Company Presentation 1 First Quarter 2013 Disclaimer These - - PowerPoint PPT Presentation

1

PT Toba Bara Sejahtra Tbk (“Toba”)

Company Presentation

First Quarter 2013

2

Disclaimer

These materials have been prepared by PT Toba Bara Sejahtra (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

• r 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

• f the Company should be made after seeking appropriate professional advice.

3

Content

Financial Highlights 4 1 Corporate Profile 2 Operational Profile 3 Business Overview CSR & Environmental Highlights 5

4

Corporate Profile

1

ABN 69% IM 31%

5

ABN 66.1% IM 15.7% TMU 18.2%

Toba comprises three coal companies, Adimitra Baratama Nusantara (ABN), Indomining (IM) and Trisensa Mineral Utama (TMU), which hold adjacent concession areas located in East Kalimantan, Indonesia

Toba in Brief

• Substantial and diversified thermal coal

reserves and resources

• JORC-compliant proved and probable reserves of

147 MM tonnes and measured, indicated and inferred resources of 236 MM tonnes

• Coal brands with calorific values ranging from

4,700 - 5,800 Kcal / kg GAR

ABN 79.6% IM 15.0% TMU 5.4%

Reserves

%

• Strong growth profile
• Produced 5.2 MM tonnes of coal in 2011 and grew to

produce around 5.6 MM tonnes of coal in 2012

• Prime location provides the operational cost edge to

grow as a logistical & operational center for the area

• Continued exploration effort to increase our Reserves and
• Resources. Current reserves only account for 52% of our

total area has been explored

Dec 2012 Revenue

%

Dec 2012 EBITDA

%

Resources

%

Total: 147 MM Tonnes Total: US$ 396 MM Total: US$ 31 MM (1) Total: 236 MM Tonnes ABN 74% IM 23% TMU 3%

Note: (1) Includes net income attributable to minority interest (ABN and IM only)

6

Notes:

• 1. Son of TS founder, Luhut B. Pandjaitan
• 2. Figures are rounded

Ownership Structure

• 20-year Production Operation Mining

Permit (“IUPOP”) expiring in December 2029

• IUPOP was converted from a Kuasa

Pertambangan (“KP”) in 2009

• IUPOP expiring in June 2013

– IUPOP was converted from a KP in 2010

• IUPOP extension has been completed in

March 2013 (First extension until 2023)

• 13-year IUPOP expiring in December

2023

• IUPOP was converted from a KP in

2010

• 2,990 ha
• 683 ha
• 3,414 ha
• Reserves: 117MT- JORC
• Resources: 156MT- JORC
• Reserve: 22 MT- JORC
• Resources: 37MT- JORC
• Reserves 8 MT- JORC / 15 MT (Internal

estimate)

• Resources: 43 MT- JORC

License Area

Davit Togar Pandjaitan (1) PT Bara Makmur Abadi PT Toba Sejahtra (“TS”) Roby Budi Prakoso PT Sinergi Sukses Utama 71.8% 0.8% 6.2% 5.1%

PT Toba Bumi Energi (“TBE”)

99.99% (2) 99.99% (2) 3.6% ABN Minorities 49.0% 51.0% 99.99% (2) Public 12.5%

Reserve

7

Majority Shareholder

Toba believes it benefits from Toba Sejahtra’s experience in the Indonesian coal sector as well as its leadership and experience

Controlling Shareholder with Established Track Record… … Helmed by an Experienced Leader

• A privately owned group founded in 2004 with interests in energy

and plantations

• Its business segments are as follow:

– Energy: Owns 5 coal mining concessions through Toba and PT Kutai Energi. All of TS' mines are characterized by low production costs and favorable proximity to ports – Oil & Gas: In the exploration phase of the 4,567 sq miles South East Madura Block through subsidiary E&P company PT Energi Mineral Langgeng – Power Plant: Operates a 30 MW coal-fired power plant in Palu, Central Sulawesi and is developing a 120 MW greenfield power plant in Senipah, East Kalimantan – Agribusiness: A 25% stake in a 12,000 ha palm oil plantation in East Kalimantan

• General (Ret.) Luhut B. Pandjaitan is the key shareholder and

founder of Toba Sejahtra group. He is currently the chairman of TS

• Mr. Luhut had a long and illustrious career in the civic service

before turning to the commercial sector. Over the course of thirty years in the Army Special Forces, Mr. Luhut rose to become a four- star general – In 1999, Mr. Luhut retired from the military service to serve as Ambassador for the Republic of Indonesia to Singapore – In 2000, he was appointed Minister of Industry and Trade of the Republic of Indonesia

• Thereafter, Mr. Luhut applied his knowledge and leadership skills to

establish TS in 2004, building it from the ground up into a major business group with interests in energy oil and gas, power and agribusiness

8

Initial Public Offering

Listed on IDX 06 July 2012 Number of shares offered 210.681.000 shares or 10.47% IPO Proceed

• Rp. 400,293,900,000

Anchor Investor Barings Private Equity (8% at IPO) Ticker Code TOBA

9

2007

• IM commenced

production 2011

• TMU commenced

production

• Toba production

hit 5m tons 2008

• ABN commenced

production

• Operational

adjustment due to a drop in coal market 2010

• TS acquired the remaining share

for IM from minority shareholder

• Toba acquired 51.0% of ABN,

52.5% of TBE (IM’s shareholding company) and 51.0% of TMU

• Toba production hit 4m tons

Key Milestones

Strong track record of acquisitions, development of greenfield mines, rapid production ramp-up and experience to adjust operation in a down-market 2007 2008 2009 2010 2011 2012 2013

2012

• Toba acquired the minorities’

shares in TBE and TMU

• IPO/Listed on IDX, 6th July

2012

• Eliminated overlapping issues

with plantation company (PKU) 2009

• ABN & IM production

reached 2m tons 2013

• IM successfully

extended IUPOP until 2023

10

Operational Profile

2

Source: Company data

0.1 1.1 3.1 3.8 4.4 ~ 6,5 0.7 0.9 0.9 1.4 1.0 0.0 0.3

1 2 3 4 5 6 7 2007 2008 2009 2010 2011 2012 2013 TMU Indomining ABN

11

Solid Operating Track Record

0,8 2,0 3,9 5,3 5,6

Production Growth

MT = Million Tonnes

0,2 ~5,8 – 6,4

Forecast

• Toba started exploration on ABN & IM in 2006 and TMU in 2008
• Production grew at 65% CAGR from initial size of 800k in 2008 to 5.6 MT in 2012
• Toba is focusing on Continuous Production Growth and this is supported with available

infrastructure capacity of 13 MT of coal

• Additional 3 MT worth of capacity is expected to be realized in 3-4Q13 to become total 16 MT
• Production growth will be driven by TMU and Additional CAPEX will help fuel growth in TMU

ABN IM TMU

Toba is transitioning from Greenfield into growing major player Forecast

12

Prime Location Gives Significant Advantage in Cost

Samarinda Mahakam River Muara Jawa Muara Berau Makassar Strait Major City Jetty Transshipment Point

~55 Km (total ~120 Km) ~65 Km

kilometers 12 24 36 48

ABN Kutai Energy

Adjacent locations for all 3 mines

TMU ABN IM

1

17km ABN Jetty IM Jetty

~ 5 km

NDM Jetty 17km

Furthest pit to jetty 25km | with closest one ~5km

3

Major city is less than 50 km

4

Close proximity transhipment point & jetty

2

All infrastructures are owned by Toba’s giving significant operating leverage vs other concessions in surrounding areas Prime Location

13

ABN 66.1% TMU 18.2% IM 15.7%

Coal Reserves Coal Resources

(MM Tonnes) Proved Probable Total Reserves Measured Indicated Inferred Total Resources

ABN 70 47 117 73 70 13 156 IM 11 10 22 24 10 4 37 TMU 5 4 8 9 8 26 43 Total 86 61 147 106 88 43 236

Reserves and resources upside from the conversion of resources to reserves and further exploration of concession areas

Notes:

• 1. Differences in totals are due to rounding
• 2. The Runge Report for ABN is as of 31 December 2011, the PT SMG Consulting Report for IM is as of 1 January 2012 and the Marston Report for TMU is as
• f 31 October 2011

Total: 147 MM Tonnes Total: 236 MM Tonnes

Substantial Reserves and Resources to Support Production Expansion

Coal Reserves and Resources (1)(2) (JORC) Reserves (1)

MM Tonnes

Resources (1)

MM Tonnes

ABN 79.6% TMU 5.4% IM 15.0%

Note: Areas already explored 14

ABN IM

Significant Portion of Area still Unexplored

• Explored 3,704 of 7,087 hectares of its concession areas (52% of total concession area) and drilled 3,512

boreholes as of 31 December 2011

• Additional JORC coal reserves and resources expected to be discovered, especially at TMU where only 680

hectares out of 3,414 hectares of the concession (20% of TMU concession area) have been explored

TMU

15

Strong Relationships with Multinational Customers

Major Customers DRAGON ENERGY GROUP

Major customers provide the stable business support for Toba’s marketing… … minimum marketing fees because Toba handles our own marketing internally

Toba’s Marketing Operations

 Central Marketing Operations of all 3 subsidiaries  Internally developed customer base that allows Toba to have low marketing costs  Balance mix of long term contracts, short term and spot  Active participation in reputable conference and trade shows to promote the Toba brand  Enhance marketing strategy to sell directly to end-users

16

Business Overview

3

17

Recent Coal Market Update

Coal Prices Rebound

Range-bound US$88 -95/ton

China’s Economic Recovery

• Coal Prices have bounced back from

high 70’s in 4Q 2012 and are range- bound at US$88 – 95/ton in early 2013

• China’s economic recovery rebounded in

4Q 2012 as China is the largest buyer in the global seaborne market

2012 2012 2013

Source: Platts Source: Bloomberg

18

Manage cash costs: Lower SR, Shorten Dump Distance Construct hauling road from TMU to IM Share current infrastructures : CPP & Jetty & lower costs Centralize fuel supply Optimize sales through hedging activities Increase our reserves through acquisition and exploration

Strategic Initiatives to Manage Changing Environment

Returning future Profitability Level Strategic Initiatives / Response to Changing Coal Prices 1 2 3 4 5 6

19

Toba’s Milestone 2013

2007 2008 2009 2010 2011 2012

• Hauling Road TMU – IM

has been completed ahead of schedule

• TMU Production ready

for ramp up to 80 - 100 K tons/mo

May’13 Sept’13

• New CPP in IM

expected to be completed

• Indomining

Capacity expected to increase up to 6 MMTPA

Oct’13

• 2nd underpass in

ABN expected to be completed

Apr’13

• TMU set up mine
• perations in

block 4

• Border-mining in

ABN & IM commenced

Jan’13

• IM entered into

new Mining Contract with RPP for 5 years

Toba is on track in integrating its operation and infrastructure capabilities

………..

20

Integration of three (3) mines

• Benchmarking and

sharing between departments and functions

• Optimize and

coordinate mine planning and logistics

• Centrally coordinate

and streamline corporate finance, legal, human resource and CSR functions

• Joint mine plan and

infrastructure sharing

1

Increase coal reserve and resource

• Continue exploration

activities to increase proven and probable reserves as only 52% has been explored to JORC standard

• Consider opportunities

to acquire coal concessions with significant reserves

3

Strengthen existing and develop new customer relationships

• Supply a higher

proportion of sales volume to end users, while maintaining relationships with existing coal traders

• Target customers in

Japan, Taiwan, South Korea, China, Vietnam and Hong Kong, South East Asia and India

4

Continue to focus on health and safety, environmental track record and commitment to CSR

• Maintain and enhance

high international

• perating standards,

utilize automated mining methods to minimize accidents and enhance safety

• Foster community ties

through development programs as well as job creation

5

Organically increase coal production levels

• Expand coal production

through increased production and mine development activities

• Strengthen

relationships with third party mining contractors and work closely with them to improve their productivity

2

Business Strategies

Growing Reserves and Maintain Profitability at Different Cycles

21

Operational & Financial Highlights

4

22

Toba Bara Operational Performance

Quarterly Production & Stripping Ratio

Thousand Tonnes

Production (million ton) Stripping Ratio (x) 1Q12 1Q13 1.1 1.3 17.7 15.2

Production Summary

Stripping Ratio continues to decline Sales (million ton) 1.1 1.4 Sales are mainly contributed by ABN and remain flat at 5.5 million tonnes per year for two consecutive years Change 27% 18%

• 14%

Comments Production rose 18% to 1.3 milllion due to lower rainfall. Contributions: from ABN 0.93 million tons, from IM 0.28 million tons and from TMU: 0.08 million tons Stripping ratio was higher in 2012 primarily due to pre- stripping activities in 1H 2012 in all three (3) mines, and delay caused by higher rainfall

Source: Company data

Pre-stripping activity was lower in 1Q13 vs 1Q12, causing lower SR

• n yoy basis. Yoy production was

higher due to lower rainfall while dump distance fell from 2.3km in 1Q12 to 1.6km in 1Q13

774 768 1,141 1,078 884 1,078 1,224 1,225 925 11.1x 16.8x 13.7x 14.2x 17.6x 17.1x 14.5x 12.6x 16.6x 5x 10x 15x 20x 500 1,000 1,500

1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q2013

Production volume Stripping Ratio

23

ABN Operational Performance

Production & Stripping Ratio

Thousand Tonnes

 Despite significant changes in coal market price, production grew 17 % YoY. ABN Operation in 1H2012 was impacted by higher mining SR and higher rainfall Operational advantage & focus

Short coal hauling distance 4km High Built Crusher Cap 10 mm ton/year Barge Loading Jetty Loading Speed of up to 1,800 ton/hour Under Pass: Capitalizing on Infra Strength

1 2 3 4

ABN

Key Highlights

TMU IM

PT Kutai Energi

24

IM Operational Performance

 IM operation was impacted by higher mining SR and lower level

• f equipment productivity from contractor

 IM appointed PT RPP Contractor Indonesia replacing SIS starting January 2013  IUPOP has been extended until 2023 Key Highlights Production & Stripping Ratio

Thousand Tonnes

Operational advantage & focus

Short coal hauling dist. < 5km CPP Ramp up to 6MM TPY Conveyor for TMU & Others Cross Border Mining with ABN

1 2 3 4

TMU ABN

PT Kutai Energi

291 394 378 347 190 236 265 272 278 10.1x 8.6x 8.9x 8.1x 14.6x 14.5x 13.1x 10.5x 11.2x 5x 10x 15x 250 500 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 Production volume Stripping Ratio Dump Distance(m) 2,809 2,822 2,530 2,550 2,564 2,547 2,1 79 2,1 78 1 ,724

25

TMU Operational Performance

Key Highlights Production & Stripping Ratio

Thousand Tonnes

Operational advantage & focus  TMU started pre-striping in 4Q 2011 until 2Q 2012. High level

• f rainfall caused higher stripping ratio

 Further drilling is expected to increase reserves. Our internal estimation expects additional reserves of approximately 7 million tons, hence totaling 15 million tons

Build ~16km Road to ABN Integrate CPP Ops with IM Exploration in West Block

1 2 3

ABN IM

PT Kutai Energi

39 23 59 85 90 84 24.5x 45.6x 14.4x 17.0x 10.8x 11.2x 10x 20x 30x 40x 50x 25 50 75 100 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 Production volume Stripping Ratio

26

Snapshot of Financial Performance – 1Q 2013 vs 1Q 2012

Notes (a) FOB vessel Costs: COGS, Selling Expenses excluding depreciation and amortization (b) 1Q 2013 Financials is unaudited

(a)

• Coal Production Volume

increased 17% QoQ mainly due to lower rainfall and better

• verall stripping ratio
• Sales Volume increased by 27%

due to increase in production volume and clearance of our 2012 ending inventory

• FOB vessel cash costs

decreased by 18% due to lower stripping ratio and shorter dumping distance

• EBITDA decreased by 38%

mainly due decrease in ASP of 23%

1Q 2012 1Q 2013 Change %

Operation Sales Volume million ton 1,1 1,4 27% Coal production million ton 1,1 1,3 17% Striping Ratio x 17,7 15,1

• 15%

NEWC Index US$/ton 114 93

• 18%

Financials Sales US$'000 97.563 94.942

• 3%

Gross Profit US$'000 21.077 14.389

• 32%

Operating Profit US$'000 14.061 7.742

• 45%

EBITDA US$'000 15.131 9.445

• 38%

Net Income US$'000 10.658 5.972

• 44%

Net Income after Minority Interest US$'000 5.100 3.210

• 37%

Ratio Gross Profit Margin % 21,6% 15,2%

• 30%

EBITDA Margin % 14,4% 8,2%

• 43%

Net Profit Margin % 11% 6%

• 42%

Per Ton Basis ASP US$/ton 86,5 66,2

• 24%

FOB Vessel Cash Cost US$/ton 67,1 55,1

• 18%

(a)

27

Debt and Cash Position

Net Debt Position

US$ Mn

Net Cash 2% 34% 6% 11% Net Cash Net Debt to Equity

28

CSR & Environmental Highlights 5

29

• Toba is continuously developing and implementing its corporate social responsibility programs

– Creating educational opportunities for local communities including renovating schools, training teachers, providing post-graduate educational assistance and creating a literacy program for adults and a scholarship program for school-aged children – Providing health services to the local communities – Helping groups of farmers plant crops of vegetables and bamboo and assisting with land rehabilitation – Creating local employment opportunities by sourcing some of the Company’s site workforce from the neighboring areas

Helping Farmers Plant Crops Creating Educational Opportunities Providing Health Services

Toba is Committed to Being a Responsible Corporate Citizen

30

Awards

Ernst & Young Social Entrepreneur of the Year 2011 East Kalimantan Green Proper Mining Award ABN East Kalimantan Blue Proper Mining Award Indomining

31

Appendix

32

• Current production capacity (31 December 2012):

– Crusher: 10 MM tonnes p.a. – Conveyor: 10 MM tonnes p.a.

• Produces two varieties of blended thermal coal

– ABN 52: Marketed CV(1) of 5,200 kcal / kg GAR – ABN 55: Marketed CV of 5,500 kcal / kg GAR – ABN 58 : Marketed CV of 5,800 kcal / kg GAR

• Substantially all of the owners of the land within ABN’s

concession area have been compensated and ABN has been granted the exclusive right to mine those areas

• Area: 2,990 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
• Type of license: IUPOP
• Expiry date: 1 December 2029
• Commencement of production: September 2008
• 2012 production: 4.4 MM tonnes
• Mining consultant: PT Runge Indonesia

ABN: Coal Concession Overview

IM TMU

ABN Jetty

ABN

Overview Operations Marketing

• Historically sold between 50%-100% of its annual production through

long-term (longer than 1 year) with coal trading companies – The remainder were sold on the spot market

Note:

• 1. Calorific value

33

• Current production capacity (31 December 2012):

– Crusher: 3.0 MM tonnes p.a. – Conveyor: 4.5 MM tonnes p.a.

• Produced one variety of blended thermal coal “Indomining”

with marketed CV(1) of 5,700 kcal / kg GAR in 2012 – May produce additional varieties of blended thermal coal in the future

• Has compensated the majority all of the owners of the land

within its concession area for their land and has been granted the exclusive right to mine those areas

• Area: 683 ha
• Location: Sanga-Sanga, Kutai Kartanegara, East Kalimantan
• Type of license: IUPOP
• Expiry date: 22 June 2013 (in the process of renewing its

IUPOP; expects to receive renewal confirmation through 2022 by end of 1st quarter 2013)

• Production commencement: August 2007
• 2012 production: 1 MM tonnes
• Mining consultant: PT SMG Consultants

IM: Coal Concession Overview

IM TMU

Overview Operations Marketing

• Historically sold approximately 50% of its annual production through

short-term (one year or shorter) contracts with coal trading companies – Clients include Glencore, Flame, Peabody, Dragon, Aempire

• The remainder are sold on the spot market

IM Jetty

Note:

• 1. Calorific value

ABN

34

• Current production capacity (31 December 2012):

– Crusher: 1.4 MM tonnes p.a.

• Produces one variety of blended thermal coal “Trisensa-

47”, with marketed CV(1) of 4,700 kcal / kg GAR – May produce additional varieties of blended thermal coal in the future

• Area: 3,414 ha
• Location: Loa Janan, Muara Jawa and Sanga-Sanga,

Kutai Kartanegara, East Kalimantan

• Type of license: IUPOP
• Expiry date: 14 December 2023
• Commencement of production: October 2011
• 2012 coal production: ~257,000 tonnes
• Mining consultant: Marston & Marston

TMU: Coal Concession Overview

Overview Operations & Marketing

Note:

• 1. Calorific value

Jetty NDM

Planned haul road and jetty (17 km)

IM ABN TMU

Sungai Sangasanga Sungai Dondang Pulau Seribu

Jetty KE

Planned haul road to ABN and IM (25 km)