PT Indo Tambangraya Megah Tbk Analyst Briefing 4Q17 & FY17 Performance Results Jakarta, 26 February 2018 1
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 2
Highlights of 4Q17 and FY17 results Coal sales Coal sales 23.1 Mt 6.5 Mt Down 3.7 Mt Up 0.9 Mt -14% Y-Y +17% Q-Q Unit: US$ million y-y 4Q17 Q-Q FY16 FY17 3Q17 1,367 1,690 +24% 415 526 +27% T otal Revenue 24% 30% +6% 32% 30% -2% Gross Profit Margin 205 388 +89% 121 +13% EBIT 107 +66% 137 +12% 269 448 123 EBITDA +93% 80 +20% 131 253 67 Net Income +43% $80.8 +9% $51.0 $73.0 $73.9 ASP (USD/ton) 3
2017 in review $448M EBITDA (+66%) RESERVES UP 39% HIGHER PRODUCTION SELLING PRICE HELD UP WELL $253M NPAT (+93%) Gross increase in Tight supply pushed 22.1 Mt production Despite challenges, ITM reserves by 77Mt still recorded increase price to $104/t in 4Q17. despite heavy rainfall ITM’s ASP increased by and mine closure in EBITDA and net 43% to $73/t in 2017 profit FUEL COST COAL MINE CORPORATE CORP . SOCIAL INITIATIVE ACQUISITION GOVERNANCE RESPONSIBILITY PT GasEmas acquired Additional 4.7 Mt high Obtained several Obtained Gold and for cost control and to CV reserves from PT corporate governance Platinum CSR Award captured additional Tepian Indah Sukses awards from several 2017 from ICA margin acquisition leading institutions institution 4
Awards and achievements in 2017 Runner-up for 2016 Community The Best Runner-up Best Indonesian Best CG for non- Annual Report Development for Best Open-Pit Listed Companies finance category Award Programs Awards Coal Mining From Otoritas jasa From Indonesian Obtain Platinum, Indominco was From Anugerah Keuangan and Bank Institute for Gold and Silver awarded 1st Runner- Bisnis Indonesia Corporate Awards from Indonesia Up of the 2017 Award 2017 for Directorship (IICD) Indonesian ASEAN Energy mining sector Sustainable Awards for Best Development Goals Practice in Surface Awards (ISDA) Coal Mining category 5
Strategies: 2018 and beyond CONTRACT MINING COAL TRADING Growing internal contribution Blending for value-added PT TRUST US$40 M capex Targeting 2.5 Mt in 2018 to improve fleet Ramp up capacity to reach productivity in 2018 5 Mtpa by 2020 Further study to increase Synergy with Banpu to capacity to work at Melak improve coal quality cluster COAL MINING through blending technology Increase reserves 77 Mt from organic reserves Inorganic – 5Mt last year; continue to explore opportunities Enhance margins through operational excellence, productivity improvement, POWER GENERATION and business process enhancement Conventional and renewables FUEL PROCUREMENT Long term focus by expanding skills Actively evaluate new Cost control and additional margin and competitive advantage investment opportunities Supply for own internal use both in conventional and renewable energy Aim for cost reduction Participate in bidding Build on capacity to sell to 3 rd power project with PLN party customer Synergy with Banpu Power operational expertise 6
Additional reserves through organic expansion Unit: Mt Coal reserves increased by 77 Mt , to 275 Mt +39% 275 (22) 253 +48 +29 198 2016 Exploration Economics 2017 - Gross 2017 Sales 2017 - Net 7
Agenda 1 INTRODUCTION 2 OPERATIONAL REVIEW 3 COMMERCIAL REVIEW 4 FINANCIAL REVIEW 5 QUESTION & ANSWERS 8
2017 operational review INDOMINCO • Indominco production volume 13.0 Mt in 2017 despite heavy rainfall at mine area • Rationalized capex spending by 86% in 2017 • Indominco achieved Zero Accident Award from East Kalimantan Governor on Mar 2017 TD. MAYANG • Indominco achieved 1st Runner-up Best Practices in Surface Coal INDOMINCO Mining Category by the ASEAN Center for Energy (ACE) in Philippines on Sep 2017. TRUBAINDO BONTANG TRUBAINDO - BHARINTO EMBALUT • Trubaindo production output achieved 4.9 Mt and Bharinto achieved 2.4 Mt in 2017 despite heavy rainfall BHARINTO • Trubaindo: rationalized capex spending by 40% in 2017 • Trubaindo achieved 2017 Best Rescue Emergency Response Team (ERT) from Fire Rescue Challenge (BFRC) at Balikpapan • Bharinto: capex spending increased by 66% in 2017 JORONG • Bharinto achieved Zero Accident Award from Ministry of Employment of Indonesia on Jul 2017 MINE SITE EMBALUT - JORONG COAL TERMINAL • Embalut production 0.9 Mt and Jorong 0.9 Mt in 2017 • Optimized mining reserves at Embalut mine • Mine closure plan approved by government for Jorong mine 9
Operational summary 2017-2018 2017 OUTPUT : 22.1 Mt 2018 TARGET : 22.5 Mt COMMENTS 4Q17 total output was lower than target due to East heavy rainfall at Indominco and Melak area Kalimantan Higher output target in 2018 as compared to 2017 13.01 13.1 INDOMINCO 1Q18 production target lower YoY due to lower inventory at the end of 2017 4.9 4.6 Bunyut Port 2017 2018e Expect higher SR in 1Q18 as a result of pre- TD.MAYANG TRUBAINDO 2017 2018e stripping activities BHARINTO Samarinda KITADIN 2.4 2.7 EMBALUT 2017 2018e Balikpapan 0.9 1.0 QUARTERLY OUTPUT TREND Central 2017 2018e Kalimantan Unit: Mt 6.0 Palangkaraya 5.7 South Kalimantan 5.4 5.0 4.5 Bharinto Banjarmasin Jorong Kitadin JORONG 0.9 1.1 Trubaindo 2017 2018e Indominco Jorong Port 1Q17 2Q17 3Q17 4Q17 1Q18e 1Q18e 4Q17 1Q17 2Q17 3Q17 10
Rainfall 2012 - 2017 INDOMINCO TRUBAINDO & BHARINTO Average 2017 rainfall Unit: Millimeter Unit: Millimeter levels at most mines reached highest levels in 6 800 800 700 700 years since 2010, with 600 600 June –November’s level up 500 500 400 400 steeply 300 300 200 200 Trubaindo & Bharinto 100 100 rainfall in 4Q17 was higher 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec than expected, which impacts output production EMBALUT JORONG Jorong rainfall mid 2017 Unit: Millimeter Unit: Millimeter was higher than expected 800 800 700 700 impacting output 600 600 500 500 400 400 300 300 200 200 100 100 0 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 – 16 average rainfall 2017 rainfall 2010-16 rainfall range 11
Indominco Mandiri SCHEMATIC QUARTERLY UPDATES 4Q17 production was slightly lower than target due to 2018 target: 13.1 Mt Operations rainfall affecting the mine production Ports Pre-stripping activities in 1Q18 as a result of Hauling optimized coal reserves at pit area Stockpile West Block Average strip ratio in 2018 is expected to be higher ROM Crusher Mine than 2017 to optimize coal reserves stockpile stockyard QUARTERLY OUTPUT East Block Unit: Mt 3.4 Bontang City 3.2 3.2 3.2 W BLOCK 35Km 0.5 0.4 2.4 0.3 0.4 0.3 Sea conveyor 2.5Km Asphalt haul 2.9 2.9 2.8 2.8 E BLOCK 2.1 road Post Santan River 1Q17 2Q17 3Q17 4Q17 1Q18e Panamax Port stock Unit: Bcm/t yard 95,000 Avg 13.3 13.1 14.5 10.2 10.7 Inland DWT SR: 28.5 conveyor 4km 26.7 25.1 22.5 20.2 W BLOCK 11.2 11.1 12.0 9.1 9.4 E BLOCK km 0 2 4 6 8 10 1Q17 2Q17 3Q17 4Q17 1Q18e *SR based on FC coal **SR FY17 IMM: 11.8 , WB: 23.9 , EB: 10.2 12
Melak group – Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES 2018 target: TCM 4.6 Mt Trubaindo: Mahakam BEK 2.7 Mt 4Q17 production lower than target due to weather River condition at Trubaindo area Bunyut Port Continue hauling road improvement program from Trubaindo to Bharinto area, expected to be completed Product coal conveyor, East Kalimantan by mid of 2018. stacking, stockpile Bharinto: 40km 4Q17 production was lower than target due to heavy Mine to port Operations rainfall affecting mine production. Barge Port Kedangpahu Hauling River QUARTERLY OUTPUT PT. Trubaindo Stockpile Unit: Mt 2.1 1.9 ROM 1.7 1.5 1.5 stockpile BHARINTO 0.6 North 0.6 0.6 0.5 0.6 Block Bharinto 60km 1.5 1.3 TRUBAINDO 1.1 1.0 south west of 0.9 Trubaindo North South Block 1 1Q17 2Q17 3Q17 4Q17 1Q18e Block (Dayak Besar) Unit: Bcm/t 12.4 Avg SR: 9.1 9.3 6.5 6.2 South Block 2 BHARINTO (Biangan) 15.3 13.3 9.4 9.7 TRUBAINDO 0 5 10 15 20 25 8.8 km PT. Bharinto 1Q17 2Q17 3Q17 4Q17 1Q18e *SR based on FC coal **SR FY17 TCM: 10.9 , BEK: 8.6 13
Kitadin Embalut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 2018 target: EMB 1.0 Mt Kitadin Embalut: 4Q17 production achieved according to target TD. Mayang Further study to optimize coal reserves Bontang city Kitadin Td.Mayang: IMM WB IMM EB Continue mine closure activities including ROM Bontang mine rehabilitation. Port stockpile Embalut QUARTERLY OUTPUT 5km Mine to port Embalut Port Unit: Mt Mahakam TDM Samarinda River to Muara 0.2 0.3 0.3 0.2 0.2 Berau EMB 1Q17 2Q17 3Q17 4Q17 1Q18e East Kalimantan Unit: Bcm/t to Muara Jawa Avg SR: Operations 16.5 Balikpapan EMB 12.5 Ports 12.1 11.3 10.4 Hauling Stockpile 1Q17 2Q17 3Q17 4Q17 1Q18e 0 2 4 6 8 10 km Crusher *SR based on FC coal **SR FY17 EMB: 12.2 14
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