20140328 toba mdna full year 2013 english version
Management Discussion & Analysis 2013
PT Toba Bara Sejahtra Tbk and Subsidiaries
December 2013
1
SUMMARY
The global coal prices throughout 2013 demonstrated further weakness compared to those of 2012 as they were
overshadowed by factors causing supply and demand imbalance. Such imbalance included among others China‟s
slowdown due to soft demand and India‟s drastic currency depreciation against the US$ on the demand side, and
ongoing output growth by the major producers on the supply side. This was reflected in the performance of the
yearly average NEWC Index reference price as it decreased from US$ 96.9/ton in 2012 to US$ 85.3/ton in 2013, a
12.0% year on year (y-o-y) decrease, while touching its low at US$ 78.0/ton in 3Q13.
Despite the coal industry‟s continued challenging times, PT Toba Bara Sejahtra Tbk (“the Company”) took
advantage of the opportunity to enter into a period of “efficiency and consolidation” as it identified numerous ways
to further streamline operational process as well as to do away with overlapping and unnecessary costs related to
its three adjacent mines.
Thanks to the Company‟s three concessions located next to each other, the Company was able to maximize cost
efficiency initiatives through joint mine plan and infrastructure sharing. As a tangible result of this set of initiatives,
the Company successfully boosted production volume and sales volume by 16.8% to 6.5 million tons and 15.2% to
6.3 million tons y-o-y in 2013 respectively.The total production volume of 6.5 million tons in 2013 proved to be an
achievement as the Company surpassed its own 2013 internal guidance of 5.8 – 6.4 million tons. In 4Q13 alone,
the Company booked the highest quarterly production volume throughout its corporate history at 1.9 million tons.
Given this production milestone, the Company is confident it can maintain its quarterly production run rate in the
upcoming years.
Financially, the Company also successfully increased its sales by 6.3% y-o-y from 2012 to 2013. Despite a 12.0%
decrease in the NEWC Index price, the Company posted a decline of only 7.8% in its average selling price (ASP)
over the same period. On the cost side, the Company lowered its FOB vessel cash cost by 15.5% over the same
period. Hence, a combination of stronger sales efforts through higher sales volume backed by higher quality buyers
and lower overall costs resulted in a substantial 160.7% y-o-y higher EBITDA at US$ 58.6 million. This, in turn,
translated to a more favorable comprehensive income of US$ 36.1 million for 2013, or up by 201.1% from the
previous year.
Special Note: The following discussion on the Company’s performance is based on the Consolidated Financial Statements as
st
per 31 December 2013 (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 grew 16.8% y-o-y from 5.6 million tons in 2012 to 6.5 million tons in 2013
on the back of significantly higher volume contributions from TMU and IM. The production volume of 6.5 million tons
in 2013 derived from all three operating subsidiaries with the following respective contributions: 4.2 million tons from
ABN, 1.4 million tons from IM, and 0.9 million tons from TMU. The Company‟s y-o-y production growth of 16.8%
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. IM and TMU, the Company‟s main volume contributors in
2013, posted production volume growth of around 40% and 200% y-o-y respectively.
Changes in Production and Stripping Ratio (SR) at ABN, IM and TMU
ABN
6.0
IM
16.0x
15.3x
5.0
14.0x
14.0x
TMU
3.0
2.0
14.0x
3.0
16.0x
14.8x
14.0x
12.8x
12.8x
4.0
2.0
12.0x
11.1x
12.0x
4.4
12.0x
4.2
3.0
10.0x
1.0
1.0
1.4
10.0x
2.0
2012
-
2013
Production volume (Mn ton)
1.0
10.0x
2012
SR (x)
0.9
2012
2013
6.0x
Production volume (Mn ton)
SR (x)
8.0x
-
2013
Production volume (Mn ton)
0.3
SR (x)
In line with the strategy to lower overall costs towards preserving and maintaining better profitability margin, in 2013
the Company embarked on a series of controllable cost reduction initiatives, which included among others lowering
stripping ratio (SR) and overburden dump distance (dump distance). Typically these two cost components account
for around 65%-70% of FOB vessel cash cost.
The Company successfully reduced overall SR by 10.1% y-o-y from 14.9 x in 2012 to 13.4 x in 2013. On the other
hand, it slashed dump distance by 14.9% y-o-y from 1,794 m in 2012 to 1,527 m in 2013.
Average Production, SR, and Dump Distance
Production volume
Stripping Ratio (SR)
mtr
2,000
20x
1,800
15.1x
1,500
12.1x
12.7x
10x
1,000
1,501
1,802
5x
1Q2013
2Q2013
3Q'13
4Q'13
1,741
1,785
1,527
1,400
1,200
1,939
500
4Q 2012
1,681
1,600
14.2x
1,298
1,794
15x
12.1x
1,587
Dump distance
2,000
1,000
4Q 2012
1Q 2013
2Q 2013
3Q 2013
4Q 2013
The Company‟s ASP only decreased by 7.8% y-o-y from US$ 72.2/ton in 2012 to US$ 66.6/ton in 2013, which
compared favorably with NEWC Index price that declined 12.0% 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 at a timely manner. (When entering into a fixed-priced contract, the Company typically
would secure it in the very early part of the year during a relatively higher NEWC Index price). Meanwhile, the 2013
ASP was based on the Company‟s timely predictions during 3Q12 that coal prices would trade lower and at higher
volatility in 2013 than in 2012. As a result, the Company sold the majority of its 2013 sales volume to its quality
buyers in advance by entering into fixed-priced contracts over the end periods of 2012. This enabled the Company
to maximize its pricing structure, hence translating to a higher ASP in 2013 relative to the benchmark NEWC Index.
FINANCIALS
3
Financial and Operational Highlights
All figures are in million US$ unless
otherwise stated
2012
2013
Changes
Operational
Sales Volume
Mn ton
5.5
6.3
15.2%
Production Volume
Mn ton
5.6
6.5
16.8%
x
14.9
13.4
(10.1%)
FOB Vessel Cash Cost*
US$/ton
62.5
52.8
(15.5%)
Average Selling Price (ASP)
US$/ton
72.2
66.6
(7.8%)
2012
2013
Changes
Stripping Ratio (SR)
Financial Performance
Profit (Loss)
Revenue
US$ Mn
396.7
421.8
6.3%
Cost of Goods Sold
US$ Mn
348.5
342.3
(1.8%)
Gross Profit
US$ Mn
48.2
79.6
65.0%
EBITDA**
Total Comprehensive Income
For the Periods
US$ Mn
22.5
58.6
160.7%
US$ Mn
12.0
36.1
201.1%
Free Cash Flow***
US$ Mn
(47.3)
45.6
196.4%
Capex
US$ Mn
15.4
23.3
51.4%
2012
2013
Changes
55.9
13.9%
Balance Sheet
Interest Bearing Debt
US$ Mn
49.0
Cash and cash Equivalents
US$ Mn
36.3
63.3
74.3%
Net Debt****
US$ Mn
12.7
(7.4)
(158.5%)
Total Assets
US$ Mn
261.5
311.7
19.2%
Total Liabilities
US$ Mn
150.6
181.2
20.3%
Total Equity
US$ Mn
110.9
130.5
17.6%
Changes
Financial Ratios
Gross Profit Margin
%
12.2%
18.9%
55.2%
EBITDA Margin
%
5.7%
13.9%
145.1%
Notes:
*FOB Vessel Cash Cost = COGS including royalty and selling expense – depreciation and amortization
**EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
*** Free Cash Flow = Cash Flow from Operation – Cash flow for Capex
**** Net Debt = Interest bearing debt – cash and cash equivalents
4
PROFIT (LOSS)
SALES
Although the weak global coal prices affected the Company‟s overall ASP by 7.8% from US$ 72.2/ton in 2012 to
US$ 66.6/ton in 2013, the Company nevertheless demonstrated resilience by posting a stable 6.3% rise in revenue
from US$ 396.7 million in 2012 to US$ 421.8 million in 2013 on the back of a 15.2% increase in sales volume over
the same period.
COST OF GOODS SOLD
The 15.2% y-o-y expansion in sales volume from 2012 to 2013 coincided with lower cost of goods sold over the
same period, showing the Company‟s ability to significantly reduce FOB vessel cash cost from US$ 62.5/ton in
2012 to US$ 52.8/ton in 2013. Mining costs, such as overburden removal and dump distance as well as fuel, make
up the major cost components. Such drastic reduction in FOB vessel cash cost was the result of the Company‟s
cost efficiency initiatives of lowering SR and dump distance, hence enabling it to generate positive cash margins
thereafter.
EBITDA
EBITDA surged by a hefty 160.7% y-o-y from US$ 22.5 million in 2012 to US$ 58.6 million in 2013, resulting from
predominantly the Company‟s successful strategy in expanding its sales volume amidst the weaker ASP while
lowering mining costs in the process. Hence, a combination of the Company‟s on-going cost efficiency initiatives
and improvement in sales and marketing activity positively boosted EBITDA margin from 5.7% in 2012 to 13.9% in
2013.
COMPREHENSIVE INCOME
After subtracting tax expense of US$ 15.8 million from profit before tax for the period 2013, the Company booked
total comprehensive income (before minority interest) of US$ 36.1 million, up by a stellar 201.1% from US$ 12.0
million in 2012. This income achievement of US$ 36.1 million already factored in the combined impacts of forex
loss worth US$ 8.2 million and gain on settlement of pre-existing intercompany account in the amount of US$
7.5 million.
The forex loss was attributable to a 26.0% depreciation of the IDR against the US$ during 2013, which was mainly
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 2013, the IDR weakened by as much as 26.0% against
the US$, from IDR 9,685 in early January 2013 to IDR 12,189 as per December 2013.
5
FREE CASH FLOW
The Company‟s free cash flow experienced a significant y-o-y improvement from 2012 to 2013. In 2013, it
generated cash flow of US$ 45.6 million, a difference compared to minus US$ 47.3 million in 2012. Such an
increase was in line with the Company‟s continued improvement in performance and a more measured working
capital management.
BALANCE SHEET
ASSETS
The Company‟s assets in 2013 stood at US$ 311.7 million in 2013 or up 19.2% from US$ 261.5 million as per endDecember 2012. Such growth predominantly resulted from a build-up in cash and equivalents of US$ 27.0 million,
inventories of US$ 4.0 million, fixed assets of US$ 15.0 million, and mining properties US$ 14.3 million.
Cash and cash equivalents
Interest Bearing Debt
63
60
56
49
43
40
42
45
47
36
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Note: Figures are in Mn US$
LIABILITIES
st
Meanwhile, total liabilities rose by 20.3% y-o-y to US$ 181.2 million in 2013 from US$ 150.6 million as per 31
December 2012 and interest bearing debt expanded by 13.9% to US$ 55.9 million in 2013 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 2013 increased 17.6% to US$ 130.5 million from US$ 110.9 million as per end-2012, and this was
attributable to additional income for the period.
CAPITAL EXPENDITURE (CAPEX)
Until end of December 2013, the Company had realized total CAPEX of US$ 23.3 million, which were utilized 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. This realized CAPEX was lower than the Company‟s initial
guidance of US$ 27.0 million, mostly due to cost savings in the execution of these projects throughout the year.
6
MARKETING
During 2013, 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. 2013 was a marketing
milestone for the Company as it successfully garnered a more diversified and higher quality customer
base, expanded 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
South Korea
10%
China
43%
Taiwan
19%
India
14%
OPERATIONAL UPDATE
Initiative
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
Achievement
Construction of CPP is
in finalization stage
7
TMU
Construction and completion of hauling connected road
linkages between TMU and IM via ABN. Cost saving in the
form of lower logistics costs is expected at around US$ 56/ton
Construction of hauling
road from TMU to IM,
via
ABN
was
completed in 2Q13,
ahead of schedule
Earlier-than-expected completion of hauling road at TMU in
2Q13 enabled it to successfully ramp up production, achieving
its highest quarterly production volume of 414,000 tons in
4Q13, up by 50.5% from previous high of 275,000 tons in
3Q13
TMU Coal production (ktons)
450
414
400
350
275
300
250
200
147
150
100
88
50
Q1 2013
Q2 2013
Q3 2013
Q4 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 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.
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.
th
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
December 2013
1
SUMMARY
The global coal prices throughout 2013 demonstrated further weakness compared to those of 2012 as they were
overshadowed by factors causing supply and demand imbalance. Such imbalance included among others China‟s
slowdown due to soft demand and India‟s drastic currency depreciation against the US$ on the demand side, and
ongoing output growth by the major producers on the supply side. This was reflected in the performance of the
yearly average NEWC Index reference price as it decreased from US$ 96.9/ton in 2012 to US$ 85.3/ton in 2013, a
12.0% year on year (y-o-y) decrease, while touching its low at US$ 78.0/ton in 3Q13.
Despite the coal industry‟s continued challenging times, PT Toba Bara Sejahtra Tbk (“the Company”) took
advantage of the opportunity to enter into a period of “efficiency and consolidation” as it identified numerous ways
to further streamline operational process as well as to do away with overlapping and unnecessary costs related to
its three adjacent mines.
Thanks to the Company‟s three concessions located next to each other, the Company was able to maximize cost
efficiency initiatives through joint mine plan and infrastructure sharing. As a tangible result of this set of initiatives,
the Company successfully boosted production volume and sales volume by 16.8% to 6.5 million tons and 15.2% to
6.3 million tons y-o-y in 2013 respectively.The total production volume of 6.5 million tons in 2013 proved to be an
achievement as the Company surpassed its own 2013 internal guidance of 5.8 – 6.4 million tons. In 4Q13 alone,
the Company booked the highest quarterly production volume throughout its corporate history at 1.9 million tons.
Given this production milestone, the Company is confident it can maintain its quarterly production run rate in the
upcoming years.
Financially, the Company also successfully increased its sales by 6.3% y-o-y from 2012 to 2013. Despite a 12.0%
decrease in the NEWC Index price, the Company posted a decline of only 7.8% in its average selling price (ASP)
over the same period. On the cost side, the Company lowered its FOB vessel cash cost by 15.5% over the same
period. Hence, a combination of stronger sales efforts through higher sales volume backed by higher quality buyers
and lower overall costs resulted in a substantial 160.7% y-o-y higher EBITDA at US$ 58.6 million. This, in turn,
translated to a more favorable comprehensive income of US$ 36.1 million for 2013, or up by 201.1% from the
previous year.
Special Note: The following discussion on the Company’s performance is based on the Consolidated Financial Statements as
st
per 31 December 2013 (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 grew 16.8% y-o-y from 5.6 million tons in 2012 to 6.5 million tons in 2013
on the back of significantly higher volume contributions from TMU and IM. The production volume of 6.5 million tons
in 2013 derived from all three operating subsidiaries with the following respective contributions: 4.2 million tons from
ABN, 1.4 million tons from IM, and 0.9 million tons from TMU. The Company‟s y-o-y production growth of 16.8%
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. IM and TMU, the Company‟s main volume contributors in
2013, posted production volume growth of around 40% and 200% y-o-y respectively.
Changes in Production and Stripping Ratio (SR) at ABN, IM and TMU
ABN
6.0
IM
16.0x
15.3x
5.0
14.0x
14.0x
TMU
3.0
2.0
14.0x
3.0
16.0x
14.8x
14.0x
12.8x
12.8x
4.0
2.0
12.0x
11.1x
12.0x
4.4
12.0x
4.2
3.0
10.0x
1.0
1.0
1.4
10.0x
2.0
2012
-
2013
Production volume (Mn ton)
1.0
10.0x
2012
SR (x)
0.9
2012
2013
6.0x
Production volume (Mn ton)
SR (x)
8.0x
-
2013
Production volume (Mn ton)
0.3
SR (x)
In line with the strategy to lower overall costs towards preserving and maintaining better profitability margin, in 2013
the Company embarked on a series of controllable cost reduction initiatives, which included among others lowering
stripping ratio (SR) and overburden dump distance (dump distance). Typically these two cost components account
for around 65%-70% of FOB vessel cash cost.
The Company successfully reduced overall SR by 10.1% y-o-y from 14.9 x in 2012 to 13.4 x in 2013. On the other
hand, it slashed dump distance by 14.9% y-o-y from 1,794 m in 2012 to 1,527 m in 2013.
Average Production, SR, and Dump Distance
Production volume
Stripping Ratio (SR)
mtr
2,000
20x
1,800
15.1x
1,500
12.1x
12.7x
10x
1,000
1,501
1,802
5x
1Q2013
2Q2013
3Q'13
4Q'13
1,741
1,785
1,527
1,400
1,200
1,939
500
4Q 2012
1,681
1,600
14.2x
1,298
1,794
15x
12.1x
1,587
Dump distance
2,000
1,000
4Q 2012
1Q 2013
2Q 2013
3Q 2013
4Q 2013
The Company‟s ASP only decreased by 7.8% y-o-y from US$ 72.2/ton in 2012 to US$ 66.6/ton in 2013, which
compared favorably with NEWC Index price that declined 12.0% 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 at a timely manner. (When entering into a fixed-priced contract, the Company typically
would secure it in the very early part of the year during a relatively higher NEWC Index price). Meanwhile, the 2013
ASP was based on the Company‟s timely predictions during 3Q12 that coal prices would trade lower and at higher
volatility in 2013 than in 2012. As a result, the Company sold the majority of its 2013 sales volume to its quality
buyers in advance by entering into fixed-priced contracts over the end periods of 2012. This enabled the Company
to maximize its pricing structure, hence translating to a higher ASP in 2013 relative to the benchmark NEWC Index.
FINANCIALS
3
Financial and Operational Highlights
All figures are in million US$ unless
otherwise stated
2012
2013
Changes
Operational
Sales Volume
Mn ton
5.5
6.3
15.2%
Production Volume
Mn ton
5.6
6.5
16.8%
x
14.9
13.4
(10.1%)
FOB Vessel Cash Cost*
US$/ton
62.5
52.8
(15.5%)
Average Selling Price (ASP)
US$/ton
72.2
66.6
(7.8%)
2012
2013
Changes
Stripping Ratio (SR)
Financial Performance
Profit (Loss)
Revenue
US$ Mn
396.7
421.8
6.3%
Cost of Goods Sold
US$ Mn
348.5
342.3
(1.8%)
Gross Profit
US$ Mn
48.2
79.6
65.0%
EBITDA**
Total Comprehensive Income
For the Periods
US$ Mn
22.5
58.6
160.7%
US$ Mn
12.0
36.1
201.1%
Free Cash Flow***
US$ Mn
(47.3)
45.6
196.4%
Capex
US$ Mn
15.4
23.3
51.4%
2012
2013
Changes
55.9
13.9%
Balance Sheet
Interest Bearing Debt
US$ Mn
49.0
Cash and cash Equivalents
US$ Mn
36.3
63.3
74.3%
Net Debt****
US$ Mn
12.7
(7.4)
(158.5%)
Total Assets
US$ Mn
261.5
311.7
19.2%
Total Liabilities
US$ Mn
150.6
181.2
20.3%
Total Equity
US$ Mn
110.9
130.5
17.6%
Changes
Financial Ratios
Gross Profit Margin
%
12.2%
18.9%
55.2%
EBITDA Margin
%
5.7%
13.9%
145.1%
Notes:
*FOB Vessel Cash Cost = COGS including royalty and selling expense – depreciation and amortization
**EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization
*** Free Cash Flow = Cash Flow from Operation – Cash flow for Capex
**** Net Debt = Interest bearing debt – cash and cash equivalents
4
PROFIT (LOSS)
SALES
Although the weak global coal prices affected the Company‟s overall ASP by 7.8% from US$ 72.2/ton in 2012 to
US$ 66.6/ton in 2013, the Company nevertheless demonstrated resilience by posting a stable 6.3% rise in revenue
from US$ 396.7 million in 2012 to US$ 421.8 million in 2013 on the back of a 15.2% increase in sales volume over
the same period.
COST OF GOODS SOLD
The 15.2% y-o-y expansion in sales volume from 2012 to 2013 coincided with lower cost of goods sold over the
same period, showing the Company‟s ability to significantly reduce FOB vessel cash cost from US$ 62.5/ton in
2012 to US$ 52.8/ton in 2013. Mining costs, such as overburden removal and dump distance as well as fuel, make
up the major cost components. Such drastic reduction in FOB vessel cash cost was the result of the Company‟s
cost efficiency initiatives of lowering SR and dump distance, hence enabling it to generate positive cash margins
thereafter.
EBITDA
EBITDA surged by a hefty 160.7% y-o-y from US$ 22.5 million in 2012 to US$ 58.6 million in 2013, resulting from
predominantly the Company‟s successful strategy in expanding its sales volume amidst the weaker ASP while
lowering mining costs in the process. Hence, a combination of the Company‟s on-going cost efficiency initiatives
and improvement in sales and marketing activity positively boosted EBITDA margin from 5.7% in 2012 to 13.9% in
2013.
COMPREHENSIVE INCOME
After subtracting tax expense of US$ 15.8 million from profit before tax for the period 2013, the Company booked
total comprehensive income (before minority interest) of US$ 36.1 million, up by a stellar 201.1% from US$ 12.0
million in 2012. This income achievement of US$ 36.1 million already factored in the combined impacts of forex
loss worth US$ 8.2 million and gain on settlement of pre-existing intercompany account in the amount of US$
7.5 million.
The forex loss was attributable to a 26.0% depreciation of the IDR against the US$ during 2013, which was mainly
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 2013, the IDR weakened by as much as 26.0% against
the US$, from IDR 9,685 in early January 2013 to IDR 12,189 as per December 2013.
5
FREE CASH FLOW
The Company‟s free cash flow experienced a significant y-o-y improvement from 2012 to 2013. In 2013, it
generated cash flow of US$ 45.6 million, a difference compared to minus US$ 47.3 million in 2012. Such an
increase was in line with the Company‟s continued improvement in performance and a more measured working
capital management.
BALANCE SHEET
ASSETS
The Company‟s assets in 2013 stood at US$ 311.7 million in 2013 or up 19.2% from US$ 261.5 million as per endDecember 2012. Such growth predominantly resulted from a build-up in cash and equivalents of US$ 27.0 million,
inventories of US$ 4.0 million, fixed assets of US$ 15.0 million, and mining properties US$ 14.3 million.
Cash and cash equivalents
Interest Bearing Debt
63
60
56
49
43
40
42
45
47
36
Q4 2012
Q1 2013
Q2 2013
Q3 2013
Q4 2013
Note: Figures are in Mn US$
LIABILITIES
st
Meanwhile, total liabilities rose by 20.3% y-o-y to US$ 181.2 million in 2013 from US$ 150.6 million as per 31
December 2012 and interest bearing debt expanded by 13.9% to US$ 55.9 million in 2013 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 2013 increased 17.6% to US$ 130.5 million from US$ 110.9 million as per end-2012, and this was
attributable to additional income for the period.
CAPITAL EXPENDITURE (CAPEX)
Until end of December 2013, the Company had realized total CAPEX of US$ 23.3 million, which were utilized 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. This realized CAPEX was lower than the Company‟s initial
guidance of US$ 27.0 million, mostly due to cost savings in the execution of these projects throughout the year.
6
MARKETING
During 2013, 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. 2013 was a marketing
milestone for the Company as it successfully garnered a more diversified and higher quality customer
base, expanded 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
South Korea
10%
China
43%
Taiwan
19%
India
14%
OPERATIONAL UPDATE
Initiative
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
Achievement
Construction of CPP is
in finalization stage
7
TMU
Construction and completion of hauling connected road
linkages between TMU and IM via ABN. Cost saving in the
form of lower logistics costs is expected at around US$ 56/ton
Construction of hauling
road from TMU to IM,
via
ABN
was
completed in 2Q13,
ahead of schedule
Earlier-than-expected completion of hauling road at TMU in
2Q13 enabled it to successfully ramp up production, achieving
its highest quarterly production volume of 414,000 tons in
4Q13, up by 50.5% from previous high of 275,000 tons in
3Q13
TMU Coal production (ktons)
450
414
400
350
275
300
250
200
147
150
100
88
50
Q1 2013
Q2 2013
Q3 2013
Q4 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 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.
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.
th
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