20151303 toba mdna 2014 full year 2014 official english version 1
Management Discussion & Analysis Full Year 2014
Toba Bara Sejahtra Tbk and Subsidiaries
December 2014
1
SUMMARY
Continued global coal supply and demand imbalances mainly attributable to China’s slowing import
demand growth and lack of supply discipline from major producers caused further deterioration in global
coal prices throughout 2014. From 2013 to 2014, the average Newcastle (NEWC) Index price declined by
17.0% from US$ 85.3/ton in 2013 to US$ 70.8/ton in 2014. Furthermore, the NEWC Index price in 4Q14
was recorded at a low US$ 63.8, the lowest fourth quarter NEWC Index price in the last six years.
Given that the global coal market has been under pressure for the past two years, PT Toba Bara Sejahtra
Tbk (The Company) continues to be well positioned in maintaining its costs structure relatively stable for
the year post a series of cost efficiency initiatives conducted over 2013 period. This has enabled the
Company to focus on profitable production growth. In 2014, the Company has continued on the positive
momentum of its operational performance by successfully maintaining an average quarterly production
run-rate of 2.0 million tons, while generating full year EBITDA/ton of around US$ 8-10/ton.
As the Company’s three concessions are located adjacent to each other, for the past year, the Company
has been able to maximize cost efficiency initiatives through joint mine plan and infrastructure sharing.
This has allowed the Company to successfully boost production volume and sales volume by 24.6% to
8.1 million tons and by 23.4% to 7.9 million tons in 2014 respectively. Throughout 2014, on average, the
Company has successfully maintained a quarterly production volume run rate of 2.0 million tons and was
able to achieve its highest production volume in history of 2.3 million tons in 3Q14.
Financially, the Company increased its top line sales by 18.5% from 2013 to 2014. Despite a 17.0%
correction in the NEWC Index price, the Company posted a decline of 4.4% in its average selling price
(ASP) over the same period. On the cost side, the Company lowered its FOB (Free on Board) cash cost
by 3.0% over the same period. A combination of stronger sales efforts through higher sales volume
backed by higher quality buyers and lower overall costs resulted in a 14.7% higher EBITDA in 2014 at
US$ 67.3 million. This, in turn, translated to a more favorable income of US$ 35.8 million for 2014.
Special Note: The following discussion on the Company’s performance is based on the Consolidated Financial
st
Statements as per 31 December 2014 (audited), which mainly focuses on the operational and financial
performances of all three of its coal mining subsidiaries: PT Adimitra Baratama Nusantara (ABN), PT Indomining (IM),
dan PT Trisensa Mineral Utama (TMU).
2
PRODUCTION & OPERATION
The Company’s coal production volume expanded 24.6% from 6.5 million tons in 2013 to 8.1 million tons
in 2014 on the back of significantly higher volume contributions from TMU and IM. The production volume
of 8.1 million tons in 2014 resulted from operations of all three operating subsidiaries with the following
respective contributions: ~4.4 million tons from ABN, ~2.3 million tons from IM, and ~1.4 million tons from
TMU. The Company’s production growth of 24.6% was mainly from TMU’s substantial production ramp
up post the earlier-than-expected completion of its hauling road in 2Q13 connecting TMU and IM via
ABN. While as of December 2014, ABN remains to be the Company’s main production volume
contributor, its contribution has fallen from 64.6% in 2013 to 54.3% in 2014. On the other hand, the
contribution of TMU to total Company production has surged from 13.8% in 2013 to 17.3% in 2014. On
stand-alone basis, the contributions of IM and TMU were crucial as they posted annual production
volume growth of around 64.3% and 55.6% in 2014 respectively.
Changes in Production and SR at ABN, IM and TMU
ABN
IM
TMU
As compared to 2013 SR of 13.4x, SR in 2014 had stabilized at 13.3x reflecting the Company’s continued
efforts in improving its operational performance amidst the low coal price environment. However, in
anticipation of continued weak coal prices ahead, SR increased by 10.4% from 12.5x in 3Q14 to 13.8x in
4Q14 due to pre-stripping activities to allow for better coal extraction in subsequent periods. Over the
same period, production volume fell from 2.3 million tons to 1.7 million tons due to adverse weather
conditions resulting from higher than expected rainfall.
Average Production, SR, and Dump Distance
The Company’s ASP only contracted by 4.4% from US$ 66.6/ton in 2013 to US$ 63.7/ton in 2014, which
compared favorably with NEWC Index price that fell 17.0% over the same period. The ASP
outperformance over that of NEWC Index price was due to the Company’s ability to capitalize on
securing its coal sales based more on fixed pricing rather than index-linked during the latter part of 2013.
In the case of 2014 sales volume, the Company sold in advance the majority of its 2014 sales volume to
its quality buyers by entering into fixed-priced contracts over the end periods of 2013. The terms of
payment were favorable to the Company such that the typical buyers, notably international traders, would
prepay certain percentage of the contract values. This effort enabled the Company to maximize its pricing
strategy given the adverse coal market condition.
3
Financial and Operational Highlights
All figures are in million US$ unless
2013
otherwise stated
Operation
2014
Changes
Sales Volume
mn ton
6.4
7.9
23.4%
Production Volume
mn ton
6.5
8.1
24.6%
X
13.4
13.3
(0.7)%
FOB Cash Cost*
US$/ton
52.9
51.3
(3.0)%
NEWC Index Price
US$/ton
85.3
70.8
(17.0)%
Average Selling Price (ASP)
US$/ton
66.6
63.7
(4.4)%
Stripping Ratio (SR)
Financial Performance
2013
Profit (Loss)
2014
Changes
Sales
US$ mn
421.9
500.0
18.5%
Cost of Goods Sold
US$ mn
342.3
413.8
20.9%
Gross Profit
US$ mn
79.6
86.2
8.3%
Operating Profit
US$ mn
50.0
56.0
12.0%
EBITDA**
US$ mn
58.7
67.3
14.7%
Profit for the Period
US$ mn
34.6
35.8
3.5%
EBITDA/ton
US$/ton
9.2
8.6
(6.5)%
Capex
US$ mn
23.3
11.8
(49.4)%
2013
Balance Sheet
2014
Changes
Interest Bearing Debt
US$ mn
55.9
58.1
3.9%
Cash and Cash Equivalents
US$ mn
63.3
47.8
(24.5)%
Net Debt***
US$ mn
Net Cash
10.3
N/A
Total Assets
US$ mn
311.7
300.6
(3.6)%
Total Liabilities
US$ mn
181.2
158.3
(12.6)%
Total Equity
US$ mn
130.5
142.4
9.1%
Gross Profit Margin
%
18.9%
17.2%
(9.0)%
EBITDA Margin
%
13.9%
13.5%
(2.9)%
Operating Profit Margin
%
11.9%
11.2%
(5.9)%
Financial Ratios
Notes:
*FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization
**EBITDA = Gross profit – selling expenses – G&A + depreciation and amortization
*** Net Debt = Interest bearing debt – cash and cash equivalents
4
PROFIT (LOSS)
SALES
Although the weaker NEWC Index price impacted the Company’s overall ASP by 4.4% from US$
66.6/ton in 2013 to US$ 63.7/ton in 2014, the Company booked an 18.5% rise in sales from US$ 421.9
million in 2013 to US$ 500.0 million in 2014 on the back of a solid 23.4% increase in sales volume over
the same period.
COST OF GOODS SOLD
A 20.9% rise in cost of goods sold from US$ 342.3 million in 2013 to US$ 413.8 million in 2014 stemmed
from the Company’s significant increase in production volume by 24.6%, despite a decrease in FOB cash
cost. Higher production volume typically increases mining costs such as OB removal, overhaul distances,
coal extraction, and fuel, which account for the largest components of production costs. A y-o-y decline in
FOB cash cost to US$ 51.3/ton in 2014 from US$ 52.9/ton in 2013 resulted from better execution of mine
plan and lower fuel costs.
EBITDA
EBITDA surged by 14.7% from US$ 58.7 million in 2013 to US$ 67.3 million in 2014, resulting from
predominantly higher sales volume and better mine plan execution amidst the weaker ASP, while
lowering mining costs in the process. However, the weaker ASP had slightly lowered EBITDA margin by
2.9%.
The first graph below depicts the EBITDA evolution on q-o-q basis from US$ 9.4 million in 1Q13 to US$
9.5 million in 4Q14 and the NEWC Index price from US$ 93.2/ton to US$ 63.8/ton over the same period.
From 1Q13 to 3Q14, the Company successfully maintained strong EBITDA and stable cash margin
during continued weaker coal price environment. However, due to lower sales and production volume in
addition to pre-stripping activities, EBITDA decreased from US$ 19.5 million in 3Q14 to US$ 9.5 million in
4Q14.
Quarterly EBITDA vs NEWC Index
1Q13 – 4Q14
ASP vs FOB Cash Cost
1Q13 – 4Q14
PROFIT FOR THE PERIOD
The Company booked total profit for the period (before minority interest) of US$ 35.8 million in 2014, up
by 3.5% from US$ 34.6 million in 2013.
BALANCE SHEET
ASSETS
st
The Company’s assets as at 31 December 2014 stood at US$ 300.6 million, or decreased by 3.6% from
st
US$ 311.7 million as per 31 December 2013.
5
LIABILITIES
st
Total liabilities as at 31 December 2014 decreased by 12.6% to US$ 158.3 million from US$ 181.2
million as per end-December 2013 and interest bearing debt increased by 3.9% to US$ 58.1 million from
US$ 55.9 million over the same period. Meanwhile, leverage metrics such as Net Debt to EBITDA ratios
have constantly recorded stability from quarter to quarter at way below 2x.
Net Debt to EBITDA
EQUITY
Total equity at the end of December 2014 slightly increased 9.1% to US$ 142.4 million from US$ 130.5
st
million as of 31 December 2013, and this was attributable to additional profit for the period.
CAPITAL EXPENDITURE (CAPEX)
st
Until 31 December 2014, the Company had realized total CAPEX of around US$ 11.8 million, which is
mainly allocated for land compensation and operational facilities and equipment.
MARKETING
In 2014, the Company sold its coal mainly to Asian countries, such as China, Korea, India, and Taiwan.
Some of the large reputable international traders and end-users such as power generation companies
make up the Company’s main customers. Through 2014, the Company has successfully maintained its
2013 marketing milestone achievement by growing a more diversified and higher quality customer base,
expanding export market coverage, while maximizing its pricing mechanism through various hedging
strategies. The Company also utilized its own in-house marketing team to tap into high quality end users
such as in Japan without incurring any significant marketing costs.
Sales Destinations by Country 2014
Total Sales Volume: 7.9 mt
2% 8%
3%
4%
China
Korea
34%
India
Taiwan
15%
Philippines
Vietnam
Thailand
16%
18%
Others
6
2015 BRIEF OUTLOOK
Entering 2015, the global seaborne coal market is expected to remain under pressure from continued
excess supply due to major producers’ on-going output not being met by the predominantly lackluster
Chinese import demands. Such weak import demands stem from China’s weaker economic growth in an
already oversupplied domestic market as well as its much improved access to renewable energy
sources. Meanwhile, continued supply contributions from the major producers/exporters remain a major
concern on the supply side. As such, global coal prices are expected to remain restrained over the shortmedium term until the market finds ground to rebalance.
Given the above factors, in 2015, the Company is expected to focus its resources and efforts in
maintaining business sustainability and resilience. For the past few years, the Company has been
continuously improving cost efficiencies by running executable mine plans that meet the combined
objective of achieving profitable targets and sustaining long term reserves. In line with this objective, the
Company is expected to target production output of 6-8 million tons in 2015.
While on the marketing front, the Company plans to continue with its on-going combined strategy of
building a well-diversified customer base (increasing more sales exposure to end user customers),
securing good quality sales backed by quality buyers, engaging in favorable terms of payment, and
improving quality control on product delivery. To date, the Company has secured more than 60% of its
2015 sales volume target.
After completing its 2013 program of undergoing infrastructure capacity upgrade from the then 13 million
tpa (tons per annum) to become 16 million tpa, the Company plans to allocate CAPEX of US$ 10-14
million for 2015 to support its on-going sustainability strategy. The planned CAPEX is expected to mainly
strengthen operational facilities and equipment (conveyor and heavy equipment) and partially, for land
compensation.
SNAPSHOT OF PT TOBA BARA SEJAHTRA TBK
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 four operating subsidiaries, three in coal mining namely PT Adimitra
Baratama Nusantara (ABN), PT Indomining (IM), PT Trisensa Mineral Utama (TMU) and one in palm oil
namely PT Perkebunan Kaltim Utama I (PKU). The Company’s ownerships in ABN, IM, TMU and PKU
are 51.00%, 99.99%, 99.99% and 90.00% 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.
7
Locations of Toba Bara’s Concessions
Major City
Jetty
Transhipment Point
TMU - IM Hauling Road
Major city is
less than 50
km
Muara
Berau
Furthest pit to
jetty 25km | with
closest one ~5km
Samarinda
~55 Km
(total ~120 Km)
Sungai Mahakam
17km
IM
ABN
TMU
ABN
~ 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
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
Toba Bara Sejahtra Tbk and Subsidiaries
December 2014
1
SUMMARY
Continued global coal supply and demand imbalances mainly attributable to China’s slowing import
demand growth and lack of supply discipline from major producers caused further deterioration in global
coal prices throughout 2014. From 2013 to 2014, the average Newcastle (NEWC) Index price declined by
17.0% from US$ 85.3/ton in 2013 to US$ 70.8/ton in 2014. Furthermore, the NEWC Index price in 4Q14
was recorded at a low US$ 63.8, the lowest fourth quarter NEWC Index price in the last six years.
Given that the global coal market has been under pressure for the past two years, PT Toba Bara Sejahtra
Tbk (The Company) continues to be well positioned in maintaining its costs structure relatively stable for
the year post a series of cost efficiency initiatives conducted over 2013 period. This has enabled the
Company to focus on profitable production growth. In 2014, the Company has continued on the positive
momentum of its operational performance by successfully maintaining an average quarterly production
run-rate of 2.0 million tons, while generating full year EBITDA/ton of around US$ 8-10/ton.
As the Company’s three concessions are located adjacent to each other, for the past year, the Company
has been able to maximize cost efficiency initiatives through joint mine plan and infrastructure sharing.
This has allowed the Company to successfully boost production volume and sales volume by 24.6% to
8.1 million tons and by 23.4% to 7.9 million tons in 2014 respectively. Throughout 2014, on average, the
Company has successfully maintained a quarterly production volume run rate of 2.0 million tons and was
able to achieve its highest production volume in history of 2.3 million tons in 3Q14.
Financially, the Company increased its top line sales by 18.5% from 2013 to 2014. Despite a 17.0%
correction in the NEWC Index price, the Company posted a decline of 4.4% in its average selling price
(ASP) over the same period. On the cost side, the Company lowered its FOB (Free on Board) cash cost
by 3.0% over the same period. A combination of stronger sales efforts through higher sales volume
backed by higher quality buyers and lower overall costs resulted in a 14.7% higher EBITDA in 2014 at
US$ 67.3 million. This, in turn, translated to a more favorable income of US$ 35.8 million for 2014.
Special Note: The following discussion on the Company’s performance is based on the Consolidated Financial
st
Statements as per 31 December 2014 (audited), which mainly focuses on the operational and financial
performances of all three of its coal mining subsidiaries: PT Adimitra Baratama Nusantara (ABN), PT Indomining (IM),
dan PT Trisensa Mineral Utama (TMU).
2
PRODUCTION & OPERATION
The Company’s coal production volume expanded 24.6% from 6.5 million tons in 2013 to 8.1 million tons
in 2014 on the back of significantly higher volume contributions from TMU and IM. The production volume
of 8.1 million tons in 2014 resulted from operations of all three operating subsidiaries with the following
respective contributions: ~4.4 million tons from ABN, ~2.3 million tons from IM, and ~1.4 million tons from
TMU. The Company’s production growth of 24.6% was mainly from TMU’s substantial production ramp
up post the earlier-than-expected completion of its hauling road in 2Q13 connecting TMU and IM via
ABN. While as of December 2014, ABN remains to be the Company’s main production volume
contributor, its contribution has fallen from 64.6% in 2013 to 54.3% in 2014. On the other hand, the
contribution of TMU to total Company production has surged from 13.8% in 2013 to 17.3% in 2014. On
stand-alone basis, the contributions of IM and TMU were crucial as they posted annual production
volume growth of around 64.3% and 55.6% in 2014 respectively.
Changes in Production and SR at ABN, IM and TMU
ABN
IM
TMU
As compared to 2013 SR of 13.4x, SR in 2014 had stabilized at 13.3x reflecting the Company’s continued
efforts in improving its operational performance amidst the low coal price environment. However, in
anticipation of continued weak coal prices ahead, SR increased by 10.4% from 12.5x in 3Q14 to 13.8x in
4Q14 due to pre-stripping activities to allow for better coal extraction in subsequent periods. Over the
same period, production volume fell from 2.3 million tons to 1.7 million tons due to adverse weather
conditions resulting from higher than expected rainfall.
Average Production, SR, and Dump Distance
The Company’s ASP only contracted by 4.4% from US$ 66.6/ton in 2013 to US$ 63.7/ton in 2014, which
compared favorably with NEWC Index price that fell 17.0% over the same period. The ASP
outperformance over that of NEWC Index price was due to the Company’s ability to capitalize on
securing its coal sales based more on fixed pricing rather than index-linked during the latter part of 2013.
In the case of 2014 sales volume, the Company sold in advance the majority of its 2014 sales volume to
its quality buyers by entering into fixed-priced contracts over the end periods of 2013. The terms of
payment were favorable to the Company such that the typical buyers, notably international traders, would
prepay certain percentage of the contract values. This effort enabled the Company to maximize its pricing
strategy given the adverse coal market condition.
3
Financial and Operational Highlights
All figures are in million US$ unless
2013
otherwise stated
Operation
2014
Changes
Sales Volume
mn ton
6.4
7.9
23.4%
Production Volume
mn ton
6.5
8.1
24.6%
X
13.4
13.3
(0.7)%
FOB Cash Cost*
US$/ton
52.9
51.3
(3.0)%
NEWC Index Price
US$/ton
85.3
70.8
(17.0)%
Average Selling Price (ASP)
US$/ton
66.6
63.7
(4.4)%
Stripping Ratio (SR)
Financial Performance
2013
Profit (Loss)
2014
Changes
Sales
US$ mn
421.9
500.0
18.5%
Cost of Goods Sold
US$ mn
342.3
413.8
20.9%
Gross Profit
US$ mn
79.6
86.2
8.3%
Operating Profit
US$ mn
50.0
56.0
12.0%
EBITDA**
US$ mn
58.7
67.3
14.7%
Profit for the Period
US$ mn
34.6
35.8
3.5%
EBITDA/ton
US$/ton
9.2
8.6
(6.5)%
Capex
US$ mn
23.3
11.8
(49.4)%
2013
Balance Sheet
2014
Changes
Interest Bearing Debt
US$ mn
55.9
58.1
3.9%
Cash and Cash Equivalents
US$ mn
63.3
47.8
(24.5)%
Net Debt***
US$ mn
Net Cash
10.3
N/A
Total Assets
US$ mn
311.7
300.6
(3.6)%
Total Liabilities
US$ mn
181.2
158.3
(12.6)%
Total Equity
US$ mn
130.5
142.4
9.1%
Gross Profit Margin
%
18.9%
17.2%
(9.0)%
EBITDA Margin
%
13.9%
13.5%
(2.9)%
Operating Profit Margin
%
11.9%
11.2%
(5.9)%
Financial Ratios
Notes:
*FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization
**EBITDA = Gross profit – selling expenses – G&A + depreciation and amortization
*** Net Debt = Interest bearing debt – cash and cash equivalents
4
PROFIT (LOSS)
SALES
Although the weaker NEWC Index price impacted the Company’s overall ASP by 4.4% from US$
66.6/ton in 2013 to US$ 63.7/ton in 2014, the Company booked an 18.5% rise in sales from US$ 421.9
million in 2013 to US$ 500.0 million in 2014 on the back of a solid 23.4% increase in sales volume over
the same period.
COST OF GOODS SOLD
A 20.9% rise in cost of goods sold from US$ 342.3 million in 2013 to US$ 413.8 million in 2014 stemmed
from the Company’s significant increase in production volume by 24.6%, despite a decrease in FOB cash
cost. Higher production volume typically increases mining costs such as OB removal, overhaul distances,
coal extraction, and fuel, which account for the largest components of production costs. A y-o-y decline in
FOB cash cost to US$ 51.3/ton in 2014 from US$ 52.9/ton in 2013 resulted from better execution of mine
plan and lower fuel costs.
EBITDA
EBITDA surged by 14.7% from US$ 58.7 million in 2013 to US$ 67.3 million in 2014, resulting from
predominantly higher sales volume and better mine plan execution amidst the weaker ASP, while
lowering mining costs in the process. However, the weaker ASP had slightly lowered EBITDA margin by
2.9%.
The first graph below depicts the EBITDA evolution on q-o-q basis from US$ 9.4 million in 1Q13 to US$
9.5 million in 4Q14 and the NEWC Index price from US$ 93.2/ton to US$ 63.8/ton over the same period.
From 1Q13 to 3Q14, the Company successfully maintained strong EBITDA and stable cash margin
during continued weaker coal price environment. However, due to lower sales and production volume in
addition to pre-stripping activities, EBITDA decreased from US$ 19.5 million in 3Q14 to US$ 9.5 million in
4Q14.
Quarterly EBITDA vs NEWC Index
1Q13 – 4Q14
ASP vs FOB Cash Cost
1Q13 – 4Q14
PROFIT FOR THE PERIOD
The Company booked total profit for the period (before minority interest) of US$ 35.8 million in 2014, up
by 3.5% from US$ 34.6 million in 2013.
BALANCE SHEET
ASSETS
st
The Company’s assets as at 31 December 2014 stood at US$ 300.6 million, or decreased by 3.6% from
st
US$ 311.7 million as per 31 December 2013.
5
LIABILITIES
st
Total liabilities as at 31 December 2014 decreased by 12.6% to US$ 158.3 million from US$ 181.2
million as per end-December 2013 and interest bearing debt increased by 3.9% to US$ 58.1 million from
US$ 55.9 million over the same period. Meanwhile, leverage metrics such as Net Debt to EBITDA ratios
have constantly recorded stability from quarter to quarter at way below 2x.
Net Debt to EBITDA
EQUITY
Total equity at the end of December 2014 slightly increased 9.1% to US$ 142.4 million from US$ 130.5
st
million as of 31 December 2013, and this was attributable to additional profit for the period.
CAPITAL EXPENDITURE (CAPEX)
st
Until 31 December 2014, the Company had realized total CAPEX of around US$ 11.8 million, which is
mainly allocated for land compensation and operational facilities and equipment.
MARKETING
In 2014, the Company sold its coal mainly to Asian countries, such as China, Korea, India, and Taiwan.
Some of the large reputable international traders and end-users such as power generation companies
make up the Company’s main customers. Through 2014, the Company has successfully maintained its
2013 marketing milestone achievement by growing a more diversified and higher quality customer base,
expanding export market coverage, while maximizing its pricing mechanism through various hedging
strategies. The Company also utilized its own in-house marketing team to tap into high quality end users
such as in Japan without incurring any significant marketing costs.
Sales Destinations by Country 2014
Total Sales Volume: 7.9 mt
2% 8%
3%
4%
China
Korea
34%
India
Taiwan
15%
Philippines
Vietnam
Thailand
16%
18%
Others
6
2015 BRIEF OUTLOOK
Entering 2015, the global seaborne coal market is expected to remain under pressure from continued
excess supply due to major producers’ on-going output not being met by the predominantly lackluster
Chinese import demands. Such weak import demands stem from China’s weaker economic growth in an
already oversupplied domestic market as well as its much improved access to renewable energy
sources. Meanwhile, continued supply contributions from the major producers/exporters remain a major
concern on the supply side. As such, global coal prices are expected to remain restrained over the shortmedium term until the market finds ground to rebalance.
Given the above factors, in 2015, the Company is expected to focus its resources and efforts in
maintaining business sustainability and resilience. For the past few years, the Company has been
continuously improving cost efficiencies by running executable mine plans that meet the combined
objective of achieving profitable targets and sustaining long term reserves. In line with this objective, the
Company is expected to target production output of 6-8 million tons in 2015.
While on the marketing front, the Company plans to continue with its on-going combined strategy of
building a well-diversified customer base (increasing more sales exposure to end user customers),
securing good quality sales backed by quality buyers, engaging in favorable terms of payment, and
improving quality control on product delivery. To date, the Company has secured more than 60% of its
2015 sales volume target.
After completing its 2013 program of undergoing infrastructure capacity upgrade from the then 13 million
tpa (tons per annum) to become 16 million tpa, the Company plans to allocate CAPEX of US$ 10-14
million for 2015 to support its on-going sustainability strategy. The planned CAPEX is expected to mainly
strengthen operational facilities and equipment (conveyor and heavy equipment) and partially, for land
compensation.
SNAPSHOT OF PT TOBA BARA SEJAHTRA TBK
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 four operating subsidiaries, three in coal mining namely PT Adimitra
Baratama Nusantara (ABN), PT Indomining (IM), PT Trisensa Mineral Utama (TMU) and one in palm oil
namely PT Perkebunan Kaltim Utama I (PKU). The Company’s ownerships in ABN, IM, TMU and PKU
are 51.00%, 99.99%, 99.99% and 90.00% 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.
7
Locations of Toba Bara’s Concessions
Major City
Jetty
Transhipment Point
TMU - IM Hauling Road
Major city is
less than 50
km
Muara
Berau
Furthest pit to
jetty 25km | with
closest one ~5km
Samarinda
~55 Km
(total ~120 Km)
Sungai Mahakam
17km
IM
ABN
TMU
ABN
~ 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
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