Conference Call Q3 Results 17 November 2015 - Jakarta Christian - - PowerPoint PPT Presentation

▶
conference call q3 results
SMART_READER_LITE
LIVE PREVIEW

Conference Call Q3 Results 17 November 2015 - Jakarta Christian - - PowerPoint PPT Presentation

Nov 12, 2023 545 likes •709 views

Conference Call Q3 Results 17 November 2015 - Jakarta Christian Kartawijaya, CEO Tju Lie Sukanto, CFO Market Growth January - September 2015 (Source: ASI data) In September, demand increased by 0.6%, with highest growth achieved by

slide-1
SLIDE 1

Conference Call Q3 Results

17 November 2015 - Jakarta

Christian Kartawijaya, CEO Tju Lie Sukanto, CFO

slide-2
SLIDE 2

Market Growth – January - September 2015

(Source: ASI data)

  • In September,

demand increased by 0.6%, with highest growth achieved by SK with 54.6%

  • SG grow in

Java, Kalimantan, and Nusa Tenggara by 6.1%, 5.3%, and 24.8 respectively

  • Jan-Sep market

growth is 0.3%

  • Based on total

cement supply vs total market size in 2014 (including non ASI member & import) , the market in Sep is still -4.3% & YTD Sep is

  • 4.4%

Slide 2 - 17 November 2015 Conference Call Q3 Results

slide-3
SLIDE 3

Market development per region of Jan - Sep 2015

Market Growth:

10-15%

5-10% <5%

15-20% >20%

Slide 3 - 17 November 2015 Conference Call Q3 Results

slide-4
SLIDE 4

Market shows first signs of recovery

 Positive market development in Q3  Clear indication that infrastructure spending has picked-up and trend is expected to continue

13,576 14,259 13,745 16,427 14,076 14,868 14,050 16,916 13,626 14,088 15,411 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000

Jan-Mar Apr-Jun Jul-Sep Oct-Dec 2013 2014 2015

Source: ASI, incl. imports

+9%

ASI includes data from new members of Merah Putih and Juishin starting in 2015

In thousand tons

Market sales development

Slide 4 - 17 November 2015 Conference Call Q3 Results

slide-5
SLIDE 5

Indocement sales development in line with our strategy

Continued trend of lower sales volume development than market development

  • Margin orientation
  • New market players
  • Capacity share

Domestic Sales

in ‘000 tons

FY Domestic Sales 2013: 17,975 m tons +0.5% 2014: 18,499 m tons +2.9%

Export Sales

in ‘000 tons

Exports still significantly lower than domestic sales

  • Potential for more exports in

low demand periods

3,000 3,500 4,000 4,500 5,000 5,500 Jan-Mar Apr-Jun Jul-Sep Oct-Dec 2013 4,219 4,514 4,187 5,054 2014 4,296 4,676 4,226 5,301 2015 3,947 4,300 3,965 10 67 106 34 17 26 78 35 21 52 74 20 40 60 80 100 120 Jan-Mar Apr-Jun Jul-Sep Oct-Dec 2013 2014 2015

FY Export Sales 2013: 217 t tons 2014: 156 t tons

Slide 5 - 17 November 2015 Conference Call Q3 Results

slide-6
SLIDE 6

The importance of bulk sales increases

 Strong concrete demand expected due to Government infrastructure spending  Indocement positions itself as a reliable partner for infrastructure projects providing quality bulk cement and concrete at timely delivery

 Stronger focus on increasing bulk sales  High bulk volume in Jakarta  Indocement benefits from proximity to Jakarta

10,447 10,472 9,293 2,474 2,726 2,890 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2013 2014 2015 Bag Bulk 24%

76%

19%

81%

21%

79% In thousand tons

Bag/bulk sales composition Jan - Sep

Slide 6 - 17 November 2015 Conference Call Q3 Results

slide-7
SLIDE 7

Java gains in significance in delivering strong results

 Very high logistics cost in Indonesia due to underdeveloped infrastructure  Port congestion limits flexibility on timely delivery  Truck delivery exposed to road congestion and train delivery subject to limited capacity available

72% 72.8% 74.0% 74.8% 28% 27.1% 26.0% 25.2%

23% 24% 25% 26% 27% 28% 29% 70% 71% 72% 73% 74% 75% Jan-Dec '14 Jan-Mar '15 Apr-Jun '15 Jul-Sep '15 Java (LHS) Outside Java (RHS)

 Increased focus on nearby markets  higher margin Geographic composition of Sales

Slide 7 - 17 November 2015 Conference Call Q3 Results

slide-8
SLIDE 8

Financial Result

Consolidated Statement of Comprehensive Income

January to September 30, 2015 January to September 30, 2014 in IDR mio in IDR mio in IDR mio in % (Restated) Net Revenues 12,886,170 14,166,879 (1,280,709)

  • 9.0%

Cost of Revenues

  • 7,134,084
  • 7,804,571

670,487

  • 8.6%

Gross Profit 5,752,086 6,362,308 (610,222)

  • 9.6%

% of Net Revenues 44.6% 44.9% Operating Expenses

  • 2,105,764
  • 2,287,107

181,343

  • 7.9%

Other Operating Income 45,208 75,695 (30,487)

  • 40.3%

Operating Income 3,691,530 4,150,896 (459,366)

  • 11.1%

% of Net Revenues 28.6% 29.3% EBITDA 4,384,454 4,798,258 (413,804)

  • 8.6%

% of Net Revenues 34.0% 33.9% Finance Income 437,384 613,208 (175,824)

  • 28.7%

Equity in net earnings of associated companies - net 19,057 17,229 1,828 10.6% Income before Income Tax 4,147,971 4,781,333 (633,362)

  • 13.2%

Income Tax Expense - Net

  • 929,562
  • 1,049,588

120,026

  • 11.4%

Income for the Period 3,218,409 3,731,745 (513,336)

  • 13.8%

% of Net Revenues 25.0% 26.3% Variance

Slide 8 - 17 November 2015 Conference Call Q3 Results

slide-9
SLIDE 9

Stable outlook for margins until year end

 Stable margins despite challenging market environment

  • Operational Excellence program
  • Fix cost reduction program
  • Managing efficient kiln utilization

31.7% 33.8% 33.9% 34.3% 34.8% 34.5% 34.0% 30.0% 31.0% 32.0% 33.0% 34.0% 35.0% 36.0% Jan-Mar Jan-Jun Jan-Sep Jan-Dec 2014 2015

EBITDA margin development  New market entrants leading to higher competition and pricing pressure  High volatility of Rupiah in last quarter

43.9% 44.3% 44.9% 44.5% 45.0% 44.6% 35.0% 37.0% 39.0% 41.0% 43.0% 45.0% 47.0% Jan-Mar Jan-Jun Jan-Sep 2014 2015

Gross margin development

Slide 9 - 17 November 2015 Conference Call Q3 Results

slide-10
SLIDE 10

Stable manufacturing cost until year end expected

 Fuel and power positively impacted by lower coal price and by running the most efficient kilns in 2015 but negatively impacted from weakening Rupiah and higher electricity price after significant increase starting May last year  Further cost pressure is expected from Rupiah devaluation  Future operation of new kiln P14 in 2016 will provide a significant potential on improving manufacturing cost Fuel and Power composition in %

Composition of Manufacturing cost as %

25.8 9.9 43.6 20.7 26.0 10.3 43.1 20.6 5 10 15 20 25 30 35 40 45 50

Raw Materials Direct labor Fuel and Power Man. Overhead

Jan-Sep 2014 Jan-Sep 2015

Trend

59.7 53.0 40.3 47.0

  • 20.0

40.0 60.0 80.0 100.0 120.0 Jan-Sep 2014 Jan-Sep 2015 Fuel Power

Slide 10 - 17 November 2015 Conference Call Q3 Results

slide-11
SLIDE 11

Balance Sheet

Consolidated Statement of Financial Position

September 30, 2015 December 31, 2014 in IDR mio in IDR mio in IDR mio % Assets Current Assets 11,468,345 16,086,773 (4,618,428)

  • 29%

Non-current Assets 14,461,430 12,797,862 1,663,568 13% Total Assets 25,929,775 28,884,635 (2,954,860)

  • 10%

Liabilities and Equity Current Liabilities 2,075,400 3,260,559 (1,185,159)

  • 36%

Non-current Liabilites 1,072,967 1,047,063 25,904 2% Total Liabilities 3,148,367 4,307,622 (1,159,255)

  • 27%

Equity attributable to Owners of the Partent Entity 22,781,408 24,577,013 (1,795,605)

  • 7%

Non-controlling interest

  • Total Equity

22,781,408 24,577,013 (1,795,605)

  • 7%

Total Liabilites and Equity 25,929,775 28,884,635 (2,954,860)

  • 10%

Variance

Slide 11 - 17 November 2015 Conference Call Q3 Results

slide-12
SLIDE 12

Projects

  • 1 brownfield project with capacity of 4.4 million tons with an overall investment

value of IDR 5.5 to 6.5 trillion

  • In Citeureup, 1 unit of an Aero Derivative Gas Turbine (ADGT) providing 62 MW

electrical power; remaining exhaust energy will be channeled into a 11 MW steam turbine with competitive power cost (planned to finish by Q3 2016)

  • 2 greenfield projects with the capacity of 2.5 million tons per plant, one in Central

Java and one outside Java

Capacity and Power expansion to participate in Industry Growth

  • Strategically well positioned to capitalize on further demand

16.6 30-33 17.1 18.6 20.6 25

2005 2007 2010 2014 2016 2020/2025

Million Tons

+ 0.6 mt + 1.5 mt + 1.9 mt + 4.4 mt + 5-8 mt

Slide 12 - 17 November 2015 Conference Call Q3 Results

slide-13
SLIDE 13

Outlook year-end 2015

 National market 2015 estimated to grow flat to -2% if current trend continues  A strong Q4 market growth and market volume is expected  Clear indication infra structure spending has picked-up and trend will continue  Changing market environment under over-supply situation and after new cement players are entering the market  Stabilizing pricing environment in Q4 is expected  Possible further cost pressure from Rupiah devaluation but setting off with lower electricity costs  Continued focus on margin stabilization by focusing the higher margin market and strict fixed cost reduction measures in all our business line  Proceeding with the finalization of our efficient and newest technology of P14 project by beginning of 2016 providing potential savings  Reduction in Capex spending in non-core areas

Slide 13 - 17 November 2015 Conference Call Q3 Results

slide-14
SLIDE 14

Outlook for 2016

 National market 2016 estimated to grow about 3%-5%  Strong concrete and bulk cement demand anticipated due to Government's infra projects

− Secured our concrete market by having good andesit quarry and sand supply from Ketapang and Belitung by signing exclusive LT supply contract with local partners

 Several new market players expected to enter the market  Possible price pressure in weak quarters but stabilizing trend in stronger months  Commodity prices expected to stay at current level but further weakening of Rupiah anticipated  P14 will be ramped up quickly to capitalize on cost savings  Clinker exports will be done in low demand periods  Lower Capex spending due to finalization of our brownfield project P14  Strong balance sheet with no gearing provides sufficient headroom for leading the market well especially in our home market

Slide 14 - 17 November 2015 Conference Call Q3 Results

slide-15
SLIDE 15

Thank you!