Corporate Presentation June 2017 1 Overview of Sahakol Equipment - - PowerPoint PPT Presentation

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Corporate Presentation June 2017 1 Overview of Sahakol Equipment - - PowerPoint PPT Presentation

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Corporate Presentation June 2017 1 Overview of Sahakol Equipment Public Company Limited (SQ) The leading mining contractor with well-established track record in Thailand and Laos The first Thai open-pit lignite mining contractor in 1983

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Corporate Presentation

June 2017

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Overview of Sahakol Equipment Public Company Limited (“SQ”)

 The first Thai open-pit lignite mining contractor in 1983  Integrated mining service company focusing on mega mining projects including mine planning

and logistic solutions, open pit mining operation, heavy duty machine leasing, rental and maintenance services Our Business

 Highly experienced management and operational team with over 30 years of

experiences

 Over 1,000 staff including over 45 engineers

Our Team

 Thailand: Mae Moh Phase 7 and 8  Laos: Hongsa Mine Phase D

Myanmar : Henda Tin Mine (Q4/2017) Our Operation

 Secured backlog with remaining project value of THB 37,572 million for the next 10

years (as of March 2017) Our Backlog

 Sirison Family (Management): 28.4%  Areekul Family: 18.2%  Others: 53.4%

Our Shareholders

The leading mining contractor with well-established track record in Thailand and Laos 2

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Long-term prospect for coal mining for national power supply based on PDP 2015

Most Competitive Player in a Favorable Market

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Mining Contractor is a Favorable Niche Market!

  • Market Size: > 120,000 Million Baht
  • Only 2 Notable Players
  • High Barrier to Entry
  • Need Large Capital Investment
  • Need Proven Track Records

and Mining Specialists Teams

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Stable Revenue via Long-Term Contract with Credible Sponsors

Long-term contract commitments with transparent price structure provide stable and recurring revenue for coming years

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Stable Revenue Improving EBITDA Margin

613 648 557 683 1,169 34% 34% 34% 37% 40% 0% 10% 20% 30% 40% 50% 200 400 600 800 1,000 1,200 1,400 1,600 2012 2013 2014 2015 2016

EBITDA % EBITDA (RHS)

1,736 1,841 1,585 1,445 1,238 247 731 74 56 29 30 25

500 1,000 1,500 2,000 2,500 3,000 2012 2013 2014 2015 2016

2,891

THB mm THB mm %EBITDA

1,810 1,898 1,614 1,868

Hongsa MM8 MM7 & 7/1 Others

897

146

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Stable Revenue via Long-Term Contract with Credible Sponsors

Highly Visible Backlog with over THB 37 bn for the Next 10Years

2 2,079 10,541 21,281 3,672 37,572

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 MM7 Hongsa (Lao PDR) MM8 Tin mine Total as of Q1/2017 THB.m

Y 2015-2026 Y 2016-2025 Y 2017-2024 Y 2009-2020 5

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Stable Revenue via Long-Term Contract with Credible Sponsors

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Credible Counterparties Supported by Respective Government Highly credible sponsor

Thailand Laos

  • Thai’s

State Owned Enterprise (SOE) that is responsible for national power generation

  • Highest revenue among non-listed

SOEs

  • Similar credit rating to Thailand by

S&P Hongsa Power shareholders are:

  • Banpu Power which is held by

BANPU (Thai listed company)

  • RATCH subsidiary of EGAT
  • Lao

Holding State Enterprise (LHSE) a state owned enterprise solely owned by Lao’s government, represented by Lao’s Ministry of Finance

SOE/ Government Related Entities

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Highly Experienced Management and Operational Team with Proven Track Record

Management and Operational Team with Extensive Experiences in Mining Industry

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  • Mr. Somboon Maneenawa

Chairman of the Board

  • Past experience:

−EGAT Governor (1992-1995)

  • Mr. Sasavat Sirison

Chief Executive Officer

  • Over 28 years of experience with SQ
  • Mr. Vitavat Sirison

Chief Operation Officer

  • Over 23 years of experience with SQ
  • Mr. Pavat Sirison

Chief supply chain manager

  • Over 10 years of experience with SQ
  • Mr. Kavit Sirison

Chief Financial Officer

  • Director of Microfinance Strategy Development department at

Ministry of Finance (2010-2012)

  • Mr. Nopphan Muangkote

Chairman of Executive Committee

  • Director at International Business Lawyers Co., Ltd. and PF

Controls Group Ltd (Present)

  • Independent Director at AEONTS, AMATA and Charoensin

Property Co., Ltd. (Present)

  • Mr. Ouychai Klaitubtim

Mae Moh Director

  • Over 40 years of experience in mining industry
  • Mr. Vitoon Chinwanichai

Hongsa Director

  • Over 30 years of experience in mining industry
  • Mr. Jaturaporn Boonyasatit

Executive Committee member

  • Over 45 years of experience in mining industry
  • Over 35 years of experience with SQ
  • Mr. Sarin Wannalee

Executive Committee member

  • Over 29 years of experience with SQ
  • Over 35 years of experience in mining industry
  • Mr. Chatree Keatkongkeaw

Project manager

  • Over 29 years of experience in mining industry
  • Over 19 years of experience with SQ
  • Mr. Pornpong Chaijaroen

Project manager

  • Over 26 years of experience in mining industry

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Promising Growth From Continuing Projects

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High visibility of future project in existing territories There are continuing projects for sites that SQ currently operates in (i.e. Mae Moh mine and Hongsa mine) which are visible projects SQ targets to bid

Project Project Year Total Production

  • Phase 9

2019 – 2030 467 m BCM

  • Phase 10

2026 – 2037 Approx. 460 m BCM

Mae Moh Mine

Project Bidding Year Total Production

  • Phase G

2019 190 m BCM

Hongsa Mine

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SLIDE 9

Customers Estimated Market Value (MB.) Existing Customers

  • EGAT ( Mae Moh)
  • BPP ( Hongsa Power)

> 120,000 Million baht New Projects

  • Myanmar Tin (Dawei)
  • New Mining Projects in Thailand,

Myanmar, Laos etc. > 50,000 Million Baht

Mining Market Value

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Backlog Overview

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2,079 10,541 21,281 3,672 37,572

5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 MM7 Hongsa (Lao PDR) MM8 Tin mine Total as of Q1/2017 THB.m

Y 2015-2026 Y 2016-2025 Y 2017-2024

Backlog Overview

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Contract Counter Parties : EGAT / ITD-SQ Project Duration : November 2008 – April 2020

Mae Moh 7 Backlog

Scope of Works Contract Volume Contract Value (THB mm) SQ’s Backlog (end of 2016) SQ’s Backlog (end of Q1/2017) Volume Value (THB mm) Volume Value (THB mm) Job 1 Soil excavation and transportation Job 2 Coal excavation and transportation Job 3 Soil transportation (excavation by EGAT) 365.0 m.BCM 50.0 m.tons 40.0 m.BCM 18,602 2,463 842 42.7 m.BCM 5.0 m.tons

  • m.BCM

1,981 243 99 38.0m.BCM 5.0 m.tons

  • m.BCM

1,753 232 94 21,906 2,323 2,079

365 98 133.7

200 400 Total Performed prior to 2012 Joint Operation (Full scope)

Job 1: Soil excavation (m.BCM)

50 11 16.8

20 40 60 Total Performed prior to 2012 Joint Operation (Full scope)

Job 2: Coal excavation (m.tons)

40 5 8.3

20 40 60 Total Performed prior to 2012 Joint Operation (Full scope)

Job 3: Soil excavation by EGAT (m.BCM)

Mae Moh 7 Hongsa Project Mae Moh 8

13.7 27.0 41.4 69.2 91.0 95.7 95.7 38.0 50 100 150 2012 2013 2014 2015 2016 Q1/2017 Backlog

Cumulative Actual Backlog

0.4 3.6 7.1 8.3 8.3 0.0 5 10 15 2012 2013 2014 2015 2016 Backlog

Cumulative Actual Backlog

  • None -

2.7 5.4 7.6 10.0 11.8 11.8 11.8 5.0 5 10 15 20 2012 2013 2014 2015 2016 Q1/2017 Backlog

Cumulative Actual Backlog

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Mae Moh 8 Backlog

Scope of Works Contract Volume Contract Value (THB mm) SQ’s Backlog (end of 2016) SQ’s Backlog (end of Q1/2017) Volume Value (THB mm) Volume Value (THB mm) Job 1 Soil excavation and transportation Job 2 Coal excavation and transportation 375.0 m.BCM 31.0 m.tons 21,641 1,230 365.4 m.BCM 31.0 m.tons 20,598 1,230 361.0 m.BCM 31.0 m.tons 20,051 1,230 22,871 21,828 21,281

Job 1: Soil excavation (m.BCM) Job 2: Coal excavation (m.tons)

1.4 9.6 14.0 361.0

2015 2016 Q1/2017 2018 2019 2020 2021 2022 2023 2024 2025 Backlog

Cumulative Actual Cumulative Planned Backlog

31.0

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Backlog

Cumulative Planned Cumulative Actual / Backlog

Contract Counter Parties : EGAT / SQ Project Duration : January 2016 – December 2025

Mae Moh 7 Hongsa Project Mae Moh 8 13

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Hongsa Project Overview

Total Coal Resource : Approx. 577.4 m.tons Potential Future Projects:

  • During 25 years of its concession, Hongsa Power (HPC) requires services for the excavation of soil

and coal of 1,250 m.BCM and 370.8 m.tons, respectively

  • Of which, the excavation of 437 m.BCM soil and 205.6 m.tons coal are yet being awarded.

Dumping Area Dumping Area

Mining Area

Hongsa Power Plant Hongsa Mine Planning Existing Capacity Coal Usage : approx. 14 m.tons/ year

Installed Capacity (MW) Utilized Capacity (MW) 1 626 551 2 626 551 3 626 551 Total 1,878 MW 1,653 MW

Mae Moh 7 Hongsa Project Mae Moh 8 14

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Contract Counter Parties : HPC / SQ Project Duration : June 2015 – December 2026

Hongsa Project Backlog

Scope of Works Contract Volume Contract Value (THB mm) SQ’s Backlog (end of 2016) SQ’s Backlog (end of Q1/2017) Volume Value (THB mm) Volume Value (THB mm) Job 1 Soil excavation and transportation Job 2 Coal excavation and transportation 207.0 m.BCM 82.5 m.tons 8,481 3,262 186.5 m.BCM 79.6 m.tons 7,624 3,140 182.9 m.BCM 78.7 m.tons 7,447 3,094 11,743 10,764 10,541

Job 1: Soil excavation (m.BCM) Job 2: Coal excavation (m.tons)

6.0 20.5 24.1 182.9

2015 2016 Q1/2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Backlog

Cumulative Planned Cumulative Actual Backlog

2.9 3.8 78.7

2015 2016 Q1/2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Backlog

Cumulative Planned Cumulative Actual Backlog

Mae Moh 7 Hongsa Project Mae Moh 8 15

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Financial Highlights

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Total Revenues (THB.m)

Key Financial Highlights – Stable Revenue with EBITDA Margin Growth

Stable revenue with promising growth from new project acquisition

  • Secured long-term revenues (9-10 years/contract) from reputable counterparties, namely, EGAT and Hongsa Power

1,736 1,841 1,585 1,445 1,238 342 245 247 731 178 223

  • 146

897 154 547 74 56 29 30 25 7 4 500 1,000 1,500 2,000 2,500 3,000 3,500 2012 2013 2014 2015 2016 Q1/2016 Q1/2017

1,019 2,891

Hongsa MM8 MM7 & 7/1 Others

681 1,868 17

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Profits (THB.m)

Key Financial Highlights – Stable Revenue with EBITDA Margin Growth

501 480 381 490 828 191 395 613 648 551 680 1,169 286 453 101 141 49 89 323 71 226

33.9% 34.1% 34.5% 36.6% 40.4% 42.0% 44.5% 6% 7% 3% 5% 11% 10% 22% 27.7% 25.3% 23.6% 26.2% 28.6% 28.1% 38.8% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

  • 25

175 375 575 775 975 1,175 1,375 2012 2013 2014 2015 2016 Q1/2016 Q1/2017

Gross Profit EBITDA NI

THB.m %GP %EBITDA %NI

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Annual Operating Trends

Net Profit (THB.m) 2015 2016

Q1/2017

Net Profit before tax 121.18 422.48 280.20 Less : Extra ordinary items

  • Provision for impairment of asset held for sale

26.00 22.87

  • Share base payment

16.10

  • Write off Tax deducted at source

18.33

  • Loss on exchange rate on FW contract

23.88 Normalized Net Profit before tax 179.48 448.48 303.07 % of Revenue 9.61% 15.51% 29.74% Description

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2,867 2,749 4,489 6,004 6,042 2,527 2,360 3,749 3,753 3,561 340 389 740 2,251 2,482

5.65 3.72 3.00 1.12 0.95 2.96 2.60 3.25 2.15 1.30 0.83 0.73 1.38 2.59 2.67 (14) (9) (4) 1 6 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

2013 2014 2015 2016 Q1/2017

Assets Liabilities Shareholder's Equity IBD/Equity IBD/EBITDA DSCR 1.IBD/Equity ≤ 2 2.IBD/EBITDA ≤ 4 3.DSCR ≥ 1.2

Financial Covenant Assets, Liabilities and Shareholder’s Equity / Liquidity

times THB.m

Key Financial Highlights

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Key Financial Highlights

4.6% 1.8% 2.5% 6.2% 15.0% 21.8% 20.8% 20.6% 26.2% 38.1%

  • 10%

0% 10% 20% 30% 40% 50%

2013 2014 2015 2016 2017

Return on Assets Return on Fixed Assets

Operating Performance

Note: * Annualized net profit to calculate key ratios for 1Q2017

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Business Outlook 2017-2020

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CLMVT Mining Market

Laos Coal Mines, Gold Mines, Copper Mines Myanmar Tin Mines Coal Mines Vietnam Coal Mines Cambodia Coal Mines Thailand Mae Moh Phase 9, Potash Mine

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Mae Moh Mine Planning Mae Moh Power Plant

Remaining Coal Resource : Approx. 300 million tons Potential Future Projects: Existing Capacity Coal Usage : approx. 15 mil. tons/ year

Units Installed Capacity 4 – 7 4 x 150 MW 8 – 13 6 x 300 MW Total 2,400 MW Project Description Bid Open Project Duration Phase 9

  • Soil excavation 460 million BCM

2017 2019 – 2030 Phase 10

  • Soil excavation 490 million BCM*

2024 2026 – 2037 Phase 11

  • Soil excavation 490 million BCM*

2027 2029 – 2045

Mae Moh Project Overview

Mae Moh 7 Hongsa Project Mae Moh 8

* Estimated

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Mae Moh Phase 9

Bidding Announcement for Mae Moh Phase 9

Content Detail Scope of works Working Item 1 Soil Excavation and Transportation are approx. 467 Million BCM Working Item 2 Coal Excavation and Transportation are approx. 35 Million tons. Working Item 3 Soil Transportation (EGAT portion) are approx. 35 Million BCM Standard price from TOR Present Value : PV is 40,200 Million baht Working period 10 years ( year 2019 – 2028) Bidding date 15 August 2017

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Potential Project Bidding Year Total Production Phase G 2019 190 MBCM

Hongsa project : Lao PDR

Total Coal Resource : Approx. 577.4 m.tons Potential Future Projects:

  • During 25 years of its concession, Hongsa Power (HPC) requires services for the excavation of soil

and coal of 1,250 m.BCM and 370.8 m.tons, respectively

  • Of which, the excavation of 437 m.BCM soil and 205.6 m.tons coal are yet being awarded.

Dumping Area Dumping Area

Mining Area

Existing Capacity Coal Usage : approx. 14 m.tons/ year

Installed Capacity (MW) Utilized Capacity (MW) 1 626 551 2 626 551 3 626 551 Total 1,878 MW 1,653 MW

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SQ is No. 1 Mining Contractor with only one competitor

CLMV Market

Myanmar Cambodia Vietnam laos

Myanmar

  • Tin Mines
  • Coal Mines

Laos

  • Coal Mines
  • Copper Mines
  • Gold Mines

Cambodia

  • Coal Mines

Vietnam

  • Coal Mines

Estimated Size : 100,000 MB.

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Project Project Value Project Duration Phase 1: Tin Concentrate 3,672 THB mm 2017 - 2024

Tin Mine : Myanmar

Expect to operate the project in Q4/2017

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Summary

  • SQ has Secured Backlog of 37,500 Million Baht
  • SQ to start Myanmar Tin Mine Project in Q4/2017
  • SQ is preparing to bid New Project : Mae Moh 9,

Value at Over 40,000 Million Baht

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