Analyst Briefing FY13 performance results 27 Feb 2014
The view s expressed here contain inform ation derived from publicly available sources that have not been independently verified. No representation or w arranty is m ade as to the accuracy, com pleteness or reliability of the inform ation. Any forw ard looking inform ation in this presentation has been prepared on the basis of a num ber of assum ptions w hich m ay prove to be incorrect. This presentation should not be relied upon as a recom m endation or forecast by PT. Indo Tam bangraya 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 2
Introduction 1 Operational review 2 Commercial review 3 Financial review 4 Appendices 3
Highlights of 4Q13 and FY13 results Coal sales Coal sales 29.1 Mt 7.7 Mt Up 0 .3 Mt Up 1.9 Mt Unit: US$ Mln +4% Q-Q +7% y-y Q-Q FY12 3Q13 4Q13 FY13 y -y Total Revenue +1% 2,439 2,179 543 546 -11% Gross Profit Margin -3% 26% 23% 30 % 23% -7% EBIT -16% 558 337 99 8 3 -40 % Net incom e -25% 432 230 61 46 -47% -2% ASP* (USD/ ton) $72.5 $71.0 $90 .0 $74.9 -17% * Includes bonus/ penalty 4
20 13 in review: strengthening our core Indom inco – Td. Mayang Trubaindo - Bharinto • Lower SR to reduce • Lower SR to reduce production costs production costs • IPCC trial commenced in • Shortened OB hauling Dec 2013 distance to dumping area • Completed study for trucks to partially replace • Trial shipment of diesel with LNG Bharinto coal to non- Japan market • Achieved TPM level 4 at Td.Mayang mine and level • Reduce fuel TDMY INDOMINCO 3 at Indominco mine consumption on tug- Mahakam boats River TRUBAINDO • Renegotiating barging Jakarta Office contract BONTANG • Establishment of PT. ITM Indonesia for coal trading EMBALUT BHARINTO SAMARINDA business (ANCHORAGE) Em balut - Jorong • Establishment of PT. BALIKPAPAN • Optimized mining TRUST for in-house mining reserves at Embalut JORONG contractor business mine • Establishment of • New conveyer belt Compliance and Risk system at Embalut port Management Dept in the JORONG • Prepared mine closure Org. Structure (ANCHORAGE) master plan at Jorong • Reduce total cost by 11% to MINE SITE mine $62/t in 2013 COAL TERMINAL • Capex postponement and POWER PLANT rationalization 5
Key achievem ent in 20 13 PT Indo Tambangraya Megah Tbk. PT Indo Tambangraya Megah Tbk received in the category of awarded Corporate Governance “excellence award” from International Convention on QC Award with “Best Overall” by the Circles 2013 by Association of Pioneer Quality Control Indonesian Institute for Corporate Research-Taiwan Directorship (IICD) PT Indo Tambangraya Megah Tbk received Indonesia Corporate Governance Awards in the category of “Trusted Company” from SWA Magazine and collaboration with Institute of Corporate PT Indo Tambangraya Megah Tbk. Governance (IICG) PT Indo Tambangraya Megah Tbk. Received Social Business received 7 categories of GKPM Award . with the Innovation Awards GKPM alone stands for Com m unity predicate of “Special Achievement Developm ent Works Exhibition for Community Development from Coordinating Ministry of People’s Recovery Initiative’ from Warta Welfare in collaboration with CFCD Ekonomi Magazine 6
20 14 and beyond: further cost reduction GROWTH COST MANAGEMENT BEST PRACTICE • Comply with new Accounting • Increase Bharinto production • Continue on cost reduction Standard (ISAK 29) capacity up to 3.0 mtpa initiatives • Strengthen CSR through • Trubaindo infrastructure • Contractor management Community Consultative development (hauling road • Trial stage for coal and Committee (CCC) together improvement, bridge overburden hauling using bi- with mining contractors construction, etc.) fuel (LNG) at Indominco mine • Become the Top 10 of ASEAN • Exploration drilling at • Study on different mining CG Score Card Trubaindo and Bharinto area techniques • Strengthen safety and • Bontang and Bunyut port • Further study for alternative environment standard at all capacity expansion mode of transportation (IPCC mine sites project, electrification, belt • Commencement of in-house conveyer, etc.) • Further operational excellence mining contractor operation through TPM implementation (PT. TRUST) • Maximize utilization of power plant at Bontang port • Enhance Risk Management • Start coal trading activity best practices through PT. ITM Indonesia • Energy saving schemes • Continue to look for coal and power opportunities 7
20 13 vs 20 14 operation sum m ary FY13 OUTPUT: 29.4Mt FY14 TARGET: 29.5Mt QUARTERLY OUTPUT Units: Mt East 8 .0 Kalimantan 7.6 7.5 7.2 7.1 7.1 Bharinto Jorong Kitadin Ind om inco 15.1 15.2 Trubaindo 7.8 7.3 2.5 1.8 2013 2014e Indom inco 2013 2014e Truba ind o 2013 2014e Td .Ma y a ng 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 E Bha rinto Em ba lut Samarinda 1.1 1.0 3.0 Indom inco INDICATIVE OUTPUT TARGETS* 1.6 Balikpapan 2013 2014e 2013 2014e Units: Mt 33.0 32.0 Central 29.5 29.4 Kalimantan Bharinto 27.5 Jorong Palangkaraya Kitadin South Kalimantan Trubaindo Banjarmasin Indom inco 1.3 1.2 Jorong 2013 2014e 20 12 20 13 20 14 e 20 15e 20 16 e 8 * Not including inorganic grow th. Note: These output targets are indicative only and are subject to change
1 Introduction 2 Operational review 3 Commercial review 4 Financial review Appendices 9
Indom inco Mandiri SCHEMATIC QUARTERLY UPDATES � 4Q13 production slightly lower than target due to weather 20 14 ta rget: 15.2m t condition. � IPCC Project: project already commenced in Dec 2013. In Operations process of handover from project team to operation team. Ports WEST BLOCK ● Coal Transport: Project study and bi-fuel trial test already Hauling ROM conducted successfully. In process of finalizing Mine Stockpile stockpile implementation plan. stockyard Crusher EAST BLOCK QUARTERLY OUTPUT Units: Mt 4.5 Bontang City 4.0 4.0 3.8 W BLOCK 3.6 35Km 3.5 0.4 2.0 1.0 1.3 Sea conveyor 1.1 1.1 2.5Km Asphalt haul E BLOCK road 3.4 3.0 2.7 2.5 2.5 2.4 Post Santan River Panamax Port stock 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 e yard 95,000DWT Units: Bcm / t Inland 8.5 10.2 12.4 12.3 10.3 Avg.SR: 9.6 conveyor 4km 19.1 E BLOCK W BLOCK 19.1 17.1 16.9 16.8 13.9 km 9.0 9.3 9.3 0 2 4 6 8 10 7.7 7.2 7.2 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 e 10
In Pit Crushing Conveying (IPCC) system CONCEPT OF IN-PIT CRUSHING AND CONVEYING (IPCC) COMMENTS ILLUSTRATIVE ONLY ● IPCC trial stage Mine depth without IPCC commenced in December Mine depth with IPCC 2013 at Indominco East Block IPCC WASTE ● OB removal capacity: 14 SPREADER NON-IPCC DUMP WASTE DUMP MBcm per year ● Using power from PIT BENCHES Indominco coal-fired BACKHOE EXCAVATOR power plant C.120 M IN-PIT TRUCK CONVEYORS ● Estimated cost savings around 10% of OB costs IPCC WASTE C.80 M DEEPER ● Other benefits include IN-PIT TONNAGES CRUSHER access to deeper coal reserves and being more environmentally friendly (less dust, noise, emission) 11
Trubaindo and Bharinto SCHEMATIC QUARTERLY UPDATES Trubaindo: Mahakam � 20 14 Ta rget: TCM : 7.3m t River � 4Q13 production slightly lower than target due to weather BEK : 3.0 m t condition. Bunyut Port � New crushing plant: Select EPC bidders and negotiate for terms and conditions. Product coal EAST KALIMANTAN conveyor, stacking, � Bunyut port expansion: Engage with engineering design for stockpile barge loading system upgrade. 40km Bharinto: � Mine to port Operations � 4Q13 production slightly lower than target due weather condition. Barge Port Kedangpahu Hauling River QUARTERLY OUTPUT PT. Stockpile TRUBAINDO Units: Mt 2.6 2.4 2.5 2.3 2.2 0.6 2.1 0.3 ROM 0.5 0.3 BHARINTO 0.2 0.5 stockpile North Block Bharinto 60km 2.1 2.0 2.0 2.0 1.9 TRUBAINDO 1.7 south west of Trubaindo South Block 1 North Block 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 e (Dayak Besar) 9.2 Units: Bcm / t 7.8 7.6 7.5 South Block 2 6.9 BHARINTO (Biangan) (0.4) PT. BHARINTO 12.7 TRUBAINDO 0 5 10 15 20 25 km 11.1 11.2 10.3 10.9 10.9 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 e 12
Kitadin Em balut and Tandung Mayang SCHEMATIC QUARTERLY UPDATES 20 14 Ta rget: EMB : 1.0 m t Kitadin Embalut: � TDM : 1.8 m t � 4Q13 production is according to target. TD. MAYANG Kitadin Tandung Mayang: � Bontang city IMM WB IMM EB � 4Q13 production is according to target. Bontang Port � Start to transfer some fleets from own concession to ROM contractors business. stockpile EMBALUT QUARTERLY OUTPUT 5km Mine to port Embalut Port Units: Mt Mahakam 1.1 1.0 River Samarinda TDM 0.8 0.8 to Muara Berau 0.8 EAST KALIMANTAN 0.7 0.6 0.8 0.5 0.5 0.5 0.4 EMB 0.2 0.3 0.3 0.3 0.3 0.2 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 e to Muara Jawa Units: Bcm/t 17.9 15.1 15.1 15.1 15.1 Operations 15.1 Balikpapan TDM Ports Hauling 11.5 11.5 11.5 10.9 10.6 EMB Stockpile 6.0 0 2 4 6 8 10 km Crusher 4 Q12 1Q13 2Q13 3Q13 4 Q13 1Q14 e 13
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