.188
400
8
506
976
8
3.108
200
691
4
4
4
167
3.000
0
9M12
Production Volume ( 000 tons)
9M13
0
0
9M12
SR (x)
Production Volume (000 tons)
9M13
0
0
9M12
SR (x)
Production Volume (000 tons)
9M13
SR (x)
In line with the strategy to lower overall costs towards preserving and maintaining better profitability margin, in
3Q12 the Company embarked on a series of controllable cost reduction initiatives, which included lowering
SR and overburden dump distance (dump distance). These two cost components account for ~65%-70% of
FOB vessel cash cost.
The Company successfully reduced SR by 14.1% y-o-y from 16.0x in 9M12 to 13.7x in 9M13, while on q-o-q
it lowered it by 6.6% from 13.6x in 2Q13 to 12.7x in 3Q13. On the other hand, it slashed dump distance by
25.0% y-o-y from 2.2 km in 9M12 to 1.7 km in 9M13.
2
Average Production, SR, and Dump Distance
OB Dump Distance (km)
Production Volume & SR
2000
17,7x
16,6x
1500
15,0x
14,2x
13,8x
1000
1373
500
12,7x
1.802
1576
1.286
1097
1.501
0
1Q12
2Q12
3Q12
1Q 2013
2Q 2013
18
16
14
12
10
08
06
04
02
00
3.000
2.500
2.000
2.372
2.506
2.002
1.500
1.682
1.742
1.715
1Q 2013
2Q 2013
3Q 2013
1.000
500
3Q 2013
0
Production Volume (000 tons)
Stripping Ratio (x)
1Q12
2Q12
3Q12
Along with the rise in production, secured coal sales volume also increased by 20.2% to 4.4 million tons in
9M13 from 3.7 million tons in 9M12, and grew 17.8% q-o-q to 1.6 million tons in 3Q13 from 1.4 million tons in
2Q13.
Meanwhile, the Company’s average selling price (ASP) during 2012 moved relatively in tandem with its
benchmark Newcastle Index. However, this year’s situation was different compared to that of last year. When
the Newcastle Index fell 16.0% from US$ 93.2/ton in 1Q13 to US$ 78.0/ton in 3Q13, the Company managed
to improve its ASP from US$ 66.4/ton to US$ 67.9/ton over the same period. Such an improvement in ASP
was the result of the Company’s ability to capitalize on securing its coal sales based more on fixed pricing
rather than index-linked.
3
FINANCIALS
Financial and Operational Highlights
% Change
9 Months
9M13
9M12
2012-2013 Quarter III
2013
Figures are in million US$ unless
otherwise stated
Quarter II
2013
% Change
Semester
1 20122013
Operation Performance
Production Volume
Mn ton
4,6
4,1
13,3%
1,8
1,5
20,0%
Sales Volume
Mn ton
4,4
3,7
20,2%
1,6
1,4
17,8%
Overburden Removal
Mbcm
62,9
64,6
(2,6%)
22,9
20,4
11,9%
Stripping Ratio (SR)
x
13,7
16,0
(14,1%)
12,7
13,6
(6,6%)
FOB Vessel Cash Cost**
US$/ton
54,4
65,1
(16,4%)
53,4
54,6
(2,2%)
Average Selling Price
(ASP)
US$/ton
67,4
77,2
(12,7%)
67,9
68,2
(0,4%)
9M13
9M12
% Change
9 Months
2012-2013
Quarter III
2013
Quarter II
2013
% Change
Semester
1 20122013
Financial Performance
Profit (Loss)
Revenue
US$ Mn
297,5
283,4
5,0%
109,4
93,1
17,5%
Cost of Goods Sold
US$ Mn
244,7
242,6
0,9%
87,7
76,4
14,7%
Gross Profit
US$ Mn
52,8
40,8
29,4%
21,7
16,7
30,1%
Operational Profit
US$ Mn
29,3
23,6
23,9%
11,5
10,1
13,8%
EBITDA***
US$ Mn
40,1
22,6
77,8%
18,2
12,5
45,6%
Total Comprehensive
Income For The Periods
US$ Mn
19,7
16,0
23,3%
7,0
6,7
4,8%
30 Sept
2013
31 Dec
2012
% Change
2012-2013
Quarter III
2013
Quarter II
2013
% Change
Semester
1 20122013
Balance Sheet
Interest Bearing Debt
US$ Mn
58,9
49,0
20,2%
Cash and Cash Equivalents
US$ Mn
45,5
36,3
25,2%
Net Debt*
US$ Mn
13,4
12,7
5,6%
Total Assets
US$ Mn
289,8
261,5
10,8%
Total Liabilities
US$ Mn
167,7
150,6
11,4%
Total Equity
US$ Mn
122,1
110,9
10,1%
CAPEX
US$ Mn
15,4
13,8
11,1%
9M13
9M12
% Change
9 Months
2012-2013
Financial Ratios
Gross Profit Margin
%
17,7
14,4
23,3%
19,8
17,9
10,6%
EBITDA Margin
%
13,5
8,0
69,4%
16,6
13,4
23,9%
Operational Margin
%
9,8
8,3
18,0%
10,5
10,8
(2,7%)
Note:
* Net Debt = interest bearing debt – cash and cash equivalents
** FOB Vessel Cash Cost = COGS including royalty and selling expense – depreciation and amortization
*** EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
4
PROFIT (LOSS)
SALES
The weakness in the global coal price of 2012 and 2013 resulted in the Company’s ASP to decline 12.7%
from US$ 77.2/ton in 9M12 to US$ 67.4/ton in 9M13. Nevertheless, the Company managed to expand its
sales by 5.0% y-o-y from US$ 283.4 million in 9M12 to US$ 297.5 in 9M13, and by 17.4% q-o-q to US$ 109.4
million as compared to 2Q13.
COST OF GOODS SOLD
Although sales volume climbed by 20.2% y-o-y, the Company managed its cost of goods sold efficiently such
that the rise was at a meagre 0.9% from US$ 242.6 million in 9M12 to US$ 244.7 million in 9M13. This
stemmed from a significant decrease in FOB vessel cash cost from US$ 65.1/ton in 9M12 to US$ 54.4/ton in
9M13, whereby mining cost (overburden removal and dump distance) makes up its two major cost
components. Such drastic reduction in FOB vessel cash cost was, in turn, the result of the Company’s
revision of its mine plan in 3Q12 as a response to the continued weakness in the global coal market condition
during 1H12, hence enabling it to generate positive cash margins thereafter.
Change in Cash Margin by Quarter (in US$/ton)
FOB Vessel Cash cost
68.1
66.4
66.0
ASP
67.8
60.6
55.3
3Q12
Cash Margin
US$ 5,4
54.6
1Q13
2Q13
US$ 11,1
US$ 13,6
53.4
3Q13
US$ 14,5
EBITDA
EBITDA rose considerably by 77.8% y-o-y from US$ 22.6 million in 9M12 to US$ 40.1 million in 9M13,
stemming mainly from the Company’s successful strategy in lowering mining costs as well as improving sales
volume amidst the weaker ASP. As a result, this positively boosted EBITDA margin from 8.0% in 9M12 to
13.5% in 9M13.
On quarterly basis, EBITDA in 3Q13 increased 45.6% from US$ 12.5 in 2Q13 to US$ 18.2 million, which
predominantly came from a combination of expansion in sales volume and the Company’s on-going cost
efficiency initiatives. This resulted in higher EBITDA margin from 13.4% in 2Q13 to 16.6% in 3Q13.
COMPREHENSIVE INCOME
After subtracting tax expense of US$ 10.3 million from profit before tax for the period 9M13, the Company
booked total comprehensive income (before minority interest) of US$ 19.7 million, up 23.3% from US$ 16.0
million in 9M12. Meanwhile on q-o-q, comprehensive income rose 4.8% from US$ 6.7 million in 2Q13 to US$
7.0 million in 3Q13.
This income achievement of US$ 19.7 million incorporated the impact of forex loss worth US$ 4.6 million,
attributable to the weakening of the IDR against the US$ during 2013. This forex loss mainly was the result of
unrealized forex loss from cash and cash equivalents of unutilized IPO proceeds denominated in IDR and to
a lesser extent other IDR receivables. Throughout 9M13, the IDR weakened by as much as 20% against the
th
US$, from IDR 9,698 in early January 2013 to IDR 11,613 as per 30 September 2013.
5
OPERATING CASH FLOW
The Company’s operating cash flow experienced a y-o-y improvement from 9M12 to 9M13. In 9M13, it
generated operating cash flow of US$ 25.6 million, a stark contrast as compared to minus US$ 29.4 in 9M12.
Such an increase was in line with the Company’s continued improvement in performance.
BALANCE SHEET
ASSETS
The Company’s asset stood at US$ 289.8 million in 9M13 or up 10.8% from US$ 261.5 as per endDecember 2012. Such growth predominantly resulted from a build-up in cash and equivalents of US$ 9.2
million, inventories of US$ 7.9 million, and fixed assets of US$ 8.3 million.
LIABILITIES
Meanwhile, total liabilities rose by 11.4% y-o-y to US$ 167.7 million in 9M13 from US$ 150.6 million as per
st
31 December 2012 and interest bearing debt (loans) expanded by 20.2% to US$ 58.9 million in 9M13 from
US$ 49.0 million as per end of 2012.
In 2013, the Company successfully secured a term loan from a major reputable Bank whose terms and
conditions as well as lending rate were similar to those when the former secured previous loans back in 2011
during a much more favorable coal market condition than today. To date, the loans secured from banks are
allocated among others for infrastructure expansion.
EQUITY
Total equity in 9M13 increased 10.1% to US$ 122.1 million from US$ 110.94 million as per end-2012, and
this was attributable to additional income for the period.
CAPITAL EXPENDITURE (CAPEX)
Until end of September 2013, the Company has earmarked and spent CAPEX of US$ 15.4 million, some of
which have been used for the construction of a new coal processing plant (CPP) at IM, a hauling road
between TMU and IM (via ABN), a second underpass at ABN, and land compensation. For the full year of
2013, the Company is targeting to earmark US$ 27.1 million of CAPEX.
MARKETING
During 9M13, the Company sold its coal to several notable Asian countries, which included China, Taiwan,
India, and Vietnam. Some of the large reputable international traders and, to a lesser extent, end-users such
as power generation companies make up the Company’s main customers. As per 9M13, the Company has
secured and achieved 72.1% of total sales volume in 2013, predominantly based on fixed price.
6
Sales Destination by Country
South Korea
9.9%
China
31.7%
Taiwan
22.7%
India
9.2%
OPERATIONAL UPDATE
Initiative
Achievement
ABN
Construction of second underpass at ABN, which is expected
to reduce OB dump distance
Construction
is
currently
underway
and
is
due
for
completion in 4Q13
IM
Construction of Coal Processing Plant (CPP) is expected to
boost coal production capacity at IM from 3 million tons per
annum (tpa) to 6 million tpa. This new CPP not only will
process TMU’s coal, but also will create more cost efficiency
and increase coal stockpile capacity. Overall, the Company’s
total production/infrastructure capacity is expected to expand
significantly from currently 13 million tpa to 16 million tpa by
end 2013
Construction of CPP is
nearing completion
7
TMU
Construction of hauling road is expected to connect TMU and
IM via ABN. Cost saving in the form of lower logistics costs is
expected at US$ 5-6/ton
TMU successfully achieved total production of 275,000 tons in
3Q13, up by 88.4% from 146,000 tons in 2Q13
Construction of hauling
road from TMU to IM,
via
ABN
was
completed in 2Q13
ahead of schedule
TMU’s Production Achievement (in 000 tons)
300
275
250
200
146
150
100
85
84
3Q 2012
1Q 2013
59
50
23
1Q 2012
2Q 2012
2Q 2013
3Q 2013
PT TOBA BARA SEJAHTRA TBK at a Glance
PT Toba Bara Sejahtra Tbk (“The Company”) is one of the major competitive producers of thermal coal in
Indonesia. The Company has grown into a major coal producer operating 3 (three) coal mine concessions in
East Kalimantan. These adjacent coal mining concessions, which are held through various operating
companies, all enjoy highly favorable mine locations, with close proximity to local river ports. The Company’s
concession areas total approximately 7,087 hectares.
The Company currently has three operating subsidiaries, namely PT Adimitra Baratama Nusantara (ABN),
PT Indomining (IM) and PT Trisensa Mineral Utama (TMU). The Company’s ownerships in ABN, IM, and
TMU are 51.00%, 99.99%, and 99.99% respectively.
th
On 6 July, 2012, the Company listed its shares at the Indonesia Stock Exchange (IDX) under the ticker
‘TOBA’ and released as many as 210,681,000 shares or 10.5% of its paid up capital with an IPO proceed of
IDR 400.3 billion.
8
Locations of Toba Bara’s Concessions
ABN is located in Sanga-Sanga, Kutai Kartanegara, East Kalimantan and is operated under the IUPOP
permit. It started operations in September 2008. ABN covers an area reaching 2,990 hectares, and has
estimated coal resources of around 156 million tons.
IM is located in Sanga-Sanga, Kutai Kartanegara, East Kalimantan and is operated under the IUPOP permit.
It started operations in August 2007. IM covers 683 hectares of land, and has estimated coal resources of 37
million tons.
Meanwhile, TMU is located in Loa Janan, Muara Jawa and Sanga-Sanga, Kutai Kartanegara, East
Kalimantan. With IUPOP permit, TMU started operations in October 2011. TMU covers 3,414 hectares of
land, and has estimated coal resources of 43 million tons.
Altogether, the total coal resources of the Company are currently estimated at 236 million tons.
For further information, please contact:
PT Toba Bara Sejahtra Tbk
Pandu P. Syahrir
Iwan Sanyoto
Corporate Secretary
Head of Investor Relations
(Sekretaris Perusahaan)
(Kepala Hubungan Investor)
Email: corsec@tobabara.com
Email: iwan.sanyoto@tobabara.com
Priambodo
Corporate Communication
(Komunikasi Perusahaan)
Email: priambodo@tobabara.com
PT Toba Bara Sejahtra Tbk and Subsidiaries
September 2013
1
SUMMARY
The global coal industry for the period up to the third quarter 2013 (3Q13) remained lackluster, not yet
showing any signs of recovery. This was, among others, reflected by the Newcastle Index Price, which
decreased from US$ 100/ton in 9M12 to US$ 86/ton in 9M13. Amidst the continued weakness surrounding
the coal market, PT Toba Bara Sejahtra Tbk (“The Company”) successfully embarked on initiatives that
enabled it to boost production volume and sales volume by 13.3% to 4.6 million tons and 20.2% to 4.4 million
tons year-on-year (y-o-y) respectively. In this 3Q13 alone, the Company booked the highest production
volume throughout its corporate history at 1.8 million tons. Given this production milestone, the Company
believes its production target of 5.8-6.4 million tons for 2013 remains achievable.
Financially, the Company also successfully increased its sales by 5.0% y-o-y to 9M13 from 9M12. In its
efforts to run its operations more efficiently, the Company lowered its FOB vessel cash cost by 16.4% over
the same period. Hence, this resulted in a 77.8% y-o-y higher EBITDA and a more favorable comprehensive
income of US$19.3 million for the period of January to September 2013, or an increase of 23.3% from the
same period last year. Expansion in sales demonstrated another Company’s achievement bearing in mind
the Newcastle Index price took a 14% tumble throughout the same period.
Special Note: The following discussion on the Company’s performance is based on the Consolidated Financial
th
Statements as per 30 September 2013 (unaudited), which mainly focuses on the operational and financial performances
of all three of its operating subsidiaries: PT Adimitra Baratama Nusantara (ABN), PT Indomining (IM), dan PT Trisensa
Mineral Utama (TMU).
PRODUCTION & OPERATION
The Company’s coal production volume grew 13.3% y-o-y from 4.1 million tons in 9M12 to 4.6 million tons in
9M13, while on quarterly basis, it expanded 19.9% (quarter-on-quarter {q-o-q}) from 1.5 million tons in 2Q13
to 1.8 million tons in 3Q13.
The production volume of 4.6 million tons in 9M13 derived from all three operating subsidiaries with the
following respective contributions: 3.1 million tons from ABN, 1.0 million tons from IM, and 0.5 million tons
from TMU. The Company’s y-o-y production growth of 13.3% was predominantly attributable to TMU’s
significant production ramp-up post the earlier than expected completion of its hauling road connecting TMU
and IM via ABN. The Company is expected to achieve this year’s targeted production of 5.8 – 6.4 million
tons. Total production as at 9M13 reached around 75.4% of this year’s average production target of 6.1
million tons.
Changes in Production and Stripping Ratio (SR) at ABN, IM and TMU
ABN
3.200
IM
20
16,3x
1.200
14,0x
TMU
16
12,8x
17,0x
16
16
14,4x
600
12
800
11,2x
400
12
12
3.100
8
3.188
400
8
506
976
8
3.108
200
691
4
4
4
167
3.000
0
9M12
Production Volume ( 000 tons)
9M13
0
0
9M12
SR (x)
Production Volume (000 tons)
9M13
0
0
9M12
SR (x)
Production Volume (000 tons)
9M13
SR (x)
In line with the strategy to lower overall costs towards preserving and maintaining better profitability margin, in
3Q12 the Company embarked on a series of controllable cost reduction initiatives, which included lowering
SR and overburden dump distance (dump distance). These two cost components account for ~65%-70% of
FOB vessel cash cost.
The Company successfully reduced SR by 14.1% y-o-y from 16.0x in 9M12 to 13.7x in 9M13, while on q-o-q
it lowered it by 6.6% from 13.6x in 2Q13 to 12.7x in 3Q13. On the other hand, it slashed dump distance by
25.0% y-o-y from 2.2 km in 9M12 to 1.7 km in 9M13.
2
Average Production, SR, and Dump Distance
OB Dump Distance (km)
Production Volume & SR
2000
17,7x
16,6x
1500
15,0x
14,2x
13,8x
1000
1373
500
12,7x
1.802
1576
1.286
1097
1.501
0
1Q12
2Q12
3Q12
1Q 2013
2Q 2013
18
16
14
12
10
08
06
04
02
00
3.000
2.500
2.000
2.372
2.506
2.002
1.500
1.682
1.742
1.715
1Q 2013
2Q 2013
3Q 2013
1.000
500
3Q 2013
0
Production Volume (000 tons)
Stripping Ratio (x)
1Q12
2Q12
3Q12
Along with the rise in production, secured coal sales volume also increased by 20.2% to 4.4 million tons in
9M13 from 3.7 million tons in 9M12, and grew 17.8% q-o-q to 1.6 million tons in 3Q13 from 1.4 million tons in
2Q13.
Meanwhile, the Company’s average selling price (ASP) during 2012 moved relatively in tandem with its
benchmark Newcastle Index. However, this year’s situation was different compared to that of last year. When
the Newcastle Index fell 16.0% from US$ 93.2/ton in 1Q13 to US$ 78.0/ton in 3Q13, the Company managed
to improve its ASP from US$ 66.4/ton to US$ 67.9/ton over the same period. Such an improvement in ASP
was the result of the Company’s ability to capitalize on securing its coal sales based more on fixed pricing
rather than index-linked.
3
FINANCIALS
Financial and Operational Highlights
% Change
9 Months
9M13
9M12
2012-2013 Quarter III
2013
Figures are in million US$ unless
otherwise stated
Quarter II
2013
% Change
Semester
1 20122013
Operation Performance
Production Volume
Mn ton
4,6
4,1
13,3%
1,8
1,5
20,0%
Sales Volume
Mn ton
4,4
3,7
20,2%
1,6
1,4
17,8%
Overburden Removal
Mbcm
62,9
64,6
(2,6%)
22,9
20,4
11,9%
Stripping Ratio (SR)
x
13,7
16,0
(14,1%)
12,7
13,6
(6,6%)
FOB Vessel Cash Cost**
US$/ton
54,4
65,1
(16,4%)
53,4
54,6
(2,2%)
Average Selling Price
(ASP)
US$/ton
67,4
77,2
(12,7%)
67,9
68,2
(0,4%)
9M13
9M12
% Change
9 Months
2012-2013
Quarter III
2013
Quarter II
2013
% Change
Semester
1 20122013
Financial Performance
Profit (Loss)
Revenue
US$ Mn
297,5
283,4
5,0%
109,4
93,1
17,5%
Cost of Goods Sold
US$ Mn
244,7
242,6
0,9%
87,7
76,4
14,7%
Gross Profit
US$ Mn
52,8
40,8
29,4%
21,7
16,7
30,1%
Operational Profit
US$ Mn
29,3
23,6
23,9%
11,5
10,1
13,8%
EBITDA***
US$ Mn
40,1
22,6
77,8%
18,2
12,5
45,6%
Total Comprehensive
Income For The Periods
US$ Mn
19,7
16,0
23,3%
7,0
6,7
4,8%
30 Sept
2013
31 Dec
2012
% Change
2012-2013
Quarter III
2013
Quarter II
2013
% Change
Semester
1 20122013
Balance Sheet
Interest Bearing Debt
US$ Mn
58,9
49,0
20,2%
Cash and Cash Equivalents
US$ Mn
45,5
36,3
25,2%
Net Debt*
US$ Mn
13,4
12,7
5,6%
Total Assets
US$ Mn
289,8
261,5
10,8%
Total Liabilities
US$ Mn
167,7
150,6
11,4%
Total Equity
US$ Mn
122,1
110,9
10,1%
CAPEX
US$ Mn
15,4
13,8
11,1%
9M13
9M12
% Change
9 Months
2012-2013
Financial Ratios
Gross Profit Margin
%
17,7
14,4
23,3%
19,8
17,9
10,6%
EBITDA Margin
%
13,5
8,0
69,4%
16,6
13,4
23,9%
Operational Margin
%
9,8
8,3
18,0%
10,5
10,8
(2,7%)
Note:
* Net Debt = interest bearing debt – cash and cash equivalents
** FOB Vessel Cash Cost = COGS including royalty and selling expense – depreciation and amortization
*** EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
4
PROFIT (LOSS)
SALES
The weakness in the global coal price of 2012 and 2013 resulted in the Company’s ASP to decline 12.7%
from US$ 77.2/ton in 9M12 to US$ 67.4/ton in 9M13. Nevertheless, the Company managed to expand its
sales by 5.0% y-o-y from US$ 283.4 million in 9M12 to US$ 297.5 in 9M13, and by 17.4% q-o-q to US$ 109.4
million as compared to 2Q13.
COST OF GOODS SOLD
Although sales volume climbed by 20.2% y-o-y, the Company managed its cost of goods sold efficiently such
that the rise was at a meagre 0.9% from US$ 242.6 million in 9M12 to US$ 244.7 million in 9M13. This
stemmed from a significant decrease in FOB vessel cash cost from US$ 65.1/ton in 9M12 to US$ 54.4/ton in
9M13, whereby mining cost (overburden removal and dump distance) makes up its two major cost
components. Such drastic reduction in FOB vessel cash cost was, in turn, the result of the Company’s
revision of its mine plan in 3Q12 as a response to the continued weakness in the global coal market condition
during 1H12, hence enabling it to generate positive cash margins thereafter.
Change in Cash Margin by Quarter (in US$/ton)
FOB Vessel Cash cost
68.1
66.4
66.0
ASP
67.8
60.6
55.3
3Q12
Cash Margin
US$ 5,4
54.6
1Q13
2Q13
US$ 11,1
US$ 13,6
53.4
3Q13
US$ 14,5
EBITDA
EBITDA rose considerably by 77.8% y-o-y from US$ 22.6 million in 9M12 to US$ 40.1 million in 9M13,
stemming mainly from the Company’s successful strategy in lowering mining costs as well as improving sales
volume amidst the weaker ASP. As a result, this positively boosted EBITDA margin from 8.0% in 9M12 to
13.5% in 9M13.
On quarterly basis, EBITDA in 3Q13 increased 45.6% from US$ 12.5 in 2Q13 to US$ 18.2 million, which
predominantly came from a combination of expansion in sales volume and the Company’s on-going cost
efficiency initiatives. This resulted in higher EBITDA margin from 13.4% in 2Q13 to 16.6% in 3Q13.
COMPREHENSIVE INCOME
After subtracting tax expense of US$ 10.3 million from profit before tax for the period 9M13, the Company
booked total comprehensive income (before minority interest) of US$ 19.7 million, up 23.3% from US$ 16.0
million in 9M12. Meanwhile on q-o-q, comprehensive income rose 4.8% from US$ 6.7 million in 2Q13 to US$
7.0 million in 3Q13.
This income achievement of US$ 19.7 million incorporated the impact of forex loss worth US$ 4.6 million,
attributable to the weakening of the IDR against the US$ during 2013. This forex loss mainly was the result of
unrealized forex loss from cash and cash equivalents of unutilized IPO proceeds denominated in IDR and to
a lesser extent other IDR receivables. Throughout 9M13, the IDR weakened by as much as 20% against the
th
US$, from IDR 9,698 in early January 2013 to IDR 11,613 as per 30 September 2013.
5
OPERATING CASH FLOW
The Company’s operating cash flow experienced a y-o-y improvement from 9M12 to 9M13. In 9M13, it
generated operating cash flow of US$ 25.6 million, a stark contrast as compared to minus US$ 29.4 in 9M12.
Such an increase was in line with the Company’s continued improvement in performance.
BALANCE SHEET
ASSETS
The Company’s asset stood at US$ 289.8 million in 9M13 or up 10.8% from US$ 261.5 as per endDecember 2012. Such growth predominantly resulted from a build-up in cash and equivalents of US$ 9.2
million, inventories of US$ 7.9 million, and fixed assets of US$ 8.3 million.
LIABILITIES
Meanwhile, total liabilities rose by 11.4% y-o-y to US$ 167.7 million in 9M13 from US$ 150.6 million as per
st
31 December 2012 and interest bearing debt (loans) expanded by 20.2% to US$ 58.9 million in 9M13 from
US$ 49.0 million as per end of 2012.
In 2013, the Company successfully secured a term loan from a major reputable Bank whose terms and
conditions as well as lending rate were similar to those when the former secured previous loans back in 2011
during a much more favorable coal market condition than today. To date, the loans secured from banks are
allocated among others for infrastructure expansion.
EQUITY
Total equity in 9M13 increased 10.1% to US$ 122.1 million from US$ 110.94 million as per end-2012, and
this was attributable to additional income for the period.
CAPITAL EXPENDITURE (CAPEX)
Until end of September 2013, the Company has earmarked and spent CAPEX of US$ 15.4 million, some of
which have been used for the construction of a new coal processing plant (CPP) at IM, a hauling road
between TMU and IM (via ABN), a second underpass at ABN, and land compensation. For the full year of
2013, the Company is targeting to earmark US$ 27.1 million of CAPEX.
MARKETING
During 9M13, the Company sold its coal to several notable Asian countries, which included China, Taiwan,
India, and Vietnam. Some of the large reputable international traders and, to a lesser extent, end-users such
as power generation companies make up the Company’s main customers. As per 9M13, the Company has
secured and achieved 72.1% of total sales volume in 2013, predominantly based on fixed price.
6
Sales Destination by Country
South Korea
9.9%
China
31.7%
Taiwan
22.7%
India
9.2%
OPERATIONAL UPDATE
Initiative
Achievement
ABN
Construction of second underpass at ABN, which is expected
to reduce OB dump distance
Construction
is
currently
underway
and
is
due
for
completion in 4Q13
IM
Construction of Coal Processing Plant (CPP) is expected to
boost coal production capacity at IM from 3 million tons per
annum (tpa) to 6 million tpa. This new CPP not only will
process TMU’s coal, but also will create more cost efficiency
and increase coal stockpile capacity. Overall, the Company’s
total production/infrastructure capacity is expected to expand
significantly from currently 13 million tpa to 16 million tpa by
end 2013
Construction of CPP is
nearing completion
7
TMU
Construction of hauling road is expected to connect TMU and
IM via ABN. Cost saving in the form of lower logistics costs is
expected at US$ 5-6/ton
TMU successfully achieved total production of 275,000 tons in
3Q13, up by 88.4% from 146,000 tons in 2Q13
Construction of hauling
road from TMU to IM,
via
ABN
was
completed in 2Q13
ahead of schedule
TMU’s Production Achievement (in 000 tons)
300
275
250
200
146
150
100
85
84
3Q 2012
1Q 2013
59
50
23
1Q 2012
2Q 2012
2Q 2013
3Q 2013
PT TOBA BARA SEJAHTRA TBK at a Glance
PT Toba Bara Sejahtra Tbk (“The Company”) is one of the major competitive producers of thermal coal in
Indonesia. The Company has grown into a major coal producer operating 3 (three) coal mine concessions in
East Kalimantan. These adjacent coal mining concessions, which are held through various operating
companies, all enjoy highly favorable mine locations, with close proximity to local river ports. The Company’s
concession areas total approximately 7,087 hectares.
The Company currently has three operating subsidiaries, namely PT Adimitra Baratama Nusantara (ABN),
PT Indomining (IM) and PT Trisensa Mineral Utama (TMU). The Company’s ownerships in ABN, IM, and
TMU are 51.00%, 99.99%, and 99.99% respectively.
th
On 6 July, 2012, the Company listed its shares at the Indonesia Stock Exchange (IDX) under the ticker
‘TOBA’ and released as many as 210,681,000 shares or 10.5% of its paid up capital with an IPO proceed of
IDR 400.3 billion.
8
Locations of Toba Bara’s Concessions
ABN is located in Sanga-Sanga, Kutai Kartanegara, East Kalimantan and is operated under the IUPOP
permit. It started operations in September 2008. ABN covers an area reaching 2,990 hectares, and has
estimated coal resources of around 156 million tons.
IM is located in Sanga-Sanga, Kutai Kartanegara, East Kalimantan and is operated under the IUPOP permit.
It started operations in August 2007. IM covers 683 hectares of land, and has estimated coal resources of 37
million tons.
Meanwhile, TMU is located in Loa Janan, Muara Jawa and Sanga-Sanga, Kutai Kartanegara, East
Kalimantan. With IUPOP permit, TMU started operations in October 2011. TMU covers 3,414 hectares of
land, and has estimated coal resources of 43 million tons.
Altogether, the total coal resources of the Company are currently estimated at 236 million tons.
For further information, please contact:
PT Toba Bara Sejahtra Tbk
Pandu P. Syahrir
Iwan Sanyoto
Corporate Secretary
Head of Investor Relations
(Sekretaris Perusahaan)
(Kepala Hubungan Investor)
Email: corsec@tobabara.com
Email: iwan.sanyoto@tobabara.com
Priambodo
Corporate Communication
(Komunikasi Perusahaan)
Email: priambodo@tobabara.com