Post on 12-Mar-2015
ANALYST BRIEFING 1Q11 Performance Results
12 May 2011
DISCLAIMER
The views expressed here contain information derived from publicly available sources that have not been
independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the
information. Any forward looking information in this presentation has been prepared on the basis of a number of
assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or
forecast by PT. Indo Tambangraya Megah Tbk. Nothing in this release should be construed as either an offer to buy or
sell or a solicitation of an offer to buy or sell shares in any jurisdiction
1. Introduction
2. Financial Review
3. Operational Review
4. Commercial Review
Agenda
Agenda
1. Introduction
ITM Operations in 2011
East Kalimantan
Bunyut Port
Balikpapan
Palangkaraya
Banjarmasin
Central Kalimantan
South Kalimantan
KITADIN
EMBALUT
1.0 Mt
INDOMINCO
15.0 Mt
TRUBAINDO
7.3 Mt
JORONG
1.0 Mt
ITM OPERATIONS & PROJECTS
Captive coal-
fired power
Samarinda
Jorong Port
Bontang Coal
Terminal
Operation
Project
Indominco
Trubaindo
Bharinto
Embalut
Td. Mayang
Jorong
Total coal output:
1Q11: 5.2 Mt
FY11: 25.0 Mt target
- 1Q11 output: 3.1Mt
- FY11 target: 15.0Mt
- Additional mining equipment will arrive
starting in June 2011 onwards
- 1Q11 output: 1.5Mt
- FY11 target: 7.3Mt
- 1 new mining contractor and additional
mining equipment in this year
- FY11 target: 0.2Mt
- First production output by 4Q 2011
- 1Q11 output: 0.3Mt
- FY11 target: 1.0Mt
- Expected higher cost in 2011 due to mud
and difficult mining area
- Works as mining contractor at IMM area
- Production from own mine will commence by
2H 2011 with target output of 0.5Mt
- 1Q11 output: 0.3Mt
- FY11 target: 1.0Mt
- Higher strip ratio due to change of mine plan
BHARINTO
0.2 Mt
KITADIN
TD.MAYANG
0.5 Mt
2011 Board of Commissioners
Ibrahim Yusuf President & Independent Commissioner
Somruedee Chaimongkol Commissioner
DR. Sathidpong Wattananuchit Commissioner
(replacing Rawi Corsiri)
Ir. Lukmanul Hakim, MM Commissioner
Rudijanto Boentoro Commissioner
Prof. Dr. Djisman S.Simandjuntak Independent Commissioner
Joined Banpu PCL since 1998 started as VP HR and in 2004-2005 as VP Internal Audit and
during 2006-2007 was assigned as Group Senior Vice President - Corporate Services and
in 2007 till present appointed as the Assistant CEO - Corporate Service
7 years in Finance and Securities industry
Nithipat Capital Public Company Limited, as VP HR & Administration
Peregrine Nithi Finance & Securities Company, as Manager HR
3 years in the Infrastructure / Transportation Industry
Bangkok Mass Transit System Company Limited, as HR & Administration
Tanayong Public Company Limited, as VP HR & Administration and acting as Legal
Manager
Name : DR. Sathidpong Wattananuchit
Date of Birth : 18 June 1959
Working Experiences
Board of Commissioners:
2011 Board of Directors
Somyot Ruchirawat President Director
Pongsak Thongampai Director
Edward Manurung SE, MBA Director
Mahyudin Lubis Director
Hartono Widjaja Director (replacing Aphimuk Taifayongvichit)
Board of Directors:
Name : Hartono Widjaja
Date of Birth : 03 December 1963
Working Experiences
1988 : Sales Associate in Metrodata (IBM)
1989 : Assistant Marketing Manager PT Kitadin
1992 : Marketing Manager PT Kitadin
1994 : Deputy General Manager - Marketing & Shipping
1996 : General Manager - Marketing & Shipping
1999 : Deputy Director - Marketing & Shipping
2002 : Vice President Regional Marketing
2007 : Senior Vice President - Marketing China & North Asia
2010 : Senior Vice President - Marketing Japan, Europe, NZ & Marketing Compliance
Agenda
2. Financial Review
Sales Revenue
402.9
+6.1
(3.5)
1Q10 4Q10
439.6
468.3
1Q11 Indominco Trubaindo Jorong Kitadin Others
+28.4 (0.9) (1.4)
Unit: USD Million
Lower sales volume
Higher ASP by 14%
Higher sales volume
Higher ASP by 10%
Average Gross Margin
* COGS included royalty
ITM Consolidated Indominco Trubaindo Kitadin Jorong
1Q10
403
32%
291
24%
142
28% 33%
46
24%
21
25%
Units: USD millions
4Q10
440
25%
328
14%
148
30% 46
10%
18
19%
Total
Revenue
GPM* (%)
1Q11
468
33%
28%
22%
37%
13% 1Q10 4Q10 1Q11 1Q10 4Q10 1Q11 1Q10 4Q10 1Q11 1Q10 4Q10 1Q11
364
164
44
18%
19
EBITDA
Units: USD million CONSOLIDATED
MINE BY MINE
*COGS = Prod cost + Transport cost + Inv. movement
Revenue 4Q10 1Q10 1Q11
76.4
COGS Selling Royalty
Admin
107.1
61.1
32.4
10.4
1.2
Indominco Trubaindo
1Q10
Kitadin Jorong
4Q10
28.4 30.8
5.5 1.8
1Q11
71.6
47.0
10.6
1.9
Units: USD million
1Q10 4Q10 1Q11 1Q10 4Q10 1Q11 1Q10 4Q10 1Q11
131.8
+28.7
(4.8) +22.2 +2.1
+7.2
Royalty increased
with revenues
Higher ASP
by 13%
Lower SR
+73% QoQ
Net Income
4Q10 1Q11 Others EBIT
Income
Tax
Derivative
Transactions
FOREX Net
Fin.Charges 1Q10
CONSOLIDATED
MINE BY MINE
Units: USD million
67.2
18.3
95.2
41.3
6.3
22.2
(3.0)
Indominco Trubaindo Jorong Kitadin
(11.2) 1.1
20.4
1.3
55.2
33.0
5.4
1Q10 4Q10 1Q11 1Q10 4Q10 1Q11 1Q10 4Q10 1Q11 1Q10 4Q10 1Q11
Units: USD million
(0.4)
+52.9 (1.0) +2.5
+47.8
+0.6
(25.9)
+421% QoQ
Higher ASP
by 13%
Derivative
gain
Balance Sheet
Net Gearing (%)
Net D/E (times)
(30%)
(0.34) (0.36)
(34%)
(Units: USD million)
CASH POSITION
2007 2008
258 222
(Units: USD million)
DEBT POSITION
2007 2008
92
11
55
2009
429
(0.47)
(44%)
2009
1Q11
384
0
1Q11
(0.49)
(49%)
295
2010
0
2010
(0.41)
(41%)
2007 2008 2009 1Q11 2010
2011 Capital Expenditure Plan: USD 126 m
Units: USD million
Trubaindo infrastructure
Indominco East block
washing plant
Indominco port
improvement
Td.Mayang equipment
Bharinto development
2.1
Realized up to Mar’11
2011 major Capex plan
57.2
7.1
7.2
10.5
33.4
Maintenance and
improvement initiatives
0.0
0.9
0.7
10.6
1.4
4.1
Agenda
2. Operational Review
3.1 3.8
Indominco Mandiri
EAST BLOCK
Santan River Port stock yard
Bontang City
Asphalt haul
road 2.5Km
35Km
Sea conveyor
Mine
stockyard
Inland
conveyor 4km
0 10 6 8 2 km 4
WEST BLOCK
Operations
Stockpile
Ports
Hauling
Crusher
ROM
stockpile
INDOMINCO-BONTANG SCHEMATIC INDOMINCO PRODUCTION ANALYSIS
Post
Panamax
95,000DWT
1Q
14.7 SR 15.0
2Q
14.9
3Q
14.9
4Q
15.0 Mt
14.3 Mt 2010
2011e
3.7 3.5 3.6
SR 13.5
3.6
MAJOR QUARTERLY UPDATES
1Q11 production was lower than target due to heavy
rainfalls affecting the mining productivity
Additional mining equipment from PAMA and TDM
contractor starting in June 2011 onwards
Overall strip ratio in 2011 is expected to be lower than
2010 due to higher portion of EB production which have
lower strip ratio
Expansion of port (PSY-3) and installation of tunnel
conveyor is still ongoing and expected to be completed
within 2Q11
1.8
SR 15.8
West Block
1.3
East Block
10.1
1Q 1Q
8.0 Mt 7.0 Mt 2.0 1.8
2Q 2Q
1.5
Trubaindo and Bharinto
Mahakam
River
TRUBAINDO PRODUCTION ANALYSIS
Operation
Stockpile
Hauling
Barge Port
Crusher
1Q 2Q 3Q 4Q
2010
7.3 Mt
5.5 Mt
2011e
1.1 1.6 1.5 1.3
SR 10.0
MAJOR QUARTERLY UPDATES
Trubaindo:
1Q11 production achieved according to plan
1 new mining contractor and additional mining equipment
from existing contractors started to arrive in April 2011
onwards
Bharinto:
Crushing plant construction is ongoing with 95% progress
and estimated to be fully completed by May 2011
Mining contractor already selected in March 2011
Site preparation to start pre-stripping activity in 3Q11 is
progressing as planned
FY11 production output of 0.2 Mt by 4Q11 is still on track
South Block 1
(Dayak Besar)
North
Block
40km
Mine to port
Kedangpahu
River
ROM
stockpile
Bunyut
Port
0 10 25 15 20 5 km
Product coal
conveyor, stacking,
stockpile
TRUBAINDO-BHARINTO SCHEMATIC
EAST KALIMANTAN
Bharinto 60km
south west of
Trubaindo
North Block
South Block 2
(Biangan)
PT.
BHARINTO
PT.
TRUBAINDO
SR 11.0 11.4 11.4 10.5
1.8
0.3
Kitadin Embalut and Tandung Mayang
KITADIN PRODUCTION ANALYSIS
Balikpapan
Mahakam River
Samarinda to Muara Berau
Bontang city
EMBALUT
Embalut Port
to Muara Jawa
ROM
stockpile
Operations
Stockpile
Ports
Hauling
Crusher
0 10 6 8 2 km 4
5km Mine to port
TD. MAYANG
EAST KALIMANTAN
IMM EB
KITADIN SCHEMATIC
IMM WB
Bontang Port
1Q 2Q 3Q 4Q
2010
1.0 Mt
1.2 Mt
2011e
0.4 0.3
SR 8.9
SR 10.4 10.6
0.3
10.7 10.8
MAJOR QUARTERLY UPDATES
Kitadin Embalut:
1Q11 production achieved according to plan
Higher strip ratio in 2Q11 due to mud and difficult mining
area from heavy rainfalls
Kitadin Tandung Mayang:
Currently works as mining contractor at Indominco area
Already started the pre-stripping activity in1Q11
Coal production will start in 3Q11
Expected total production in 2011 will be 0.5 Mt
0.3
0.3
0.3
Jorong
Coal terminal
Jorong
Pelaihari
Pacific Ocean
Haul road
Operations
Stockpile
Hauling
Barge Port
0 10 25 15 20 5 km
20km
JORONG SCHEMATIC JORONG PRODUCTION ANALYSIS
1Q
6.9 SR 6.9
2Q 3Q
6.9
4Q
1.0 Mt
0.9 Mt 2010
2011e
0.4 0.1
SR 8.6
0 . 0 . 0.4
MAJOR QUARTERLY UPDATES
1Q11 production achieved according to plan
Adjusted strip ratio in this year to match with
remaining reserves and to keep up with the
current mining sequence
0.3
Agenda
3. Commercial Review
Main Driver for 2011 Coal Market
Weather
Chinese Demand
World Growth
Sources: Country Forecast February and March 2011 from The Economist Intelligence Unit Limited 2011
• World growth forecast 3.1%,
Asian growth forecast 5.1%
• If unemployment concern
defers interest rate rises,
there is potential for demand
lift in 2H 2011
• But oil, food and raw material
cost will have a gradual
impact
• Japanese effect
• Oil/gas effect
• Indonesia wet season was
normal, what will dry season
be like?
• Chinese winter was normal
but with water shortages,
what will summer and end
year winter be like?
• Australian storms/floods
damage recovering slowly
• Demand is strong and
resilient above expectations
• Grid transmission/generation
infrastructure may cap
effective demand
• Statistics are contradictory in
terms of consistency in
quality as well as supply
ability vs. demand
• Imports still strong in 2011
and should exceed 2010
levels for thermal coal
Thermal Coal Benchmark Prices
Coal price benchmarks Upswing due largely to :
– Carry over impacts of rain and
accidents
– Oil and gas price rises
– Strong Asian growth
– “Fall out” in Europe due to
Japanese nuclear problem
Increased production and waiting
for demand lift to India/China and
domestic demand
Forecasts: depends on weather
and China 60
70
80
90
100
110
120
130
140
150
Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11
US
$ /
to
nn
e
FOB Richards Bay 6000 kcal/kg, NAR
FOB Newcastle 6300 kcal/kg, GAR
FOB Kalimantan 5900 kcal/kg, GAR
FOB Kalimantan 5000 kcal/kg, GAR
Newcastle, RB,
Coal prices merge
Japan Earthquake Impact on Coal Demand in 2011
Change in demand (Mt)
NE Japan
Make-up in transferred power
Western Japan + Hokkaido
Cement industry
Steel industry
Total coal demand from Japan*
European coal demand in 2011**
1H 2011 2H 2011
* Assumes no major nuclear radiation fall out to wide areas
** Impact from oil price increase resulting from the political instability in the Middle East and North Africa as well as diversion of coal demand from Japan
Total INDICATIVE ONLY
2.5
0.5
0.5
0.5
0.5
1.0
0.5
0.5
0.5
0.5
2.0
5.0
4.0 3.5
3.0 8.0
4.0 2.5 6.5
0
0
Source: Company estimates
605 602 608
714787 771 770
845 830
571567 577
676741 733 727
788 780
361358 381
458 474 457 440 495 495
0100200300400500600700800900
1,000
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11e
14
58
93
85-120
36
18 14 7 - 14
2008 2009 2010 2011 Outlook
Import Export
China Thermal Coal Market Review
Net
import
c. 92 Mt
End Mar’11 2 May’11
(RMB) (RMB)
Datong 825 860
Shanxi 770 815
Common 493 493
Source: www.sxcoal.com/cn 2 May 2011
Datong super mixed coal (6,000 kcal/kg)
Shanxi super mixed coal (5,500 kcal/kg)
Common mixed coal (4,000 kcal/kg)
RMB
China domestic coal prices China thermal coal imports and exports
Mt
Sources: China Coal Report February 2011, MS&L Estimates
Net
import
79 Mt
ITM Average Selling Prices
30
50
70
90
110
130
150
170
190
Jun-08 Feb-09 Oct-09 Jun-10 Feb-11
Monthly BJI Monthly ASP
USD per tonne
Quarterly
BJI
Quarterly
ASP
BJI* May 05, 2011 $123.95
ASP 1Q11 $87.3/t
ASP FY10 $74.9/t
ASP vs. spot BJI trend shows a
mix of pricing (LT/MT/ST)
Despite increases in product
margins, the increase in lower
CV tonnages hampers ASP
increases
Still, higher CV coal has
increased relative to index, JPU
or spot price
Indicative 2011 Coal Sales
Coal sales contract and pricing status Comment Coal sales contract and pricing status
Sales target remains at 25 Mt,
assuming normal seasonal
weather in Indonesia
Close to fully sold by 1H as
more contract settlements
expected in 2Q
Remaining unsold;
anticipating stronger market
price for low grade products
62%
24%14%
Contract Status Price Status
Contracted Fixed
100%
5%
95%
Uncontracted Unpriced
Index
TARGET SALES 2011: C. 25 Mt
Coal Sales by Geographic Destination
JAPAN (27%)
INDIA (11%)
INDONESIA
(3%)
PHILIPPINES
(5%)
HONG KONG (3%)
TAIWAN (5%)
S.KOREA (5%)
THAILAND (9%)
2011 trend expectation
2011
*Includes small, non-regular purchasers
Coal sales 1Q11
(total 5.5 Mt)
OTHERS* (1%)
ITALY (9%) 2011
CHINA (22%)
2011 2011 2011
2011
2011 2011
2011
1.4
2.3
3.5
4.5
1.5
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3M10 6M10 9M10 FY10 3M11
0.3
0.8 1.2
1.8
0.3
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3M10 6M10 9M10 FY10 3M11
2011
0.3
0.6
1.0 1.2
0.1 -
0.2
0.4
0.6
0.8
1.0
1.2
1.4
3M10 6M10 9M10 FY10 3M11 1.5
2.7
3.6
5.1
1.2
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
3M10 6M10 9M10 FY10 3M11
0.5 0.9
1.2 1.8
0.5
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
3M10 6M10 9M10 FY10 3M11
0.5
1.1
1.8
2.4
0.3
-
0.5
1.0
1.5
2.0
2.5
3.0
3M10 6M10 9M10 FY10 3M11
0.6 0.8
0.9 1.1
0.3
-
0.2
0.4
0.6
0.8
1.0
1.2
3M10 6M10 9M10 FY10 3M11
0.1 0.3
0.4 0.5
0.1
-
0.1
0.2
0.3
0.4
0.5
0.6
3M10 6M10 9M10 FY10 3M11
0.4
0.7
1.1
1.5
0.5
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
3M10 6M10 9M10 FY10 3M11
-
0.4 0.7
0.9 0.6
-
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
3M10 6M10 9M10 FY10 3M11
0.1 0.1 0.2 0.2
0.0 -
0.1
0.1
0.2
0.2
0.3
3M10 6M10 9M10 FY10 3M11
Questions & Answers
Agenda
Appendices
ITM structure and history
ITMG
65.00%
Indominco Trubaindo Bharinto Jorong
PT Indominco Mandiri
(CCOW Gen.I)
PT Trubaindo Coal
Mining
(CCOW Gen II)
PT Kitadin-Embalut
(KP)
PT Bharinto
Ekatama
(CCOW Gen III)
PT Jorong Barutama
Greston
(CCOW Gen II)
50.00%
PT Indo Tambangraya Megah Tbk.
Banpu Minerals
(Singapore) Pte Ltd
99.99% 99.99% 99.99% 99.99% 99.67%
146 Mt
697 Mt Resources
Reserves
107 Mt
335 Mt Resources
Reserves 15 Mt
152 Mt Resources
Reserves
45 Mt
298 Mt Resources
Reserves
7 Mt
145 Mt Resources
Reserves
Banpu Minerals
Co.Ltd
Reserves 330* Mt
Resources 1,640* Mt
BMS
99.99%
BMC
Banpu PCL Banpu
Public 35.00%
Kitadin
PT Kitadin-Td.Mayang
(KP)
10 Mt
13 Mt Resources
Reserves
BCI 50.00%
100.00% Banpu Coal
Investment Co.Ltd
Note: * Updated Coal Resources and Reserves as of 31 Mar 2011
East Kalimantan East Kalimantan South Kalimantan East Kalimantan East / Central Kalimantan
INDONESIAN STOCK EXCHANGE
IPO 18th Dec 2007
6,500-7,300 kcal/kg 6,000-6,300 kcal/kg 5,800 kcal/kg 6,400-6,800 kcal/kg 6,700 kcal/kg 5,300 kcal/kg
Coal resources and reserves (as of 31 Mar 2011)
Indominco
Kitadin-Td.Mayang
Jorong
Trubaindo
W.Block
E.Block
251 Mt
33 Mt
446 Mt
152 Mt
15Mt
145 Mt
7Mt
335 Mt
107 Mt
298 Mt
45 Mt
13Mt
RESOURCES
RESERVES
Kitadin-Embalut
Total Reserves : 330 Mt
Total Resources : 1,640 Mt
113 Mt
10Mt
Bharinto
Note: * Updated Coal Resources and Reserves as of 31 Mar 2011 based on estimates prepared by Competent Persons (consider suitably experienced under the JORC Code)
in 31 Dec 2010 and deducted from coal sales volume in 1Q11