company presentation 9m 2017
PT Toba Bara Sejahtra Tbk (䇾Toba䇿)
PT Toba Bara Sejahtra Tbk (TOBA)
Company
CompanyPresentation
Presentation
April 2017 1
September 2017
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra Tbk (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
Company Profile
2
Performance Highlights
3
Strategy to Venture into Power
i
Sulbagut-1 Project
ii
Sulut-3 Project
3
2
Performance Highlights
Performance
Highlights
Company
Profile
1
4
PT Toba Bara Sejahtra Tbk in Brief
Coal Mining
Palm Oil Plantation & Mill
East Kalimantan
Kalimanta
n
Location:
Kutai
Kalimantan Timur
Kartanegara,
Hak Guna Usaha (HGU) covers
8.633 ha. where 2.701 ha has
been planted
Location: Kutai Kartanegara,
Kalimantan Timur
Power Generation
Total Concession: 7.087 ha
Gorontalo
North Sulawesi
GLP and MCL established in February 2016 and
March 2017 respectively for development of steam
(coal) fired power plant project (CFPP) with capacity of
2x50 MW each
25 year Power Purchase Agreement (PPA) through
Independent Power Producer (IPP) scheme with PLN
as single offtaker
5
Ownership Structure
Highland Strategic
Holdings Pte. Ltd.
Davit Togar
Pandjaitan
PT Toba Sejahtra
61.91%
10.00%
PT Bara Makmur
Abadi
6.25%
0.75%
PT Sinergi Sukses
Utama
Roby Budi Prakoso
3.64%
5.10%
Public *)
12.35%
*) Incl. Baring Private Equity
as anchor investor
99.60%
99.99%
PT Toba Bumi Energi
(䇾TBE䇿)
99.99%
51.00%
License
Area
Reserve
20-year Production
Operation Mining Permit
(IUP-OP) expiring in
December 2029
2.990 ha
Reserves: 117 MT - JORC
Resources: 156 MT - JORC
IUP-OP extension was
completed in March
2013 (First out of 2
extensions: in 2023.
with tenor of 10 years
each)
683 ha
Reserve: 22 MT - JORC
Resources: 37 MT - JORC
99.99%
13-year IUP-OP expires
in December 2023
3.414 ha
Reserves : 8 MT - JORC
Resources: 43 MT - JORC
60.00%
90.00%
90.00%
GLP’s PPA with PLN(1)
for 25- year contract
MCL’s PPA with PLN(1
for 25- year contract
8.633 ha (Right to Use
Land)
~60 ha
~30 - 40 ha
Planted Area: 2.701
ha
Off-take (take or pay)
by PLN for 25 years
Off-take (take or pay)
by PLN for 25 years
Plantation permit of PT
Perkebunan Kaltim
Utama I (PKU) expires
in 2036
IUP-P for downstream
processing
Note:
1. PLN: PT Perusahaan Listrik
Negara (Persero)
6
Strategic Mine Locations
Major
City
Jetty
Samarinda
Transhipment
Point
TMU – IM
Hauling Road
Muara Berau
Major city to north
is less than 50 km
Distance from pit to
jetty. with closest one
~5 km and furthest
~25 km
IM
25 km
TMU
ABN
~55 km
(total ~120 km)
~5 km
IM jetty
ABN jetty
Close proximity to
jetty and
transhipment
point of Muara
Jawa
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 Capacity : 6 Mn
Tons/Annum (TPA)
Conveyor to Jetty
Short Coal Hauling
Distance ~4km
High Built CPP Cap
up to 10 Mn TPA
Hauling Road to
Connect with ABN
TOBA’s Concessions
ROM Stockpile
Overland & Barge
Loading Jetty: Speed
of 1.800 TPH
Note: PT Adimitra Baratama Nusantara (ABN)
PT Indomining (IM)
PT Trisensa Mineral Utama (TMU)
8
Material Information
Contracts and Awards Earned in 9M17
PPA signing with
PLN for Sulut-3
Power Project
7 April
Engineering Procurement Contract
(EPC) signing with SEPC* for
Sulbagut-1 Power Project
2 May
7 July
11 July
Special Transaction Loan Facility
and Non-Cash Loan of US$ 50
mn with Bank Mandiri
Financing Date with
PLN for Sulbagut-1
Power Project
14 July
Project Financing Signing with
Bank Mandiri worth US$ 171.8 mn
for Sulbagut-1 Power Project
* Shanghai Electric Power Construction Co. Ltd.
ABN received Award from Customs
Office of East Kalimantan as “Ideal”
Company
TMU received Pratama Award from
Ministry of Energy. Mines. &
Resoucres (MEMR)
ABN received Gold PROPER
Enviromental Award from Provincial
Govt for 3 consecutive years
IM and TMU received Green PROPER
Enviromental Award for 2 consecutive
years
IM received certificates for ISO 14001.
OHSAS 18001 and ISO 9001
9
2
Performance Highlights
10
Production Profile
Amidst coal price volatility over the past several years and to sustain the Company’s survival mode, Toba
has undergone cost efficiency initiatives as shown by stable EBITDA margin
Toba Consolidated
30.1%
10
9
8
7
6
5
4
3
2
1
0
EBITDA Margin
NEWC Price
32.9%
13.9%
13.5%
15.4%
15.2%
5.7%
Stable
margin
140
8.1 Mt
$99
$121
5.2 Mt
$97
6.5 Mt
5.6 Mt
120
6.1 Mt
$71
5.5 Mt
$85
4.1 Mt
$66
5.0-6.0 Mt
100
80
$65-70
60
$59
40
20
0
2010
2011
2012
2013
2014
2015
2016
2017 est.
11
Source: Coal price from GlobalCoal
Operational Performance
Quarterly Production & SR
Production in Thousand Tons
12.8x
1.4
13.7x
12.6x
14.3x
12.6x
1.4
1.4
1.2
1.1
12.0x - 13.0x
1.25 - 1.50
Q-o-q production volume has
remained stable and in line with
2017 quarterly guidance of 1.25 1.50 mn tons
3Q17 SR stabilized at 12.6x, on
track of achieving annual SR
guidance of 12x - 13x
3Q16
4Q16
TMU
1Q17
IM
2Q17
ABN
3Q17
SR (Consolidated)
Quarterly
Guidance
Higher SR in 2Q17 impacted by wet
weather
Production Summary
MT: Million Tons
Ton
Change
3Q16
3Q17
Production
Volume
1.4
1.4
(0.0)%
Sales Volume
1.2
1.3
9.8%
12.8
12.6
(1.4)%
SR (x)
Comment
Production volume in 3Q17 was still in line with target
Sales volume tracked its 3Q17 production volume
SR in 3Q17 was still in line with target
12
Realization
Consolidated 9M 2017
“Sustainability & Resilience”
Operational
Focused on profitable production output
through optimization of :
•
Infrastructure and connectivity sharing
NEWC Index
ASP
Production Vol
Sales Vol
Stripping Ratio
US$/ton
US$/ton
mn ton
mn ton
x
(hauling road and coal processing plant)
Δ%
9M16
9M17
56.4
44.8
85.2
59.2
3.7
51.1 %
32.1 %
(11.9)%
3.5
13.5
(18.6)%
3.8 %
9M16
9M17
Δ%
4.2
4.3
13.0
•
Joint mine plan
Financial
•
Coal sale pricing driven by relationship.
Sales
US$ mn
192.1
211.3
10.0 %
consistency in scheduled delivery and
EBITDA
US$ mn
27.0
51.9
92.2 %
product quality
Net Profit
US$ mn
9.7
29.0
EBITDA/Ton
US$/ton
6.3
14.7
199.0 %
133.3 %
Financial Ratios
9M16
9M17
Gross Profit Margin
19.2%
29.9%
EBITDA Margin
14.1%
24.6%
•
Well-diversified
market
destinations
and customer base
Note:
(1) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
13
Evolution of FOB Cash Cost
Quarterly FOB Cash Cost
In US$/ton
120
13.8x
13.8x
12.5x
12.4x
12.5x
100
12.0x
12.1x
13.7x
12.8x
12.5x
12.6x
12.6x
12x
81.5
94.7
80
15x
14.3x
68.4
63.8
59.6
9x
59.0
52.6
50.3
51.5
6x
51
50
94.5
67.3
65.8
60
40
79.7
46
42
41
38
35
34
35
42
37
34
41
3x
20
51
50
47
43
41
38
35
35
35
34
37
40
41
0x
0
3Q14
4Q14
1Q15
2Q15
3Q15
FOB cash cost
4Q15
1Q16
2Q16
Adj. FOB cash cost
3Q16
NEWC
4Q16
1Q17
2Q17
3Q17
SR
Despite fluctuation in NEWC price, TOBA has maintained relatively stable SR and cash cost
through proper mine planning and cost management initiatives
Although cash cost rose 17.1% from 2Q16 to 3Q17, coal price increased much higher by 83.3%
over same period. This reflects much higher ASP expansion than cash cost rise itself
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
14
ASP Positively Impacts Margins
Sales, Cost of Goods Sold and Gross Profit
Margin (US$ million and %)
Sales Volume, NEWC Index & ASP
(million tons and US$/ton)
85.2
29.9%
4.8
Sales
Volume
4.3
3.5
61.4
NEWC Index
56.4
268.6
Cost of Goods
Sold
217.0
Gross Profit
Margin
ASP
19.2%
59.2
55.9
9M15
9M16
19.2%
211.3
148.0
192.1
44.8
Sales
155.3
9M17
9M15
9M16
9M17
EBITDA/ton and EBITDA Margin
(US$/ton and %)
24.6%
Increase in ASP per ton directly filters through
higher gross profit margin and EBITDA margin
15.6%
14.1%
EBITDA/ton
14.7
8.8
9M15
EBITDA Margin
6.3
9M16
9M17
15
Balance Sheet
Consolidated Balance Sheet
Net Debt to EBITDA
In Thousand US$
In Million US$
Balance Sheet
Dec’ 16
Sep’ 17
Change
37.6
42.6
13.3 %
261.6
297.1
13.6 %
70.0
64.1
60.0
Cash and Cash Equivalent
50.0
Total Assets
51.3
64.2
25.1 %
113.8
135.5
19.1 %
30.0
Total Liabilities
23.3
21.6
20.0
Shareholders Equity
147.7
161.6
39.2
38.8
40.0
Interest Bearing Debt
45.8
45.1
13.7
9.4 %
10.8
11.8
10.0
0.0
3Q16
4Q16
1Q17
Net Debt (Cash) (US$ Mn)
Ratio (x)
0.6
0.4
2Q17
3Q17
Last 12 Month EBITDA
0.2
0.3
0.3
Total assets and total liabilities rose similarly mostly due to rise in interest bearing debt from :
Bank Mandiri, for refinancing syndicated loan, investment and corporate purposes where US$ 40
mn of total proceeds was used by June 2017
Citibank, amounting to US$ 4 mn, used for ABN’s working capital and general corporate purposes
Total equity value improved due to current earnings over the period
Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at < 0.5x
16
Marketing Performance
Traders
End-users
75%
71%
63%
NEWC - Adj.
5,600 GAR
ASP
37%
29%
2015
2016
25%
HBA - Adj.
5,600 GAR
9M17
Prior to 2016, spread between NEWC and ASP narrowed due to optimizing marketing initiative at
mainly fixed price to premium customers in Japan, Korea, Taiwan, and Malaysia
Majority of 2016 sales volume was fixed at price during 1H16 period. Sudden coal price surge in
2H16 beyond market prediction was not reflected in the 2016 ASP, causing widened spread between
NEWC and ASP
Throughout 9M17, spread between NEWC and ASP narrowed due to large portion of sales volume
being fixed during price uptrend in 3Q17 and not capturing the high of 4Q16
17
Diversified Export Market Base
Export Market Focus 9M15 – 9M17
9M17 Export Market - More ASEAN Driven
Million Tons
China
Korea
Thailand
Taiwan
Malaysia
34%
29%
25%
20%
10%
13%12%
3%
9M15
13% 12%
8%
13%
12%
8%
5%
9M16
0.0
South Korea
Thailand
Malaysia
Taiwan
China
Japan
India
Vietnam
Hong Kong
Philippines
Others
0.2
0.4
0.6
0.8
1.0
28.7%
19.7%
13.5%
11.7%
8.3%
4.4%
3.8%
3.0%
2.6%
2.5%
1.8%
9M17
Given China’s economic situation in 2015, focus shifted towards export markets whose economies
showed stable demand prospects ie. Korea, Taiwan, India. ASEAN markets ie. Thailand, Malaysia, and
Vietnam have shown positive traction
Diversification towards countries ex.China remained highlight for 2017
In 9M17 and going forward, ASEAN markets will play more important role in sourcing coal from its
proximate supplier ie. Indonesia
18
Product Composition by Quality
Product Composition (GAR) by % - 9M17
Million Tons
0.0
0.2
0.4
0.6
0.8
1.0
5600 HS
5200
Others
29%
25%
24%
7.9%
18%
15%
16%
12%
12%
4.4%
2.6%
25%
25%
22%
15.8%
5800
4%
0%
9M15
5800 & 5900 LS
37%36%
21.5%
5600 RS
5600 RS
22.9%
5200
Others
5600 HS
24.9%
4800 & 5000
5900 LS
Product Composition (GAR) : 9M15 – 9M17
9M16
9M17
From 9M15 to 9M17, sales constribution consistently derived from mainly 5600 GAR products
A mixture of mid-upper quality of 5600 - 5900 GAR still account for TOBA’s largest product
composition
19
Snapshot of 2017F
2015
2016
2017 F
59.2
66.0
65 - 70
Prod Vol (mn ton)
6.1
5.5
5.0 - 6.0
SR (x)
12.3x
12.9x
12.0x - 13.0x
NEWC Coal Price (US$/ton)
Operation
Mine Plan Execution
2017 production and SR are targeted similar to those in 2016 of 5 - 6 million tons and
12.0x – 13.0x respectively
Marketing Strategy
The Company continues managing well-diversified market destinations and customer
base, maintaining product quality and timely delivery, as well as optimizing the current
favorable coal price into the Company’s ASP
Capital Expenditure
Total consolidated CAPEX for 2017 is estimated at US$ 55 - 60 million, of which 75% 80% will be allocated for EPC phase of the power project (Sulbagut-1), with the balance
for the mining business, i.e. land acquisition, and infrastructure/heavy equipment
Sourcing of Other Power Projects
In translating the Company’s vision, the Company will continuously seek for opportunities
in sourcing new power projects (fossil fuel and non fossil fuel based such as renewables)
through participation in IPP tenders as well as through acquisition of existing power
assets
Exploration
12%
Power
32%
Building,
Infrastructure,
Heavy Equip
56%
Realized CAPEX 9M17
20
3
Performance Highlights
2Strategy
Performance
to Venture Highlights
into Power
21
Business Growth and Sustainabiity
Present
Future
Company Initiatives
Coal Mine
Coal
Mining
Company
Transformation
Company Strategy
•
•
•
•
Optimization of existing mine plan
Optimization of infrastructure sharing
Cost management
Diversification of markets and
customer base
• Active participation in CSR
* Independent Power Producer
Integrated
Energy
Company
• Acquisition of mine(s)
around existing mining
concessions
• Acquisition of mine(s)
to support coal-related
power projects
Fossil Fuel and
Renewables Power
• Active participation as
IPP* in PLN tenders
• Assessment of
developing renewables
• Identification of
strategic partner with
vast track record
• Expansion of power
project capacity (MW)
22
Why Toba Can Realize this Goal?
Substantial
Power-Related
Milestones
Have Been
Achieved
Leveraging
Toba Sejahtra
Group’s
experience
Experienced
Partners with
Proven Track
Record
Extensive experience in executing project from greenfield to brownfield in
coal mining, CFPP and gas-fired power plant development and operation
Sulbagut-1 CFPP project (2x50 MW) – Financial close was reached on 14
July 2017, the first reached on schedule this year by any IPP. Expected
COD in mid 2020
Second 2x50 MW Sulut-3 CFPP project was signed on 7 April 2017 with
expected COD in 2020
Currently, Toba Sejahtra (Toba’s Shareholder) has one operating power
plant asset: 2 x 41 MW Senipah Gas Power Plant, COD in 1Q-2015; and
previously 2 x 15 MW Palu CFPP; reached COD in 2007 (already divested
in 4Q16)
Possessing vast learning curve of knowing what to and not to do in
planning to execution of project management. This enables Toba to
mitigate and minimize project risk
Our partners for the projects are well established and vastly experienced
in construction and operation of power plants in many countries
Having strong partners enable us to de-risk the construction phase of
the projects
23
Our Project Selection Process
Parameters for Project Selection
Targeting return of equity IRR and Project IRR
Ability to identify, assess, and manage completion risk, technical and non-technical risk such as
social assessment for land acquisition to ensure the project can be completed within specified time
schedule
Financial capability to participate in targeted tender projects where PLN sets specific requirements
to meet
Majority control for certain size of IPP projects
Appetite to have minority portion with good and credible partner in larger size projects
Parameters for Partner Selection
•
Credible partner with vast experience and proven technology
•
Can bring long-term value-add to organization and local people including transfer knowledge
•
Have good networking capability with PLN and power stakeholders
24
Leveraging Toba Sejahtra Group’s
Experience in Power Plant Development
In operation, COD in Q1
2015
Combined Cycle
System is under PPA
finalization for additional
35 MW
Total potential supply:
115 MW
NEW PROJECTS
(Expected COD in 2020)
PLTG Senipah
2 x 41 MW
SULBAGUT-1
2 x 50 MW
SULUT-3
2 x 50 MW
Financial Close: 14
July 2017, the first
reached on schedule
this year by any IPP
PPA in place, in
process for
Commencement of
Work
East Kalimantan
Senipah Power Plant
Malaysia
Kalimantan
Sulawesi
Sumatra
Central Sulawesi
Palu Power Plant
Java
In operation, COD in
2007
Expansion 2x18 MW is
COD 2016
Total potential supply:
66 MW
PJPP *)
2x15 + 2x18 MW
* Dviested to private buyer in 4Q 2016
25
i
Sulbagut-1 Project
General Description of Sulbagut-1 Project
Capacity
(Nett)
• 2 x 50 MW
Contract
Scheme
• Build-OwnOperate-Transfer
(BOOT)
Contract
Period
• 25 Years
COD
Target
• MiD 2020
EPC
• SEPC
Project
Value
• US$ 210-220
million
Project Location : North
Gorontalo Regency,
Sulawesi
Sulbagut-1 Coal-Fired Power Project is part of 35 GW Program
27
Financial Close of Sulbagut-1 Project
Principle License
Achievement of
Financing Date with
PLN, 14 July 2017
Tariff Approval
Land Acquisition
EPC Contract
Financing Agreement
Financal Close
Reception
attended by
BoD of PLN
28
Next after Financial Close...
2017
2019
2018
2020
Site
Preparation
Construction
Commissioning
Commercial
Operation
Date (COD)
29
ii
Sulut-3 Project
General Description of Sulut-3 Project
Net
Capacity
• 2 x 50 MW
Contract
Scheme
• Build-OwnOperate-Transfer
(BOOT)
Contract
Period
• 25 Years
COD
Target
• 33 months post
Commencement
of Work
Project
Value
• US$ 205-215
million
Project Location : North
Minahasa Regency,
Sulawesi
Sulut-3 Coal-Fired Power Project is part of 35 GW Program
31
Signing of PPA for Sulut-3 Project
PPA signing for Sulut -3 Project
7 April 2017
Handing of Token of Appreciation to
PLN, 7 April 2017
32
THANK YOU
PT Toba Bara Sejahtra Tbk (TOBA)
Company
CompanyPresentation
Presentation
April 2017 1
September 2017
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra Tbk (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
Company Profile
2
Performance Highlights
3
Strategy to Venture into Power
i
Sulbagut-1 Project
ii
Sulut-3 Project
3
2
Performance Highlights
Performance
Highlights
Company
Profile
1
4
PT Toba Bara Sejahtra Tbk in Brief
Coal Mining
Palm Oil Plantation & Mill
East Kalimantan
Kalimanta
n
Location:
Kutai
Kalimantan Timur
Kartanegara,
Hak Guna Usaha (HGU) covers
8.633 ha. where 2.701 ha has
been planted
Location: Kutai Kartanegara,
Kalimantan Timur
Power Generation
Total Concession: 7.087 ha
Gorontalo
North Sulawesi
GLP and MCL established in February 2016 and
March 2017 respectively for development of steam
(coal) fired power plant project (CFPP) with capacity of
2x50 MW each
25 year Power Purchase Agreement (PPA) through
Independent Power Producer (IPP) scheme with PLN
as single offtaker
5
Ownership Structure
Highland Strategic
Holdings Pte. Ltd.
Davit Togar
Pandjaitan
PT Toba Sejahtra
61.91%
10.00%
PT Bara Makmur
Abadi
6.25%
0.75%
PT Sinergi Sukses
Utama
Roby Budi Prakoso
3.64%
5.10%
Public *)
12.35%
*) Incl. Baring Private Equity
as anchor investor
99.60%
99.99%
PT Toba Bumi Energi
(䇾TBE䇿)
99.99%
51.00%
License
Area
Reserve
20-year Production
Operation Mining Permit
(IUP-OP) expiring in
December 2029
2.990 ha
Reserves: 117 MT - JORC
Resources: 156 MT - JORC
IUP-OP extension was
completed in March
2013 (First out of 2
extensions: in 2023.
with tenor of 10 years
each)
683 ha
Reserve: 22 MT - JORC
Resources: 37 MT - JORC
99.99%
13-year IUP-OP expires
in December 2023
3.414 ha
Reserves : 8 MT - JORC
Resources: 43 MT - JORC
60.00%
90.00%
90.00%
GLP’s PPA with PLN(1)
for 25- year contract
MCL’s PPA with PLN(1
for 25- year contract
8.633 ha (Right to Use
Land)
~60 ha
~30 - 40 ha
Planted Area: 2.701
ha
Off-take (take or pay)
by PLN for 25 years
Off-take (take or pay)
by PLN for 25 years
Plantation permit of PT
Perkebunan Kaltim
Utama I (PKU) expires
in 2036
IUP-P for downstream
processing
Note:
1. PLN: PT Perusahaan Listrik
Negara (Persero)
6
Strategic Mine Locations
Major
City
Jetty
Samarinda
Transhipment
Point
TMU – IM
Hauling Road
Muara Berau
Major city to north
is less than 50 km
Distance from pit to
jetty. with closest one
~5 km and furthest
~25 km
IM
25 km
TMU
ABN
~55 km
(total ~120 km)
~5 km
IM jetty
ABN jetty
Close proximity to
jetty and
transhipment
point of Muara
Jawa
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 Capacity : 6 Mn
Tons/Annum (TPA)
Conveyor to Jetty
Short Coal Hauling
Distance ~4km
High Built CPP Cap
up to 10 Mn TPA
Hauling Road to
Connect with ABN
TOBA’s Concessions
ROM Stockpile
Overland & Barge
Loading Jetty: Speed
of 1.800 TPH
Note: PT Adimitra Baratama Nusantara (ABN)
PT Indomining (IM)
PT Trisensa Mineral Utama (TMU)
8
Material Information
Contracts and Awards Earned in 9M17
PPA signing with
PLN for Sulut-3
Power Project
7 April
Engineering Procurement Contract
(EPC) signing with SEPC* for
Sulbagut-1 Power Project
2 May
7 July
11 July
Special Transaction Loan Facility
and Non-Cash Loan of US$ 50
mn with Bank Mandiri
Financing Date with
PLN for Sulbagut-1
Power Project
14 July
Project Financing Signing with
Bank Mandiri worth US$ 171.8 mn
for Sulbagut-1 Power Project
* Shanghai Electric Power Construction Co. Ltd.
ABN received Award from Customs
Office of East Kalimantan as “Ideal”
Company
TMU received Pratama Award from
Ministry of Energy. Mines. &
Resoucres (MEMR)
ABN received Gold PROPER
Enviromental Award from Provincial
Govt for 3 consecutive years
IM and TMU received Green PROPER
Enviromental Award for 2 consecutive
years
IM received certificates for ISO 14001.
OHSAS 18001 and ISO 9001
9
2
Performance Highlights
10
Production Profile
Amidst coal price volatility over the past several years and to sustain the Company’s survival mode, Toba
has undergone cost efficiency initiatives as shown by stable EBITDA margin
Toba Consolidated
30.1%
10
9
8
7
6
5
4
3
2
1
0
EBITDA Margin
NEWC Price
32.9%
13.9%
13.5%
15.4%
15.2%
5.7%
Stable
margin
140
8.1 Mt
$99
$121
5.2 Mt
$97
6.5 Mt
5.6 Mt
120
6.1 Mt
$71
5.5 Mt
$85
4.1 Mt
$66
5.0-6.0 Mt
100
80
$65-70
60
$59
40
20
0
2010
2011
2012
2013
2014
2015
2016
2017 est.
11
Source: Coal price from GlobalCoal
Operational Performance
Quarterly Production & SR
Production in Thousand Tons
12.8x
1.4
13.7x
12.6x
14.3x
12.6x
1.4
1.4
1.2
1.1
12.0x - 13.0x
1.25 - 1.50
Q-o-q production volume has
remained stable and in line with
2017 quarterly guidance of 1.25 1.50 mn tons
3Q17 SR stabilized at 12.6x, on
track of achieving annual SR
guidance of 12x - 13x
3Q16
4Q16
TMU
1Q17
IM
2Q17
ABN
3Q17
SR (Consolidated)
Quarterly
Guidance
Higher SR in 2Q17 impacted by wet
weather
Production Summary
MT: Million Tons
Ton
Change
3Q16
3Q17
Production
Volume
1.4
1.4
(0.0)%
Sales Volume
1.2
1.3
9.8%
12.8
12.6
(1.4)%
SR (x)
Comment
Production volume in 3Q17 was still in line with target
Sales volume tracked its 3Q17 production volume
SR in 3Q17 was still in line with target
12
Realization
Consolidated 9M 2017
“Sustainability & Resilience”
Operational
Focused on profitable production output
through optimization of :
•
Infrastructure and connectivity sharing
NEWC Index
ASP
Production Vol
Sales Vol
Stripping Ratio
US$/ton
US$/ton
mn ton
mn ton
x
(hauling road and coal processing plant)
Δ%
9M16
9M17
56.4
44.8
85.2
59.2
3.7
51.1 %
32.1 %
(11.9)%
3.5
13.5
(18.6)%
3.8 %
9M16
9M17
Δ%
4.2
4.3
13.0
•
Joint mine plan
Financial
•
Coal sale pricing driven by relationship.
Sales
US$ mn
192.1
211.3
10.0 %
consistency in scheduled delivery and
EBITDA
US$ mn
27.0
51.9
92.2 %
product quality
Net Profit
US$ mn
9.7
29.0
EBITDA/Ton
US$/ton
6.3
14.7
199.0 %
133.3 %
Financial Ratios
9M16
9M17
Gross Profit Margin
19.2%
29.9%
EBITDA Margin
14.1%
24.6%
•
Well-diversified
market
destinations
and customer base
Note:
(1) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
13
Evolution of FOB Cash Cost
Quarterly FOB Cash Cost
In US$/ton
120
13.8x
13.8x
12.5x
12.4x
12.5x
100
12.0x
12.1x
13.7x
12.8x
12.5x
12.6x
12.6x
12x
81.5
94.7
80
15x
14.3x
68.4
63.8
59.6
9x
59.0
52.6
50.3
51.5
6x
51
50
94.5
67.3
65.8
60
40
79.7
46
42
41
38
35
34
35
42
37
34
41
3x
20
51
50
47
43
41
38
35
35
35
34
37
40
41
0x
0
3Q14
4Q14
1Q15
2Q15
3Q15
FOB cash cost
4Q15
1Q16
2Q16
Adj. FOB cash cost
3Q16
NEWC
4Q16
1Q17
2Q17
3Q17
SR
Despite fluctuation in NEWC price, TOBA has maintained relatively stable SR and cash cost
through proper mine planning and cost management initiatives
Although cash cost rose 17.1% from 2Q16 to 3Q17, coal price increased much higher by 83.3%
over same period. This reflects much higher ASP expansion than cash cost rise itself
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
14
ASP Positively Impacts Margins
Sales, Cost of Goods Sold and Gross Profit
Margin (US$ million and %)
Sales Volume, NEWC Index & ASP
(million tons and US$/ton)
85.2
29.9%
4.8
Sales
Volume
4.3
3.5
61.4
NEWC Index
56.4
268.6
Cost of Goods
Sold
217.0
Gross Profit
Margin
ASP
19.2%
59.2
55.9
9M15
9M16
19.2%
211.3
148.0
192.1
44.8
Sales
155.3
9M17
9M15
9M16
9M17
EBITDA/ton and EBITDA Margin
(US$/ton and %)
24.6%
Increase in ASP per ton directly filters through
higher gross profit margin and EBITDA margin
15.6%
14.1%
EBITDA/ton
14.7
8.8
9M15
EBITDA Margin
6.3
9M16
9M17
15
Balance Sheet
Consolidated Balance Sheet
Net Debt to EBITDA
In Thousand US$
In Million US$
Balance Sheet
Dec’ 16
Sep’ 17
Change
37.6
42.6
13.3 %
261.6
297.1
13.6 %
70.0
64.1
60.0
Cash and Cash Equivalent
50.0
Total Assets
51.3
64.2
25.1 %
113.8
135.5
19.1 %
30.0
Total Liabilities
23.3
21.6
20.0
Shareholders Equity
147.7
161.6
39.2
38.8
40.0
Interest Bearing Debt
45.8
45.1
13.7
9.4 %
10.8
11.8
10.0
0.0
3Q16
4Q16
1Q17
Net Debt (Cash) (US$ Mn)
Ratio (x)
0.6
0.4
2Q17
3Q17
Last 12 Month EBITDA
0.2
0.3
0.3
Total assets and total liabilities rose similarly mostly due to rise in interest bearing debt from :
Bank Mandiri, for refinancing syndicated loan, investment and corporate purposes where US$ 40
mn of total proceeds was used by June 2017
Citibank, amounting to US$ 4 mn, used for ABN’s working capital and general corporate purposes
Total equity value improved due to current earnings over the period
Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at < 0.5x
16
Marketing Performance
Traders
End-users
75%
71%
63%
NEWC - Adj.
5,600 GAR
ASP
37%
29%
2015
2016
25%
HBA - Adj.
5,600 GAR
9M17
Prior to 2016, spread between NEWC and ASP narrowed due to optimizing marketing initiative at
mainly fixed price to premium customers in Japan, Korea, Taiwan, and Malaysia
Majority of 2016 sales volume was fixed at price during 1H16 period. Sudden coal price surge in
2H16 beyond market prediction was not reflected in the 2016 ASP, causing widened spread between
NEWC and ASP
Throughout 9M17, spread between NEWC and ASP narrowed due to large portion of sales volume
being fixed during price uptrend in 3Q17 and not capturing the high of 4Q16
17
Diversified Export Market Base
Export Market Focus 9M15 – 9M17
9M17 Export Market - More ASEAN Driven
Million Tons
China
Korea
Thailand
Taiwan
Malaysia
34%
29%
25%
20%
10%
13%12%
3%
9M15
13% 12%
8%
13%
12%
8%
5%
9M16
0.0
South Korea
Thailand
Malaysia
Taiwan
China
Japan
India
Vietnam
Hong Kong
Philippines
Others
0.2
0.4
0.6
0.8
1.0
28.7%
19.7%
13.5%
11.7%
8.3%
4.4%
3.8%
3.0%
2.6%
2.5%
1.8%
9M17
Given China’s economic situation in 2015, focus shifted towards export markets whose economies
showed stable demand prospects ie. Korea, Taiwan, India. ASEAN markets ie. Thailand, Malaysia, and
Vietnam have shown positive traction
Diversification towards countries ex.China remained highlight for 2017
In 9M17 and going forward, ASEAN markets will play more important role in sourcing coal from its
proximate supplier ie. Indonesia
18
Product Composition by Quality
Product Composition (GAR) by % - 9M17
Million Tons
0.0
0.2
0.4
0.6
0.8
1.0
5600 HS
5200
Others
29%
25%
24%
7.9%
18%
15%
16%
12%
12%
4.4%
2.6%
25%
25%
22%
15.8%
5800
4%
0%
9M15
5800 & 5900 LS
37%36%
21.5%
5600 RS
5600 RS
22.9%
5200
Others
5600 HS
24.9%
4800 & 5000
5900 LS
Product Composition (GAR) : 9M15 – 9M17
9M16
9M17
From 9M15 to 9M17, sales constribution consistently derived from mainly 5600 GAR products
A mixture of mid-upper quality of 5600 - 5900 GAR still account for TOBA’s largest product
composition
19
Snapshot of 2017F
2015
2016
2017 F
59.2
66.0
65 - 70
Prod Vol (mn ton)
6.1
5.5
5.0 - 6.0
SR (x)
12.3x
12.9x
12.0x - 13.0x
NEWC Coal Price (US$/ton)
Operation
Mine Plan Execution
2017 production and SR are targeted similar to those in 2016 of 5 - 6 million tons and
12.0x – 13.0x respectively
Marketing Strategy
The Company continues managing well-diversified market destinations and customer
base, maintaining product quality and timely delivery, as well as optimizing the current
favorable coal price into the Company’s ASP
Capital Expenditure
Total consolidated CAPEX for 2017 is estimated at US$ 55 - 60 million, of which 75% 80% will be allocated for EPC phase of the power project (Sulbagut-1), with the balance
for the mining business, i.e. land acquisition, and infrastructure/heavy equipment
Sourcing of Other Power Projects
In translating the Company’s vision, the Company will continuously seek for opportunities
in sourcing new power projects (fossil fuel and non fossil fuel based such as renewables)
through participation in IPP tenders as well as through acquisition of existing power
assets
Exploration
12%
Power
32%
Building,
Infrastructure,
Heavy Equip
56%
Realized CAPEX 9M17
20
3
Performance Highlights
2Strategy
Performance
to Venture Highlights
into Power
21
Business Growth and Sustainabiity
Present
Future
Company Initiatives
Coal Mine
Coal
Mining
Company
Transformation
Company Strategy
•
•
•
•
Optimization of existing mine plan
Optimization of infrastructure sharing
Cost management
Diversification of markets and
customer base
• Active participation in CSR
* Independent Power Producer
Integrated
Energy
Company
• Acquisition of mine(s)
around existing mining
concessions
• Acquisition of mine(s)
to support coal-related
power projects
Fossil Fuel and
Renewables Power
• Active participation as
IPP* in PLN tenders
• Assessment of
developing renewables
• Identification of
strategic partner with
vast track record
• Expansion of power
project capacity (MW)
22
Why Toba Can Realize this Goal?
Substantial
Power-Related
Milestones
Have Been
Achieved
Leveraging
Toba Sejahtra
Group’s
experience
Experienced
Partners with
Proven Track
Record
Extensive experience in executing project from greenfield to brownfield in
coal mining, CFPP and gas-fired power plant development and operation
Sulbagut-1 CFPP project (2x50 MW) – Financial close was reached on 14
July 2017, the first reached on schedule this year by any IPP. Expected
COD in mid 2020
Second 2x50 MW Sulut-3 CFPP project was signed on 7 April 2017 with
expected COD in 2020
Currently, Toba Sejahtra (Toba’s Shareholder) has one operating power
plant asset: 2 x 41 MW Senipah Gas Power Plant, COD in 1Q-2015; and
previously 2 x 15 MW Palu CFPP; reached COD in 2007 (already divested
in 4Q16)
Possessing vast learning curve of knowing what to and not to do in
planning to execution of project management. This enables Toba to
mitigate and minimize project risk
Our partners for the projects are well established and vastly experienced
in construction and operation of power plants in many countries
Having strong partners enable us to de-risk the construction phase of
the projects
23
Our Project Selection Process
Parameters for Project Selection
Targeting return of equity IRR and Project IRR
Ability to identify, assess, and manage completion risk, technical and non-technical risk such as
social assessment for land acquisition to ensure the project can be completed within specified time
schedule
Financial capability to participate in targeted tender projects where PLN sets specific requirements
to meet
Majority control for certain size of IPP projects
Appetite to have minority portion with good and credible partner in larger size projects
Parameters for Partner Selection
•
Credible partner with vast experience and proven technology
•
Can bring long-term value-add to organization and local people including transfer knowledge
•
Have good networking capability with PLN and power stakeholders
24
Leveraging Toba Sejahtra Group’s
Experience in Power Plant Development
In operation, COD in Q1
2015
Combined Cycle
System is under PPA
finalization for additional
35 MW
Total potential supply:
115 MW
NEW PROJECTS
(Expected COD in 2020)
PLTG Senipah
2 x 41 MW
SULBAGUT-1
2 x 50 MW
SULUT-3
2 x 50 MW
Financial Close: 14
July 2017, the first
reached on schedule
this year by any IPP
PPA in place, in
process for
Commencement of
Work
East Kalimantan
Senipah Power Plant
Malaysia
Kalimantan
Sulawesi
Sumatra
Central Sulawesi
Palu Power Plant
Java
In operation, COD in
2007
Expansion 2x18 MW is
COD 2016
Total potential supply:
66 MW
PJPP *)
2x15 + 2x18 MW
* Dviested to private buyer in 4Q 2016
25
i
Sulbagut-1 Project
General Description of Sulbagut-1 Project
Capacity
(Nett)
• 2 x 50 MW
Contract
Scheme
• Build-OwnOperate-Transfer
(BOOT)
Contract
Period
• 25 Years
COD
Target
• MiD 2020
EPC
• SEPC
Project
Value
• US$ 210-220
million
Project Location : North
Gorontalo Regency,
Sulawesi
Sulbagut-1 Coal-Fired Power Project is part of 35 GW Program
27
Financial Close of Sulbagut-1 Project
Principle License
Achievement of
Financing Date with
PLN, 14 July 2017
Tariff Approval
Land Acquisition
EPC Contract
Financing Agreement
Financal Close
Reception
attended by
BoD of PLN
28
Next after Financial Close...
2017
2019
2018
2020
Site
Preparation
Construction
Commissioning
Commercial
Operation
Date (COD)
29
ii
Sulut-3 Project
General Description of Sulut-3 Project
Net
Capacity
• 2 x 50 MW
Contract
Scheme
• Build-OwnOperate-Transfer
(BOOT)
Contract
Period
• 25 Years
COD
Target
• 33 months post
Commencement
of Work
Project
Value
• US$ 205-215
million
Project Location : North
Minahasa Regency,
Sulawesi
Sulut-3 Coal-Fired Power Project is part of 35 GW Program
31
Signing of PPA for Sulut-3 Project
PPA signing for Sulut -3 Project
7 April 2017
Handing of Token of Appreciation to
PLN, 7 April 2017
32
THANK YOU