PUBLIC EXPOSE PT Indika Energy Tbk. 26 April 2018 Term and - - PowerPoint PPT Presentation

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PUBLIC EXPOSE PT Indika Energy Tbk. 26 April 2018 Term and - - PowerPoint PPT Presentation

45 Tahun #KerjaMembangunBangsa PUBLIC EXPOSE PT Indika Energy Tbk. 26 April 2018 Term and conditions This presentation material has been prepared by Indika Energy Tbk. (the Company) to support its Public Expose. Individuals who receive


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PUBLIC EXPOSE

PT Indika Energy Tbk.

26 April 2018

45 Tahun #KerjaMembangunBangsa

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Term and conditions

This presentation material has been prepared by Indika Energy Tbk. (“the Company”) to support its Public Expose. Individuals who receive this material or participate in this meeting or discussion, agree not to reproduce them in any form whatsoever, anywhere, and it is prohibited to use any of the material contained in these materials in an unofficial capacity or to publish them. In addition, the information contained in these materials may contain forward-looking statements that reflect the Company’s current beliefs, taking into consideration future events and financial performance. These beliefs are based on estimates and actual assumptions on the subjects of business, the economy and competitive uncertainty which may change from time to time and in certain cases are outside of the control of the Company and its Director. No guarantee can be given that these future events will take place, or that projects will be achieved,

  • r that the assumptions of the Company are correct. The actual results may differ materially from predictions and projections.

This material is not an offer or request related to purchases or sales of any type of financial instrument. There is no representation or guarantor, whether expressly stated or implied, in relation to the accuracy, completeness or reliability of the information contained in this material, nor can this material be regarded as a complete statement or summary of the growth of the capital market. This material may not be the basis of consideration for the recipient to perform any act of purchase or sale of any type of financial instrument, Any opinion contained in this material may be amended from time to time without prior notice and may differ or even run contrary to the

  • pinion of other business sectors or business groups of the Company as a result of using different assumptions and criteria.
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1 2

Indika Energy’s Performance Turnaround 2017 Financial and Operational Review

3

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Indika Energy, 45 years contributing to Indonesia

1972 1973 1982 1993 1994 1995 1998 2002 2011 2012 2014 2010 2016 2017 2009 1989 1991 2007 2000 2005

Oil and gas Tripatra’s Arun project Oil and gas Inception of Petrosea Coal mining Inception of Kideco Logistics Inception of Kuala Pelabuhan Indonesia Energy Inception of Indika Energy Petrosea’s Babo airstrip upgrade in Papua Infrastructure Inception of Tripatra Oil and gas Petrosea’s Timika Airstrip Infrastructure Petrosea’s Pagerungan Besar Gas Field Oil and gas Inception of Multi Tambangjaya Utama Coal mining Inception of Cirebon Electric Power - the first internationally tendered power project after Asian financial crisis Power MBSS be the 1st company to implement dispatch and demurrage clause Shipping Inception of Mitrabahtera Segara Sejati Shipping Logistics Inception of POSB

2008

Energy IPO of Indika Energy Tripatra’s Banyu Urip - Cepu EPC1 Oil and gas Tripatra’s Senoro LNG Oil and gas CEP 1 inauguration - enviro-friendly supercritical technology Power Tripatra’s Jangkrik development project Oil and gas Inception of Indika Logistics Logistics Petrosea’s inauguration as one of Bonded Logistic Center (PLB) Logistics Tripatra’s Tangguh LNG expansion project Oil and gas Expansion of Petrosea’s bonded logistics center in Papua Logistics Tripatra’s Gunung Salak geothermal project Renewable Inception of Indika Foundation

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Indonesia’s leading integrated energy company

*Companies within Indika Energy Group being mentioned on this slide are non-exhaustive

Energy Services Energy Infrastructure Energy Resources PT Indika Energy Tbk. 1 2 3

  • 3rd largest coal producer and one of the

lowest cost coal producers

  • Resources 1,375mt, reserves 422mt
  • 91% ownership
  • Bituminous thermal and coking coal reserves
  • Resources 75.2mt, reserves 40.6mt
  • 85% ownership
  • Bituminous, sub-bituminous and thermal coal

reserves

  • 34.9% ownership
  • Coal trading volume 7.0mt
  • Major integrated coal transport and logistics

services company

  • Long-term relationships with top Indonesian

coal producers

  • 51% ownership
  • 660MW independent power plant in
  • perations - 20% ownership
  • 1000MW to be completed by 2020 – 6.25%
  • wnership
  • Enviro-friendly supercritical technology
  • Offshore Supply Base
  • Over 90% berth and 100% occupancy ratios
  • Established since 1973
  • Leading EPC and O&M services in oil & gas

and power plant development

  • 100% ownership
  • Established since 1972
  • Major coal contract miner with E&C mining

capabilities

  • 69.8% ownership
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Indika Energy Group companies cover end-to-end coal business value chain

Proven track record Professional integrity Local know-how International partners Overburden removal Port services Production All-weather hauling Barging & shipping End-use in power plant Crushing Resources ownership

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Indika Energy Group companies cover end-to-end coal business value chain

*Companies within Indika Energy Group being mentioned on this slide are non-exhaustive

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Coal prices started to rebound in 2016 and remain mostly in the range of US$90-100 per ton in early 2018

Source: Platts & US Energy Information Administration

USD/ton USD/barrel

68.4 95.6

19 Apr 2018 US$/ton US$/barrel WTI Crude Oil Price Newcastle Coal Price Index 70 140 2010 2011 2012 2013 2014 2015 2016 2017 2018

2011 Average US$ 121.3/ton US$ 94.9/ltr 2012 Average US$ 97.7/ton US$ 94.1/ltr 2013 Average US$ 84.9/ton US$ 98.0/ltr 2014 Average US$ 70.36/ton US$ 93.2/ltr 2010 Average US$ 99.2/ton US$ 79.7/ltr 2015 Average US$ 58.0/ton US$ 48.7/ltr 2016 Average US$ 61.8/ton US$ 43.3/ltr 2017 Average US$ 88.4/ton US$ 50.8/ltr

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Kideco’s additional 45% stake acquisition brought Indika Energy to a different scale

  • Previous ownership of 46% (41% since 2004, additional 5% since 2006)
  • Additional 45% in 2017
  • 40% from Samtan Co. Ltd.
  • 5% from Muji Inti Utama

Indika Energy acquired 45% additional stake of Kideco, now total 91%

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Our bonds issuance in 2017 demonstrated solid external recognition for trust and credibility

Issuance of US$575 million Senior Notes

  • US$575 million Senior Notes

− Coupon interest 5.875% with re-offer yield 6.125% − 7NC4: 7-year tenor (due in 2024), non-callable for 4 years

  • The biggest amount and at the same time the

lowest coupon/yield ever issued by Indika Energy since 2007

  • The lowest ever coupon for a mining company in

Indonesia

  • The lowest ever 7-year mining bond in Asia

THE BEST HIGH YIELD BOND The Asset Regional Awards 2017

“One of the largest demand for Indonesian high yield corporate in 2017, helps facilitate the transformation of Indika Energy’s credit profile with a rating upgrade from Moody’s Investors Service” The Asset

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International agencies also upgraded their ratings as a reflection of improvement in the company's operating profile

12 December 2017

Upgrade to B+ with outlook positive

  • Expectations of improvement in Indika

Energy's credit profile following the acquisition of an additional stake in Kideco

  • Expectations of the flexibility available to

Indika Energy to address its lumpy debt maturities

12 December 2017

Upgrade to Ba3 with outlook stable

  • Expectations of improvement in Indika Energy's
  • perating profile as it now controls the steady

cash flow generation at Kideco

  • Indika Energy's stronger credit metrics in

2018-2019 with consolidated leverage of around 3.4x-3.6x

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After 4 years of losses, turnaround initiatives resulted in positive performance in 2017

US$ million

Revenues

863 1,110 1,097 775 1,099 2013 2014 2015 2016 2017 6.2% US$ million

Net Profit After Tax

US$ million

Core Profit

  • 28
  • 9
  • 39
  • 43

94

  • 62
  • 28
  • 45
  • 68

335 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

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Over the last 2 years, INDY share price jumped 34X

INDY Historical Share Price

2014 – April 2018

IPO: Rp 2,950 (11 June 2008) Highest: Rp 5,400 (4 January 2011)

500 1,000 1,500 2,000 2,500 3,000 3,500

2014 2015 2016 2017

Latest: Rp 3,660 (20 Apr 2018) Lowest: Rp 106 (12 Jan 2016)

+34X

In the last 27 months

4,000 4,500 5,000

2018

INDY reentered LQ45 in Feb 2018

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Recently we also invest to build a terminal to store fuel products in Kariangau, East Kalimantan

  • KGTE will build, own and operate a terminal to store and deliver fuel products and associated services

in East Kalimantan, for the exclusive use of ExxonMobil

  • Contract will be valid for 20 years, with an option for a 10-year extension
  • Estimated investment value of US$ 108 million
  • Groundwork is expected to start in the second half of 2018

Indika Energy, through subsidiary company Kariangau Gapura Terminal Energi (KGTE), will invest US$ 108 million to build a terminal to store fuel products in Kariangau, East Kalimantan

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All those are built on strong values in all of our business conduct

INTEGRITY

Honest with oneself, others and one’s work at every moment by upholding prevailing ethical standards and legal norms

ACHIEVEMENT

Achievement as the measure of success and the motivation to do what is best for the company

UNITY IN DIVERSITY

Viewing diversity as an asset to the company and accepting, valuing, completing and strengthening one another as a solidly unified entity

TEAMWORK

Actively contributing and collaborating based on trust and shared interests rather than personal interests

SOCIAL RESPONSIBILITY

Highly concerned for the environment and community, and contributing added value as well as contributing to the prosperity of the society

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Indika Foundation was founded in 2017 to further actualize

  • ur values

Founded by: PT Indika Energy Tbk. on 15 February 2017 Name: Yayasan Indika Untuk Indonesia (Indika Foundation) Mission: Rooted in Indonesian values, Indika Foundation aims to build resilient Indonesians, capable of unleashing their potentials

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Indika Foundation prioritizes the mission-driven programs along two main themes

Building national character

Conviction to live in the society with full integrity, esprit de corps of being the citizen

  • f the Republic of Indonesia, and deeply rooted

values of Pancasila and UUD ‘45

Promoting tolerance

The spirit and belief that diversity is a unifying strength, hence empathy and mutual respect without any primordial discrimination is practiced in a peaceful society

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Indika Energy also continuously contributes to the community and environment through our Sustainability programs

  • Indika Energy - Facilitates early childhood education (PAUD), nutritional improvement and skills

development for youth and women in Mariso, Makassar, South Sulawesi

  • Indika Energy - Provides educational assistance through Indika Energy Cerdaskan Anak Bangsa

program, which provides scholarships for the children of Indika Energy Group employees

  • Cirebon Electric Power – Site visit and introduce PLTU technology to school students
  • Petrosea – SUKA ASI, breast feeding campaign to improve infants nutrition in Kariangau and

Margomulyo, Balikpapan, East Kalimantan

  • Petrosea – Provides additional food and nutrition improvement in Sorong, Papua
  • Tripatra – Training and enhancement of health facilities in Bintuni, Papua
  • Indika Energy – Promotes the diversity and strengthen the values of Bhinneka Tunggal Ika, in

collaboration with SabangMerauke

  • Indika Energy – Volunteerism and community empowerment program with Indorelawan
  • Indika Energy – Environmental conservation, protection and returned back wildlife in their wild habitat
  • Kideco – Integrated farming system based on Green Eco Agro Edu tourism, which combine

multi-commodities farming and enviro-friendly technology

  • MBSS – Bagan Asahan Bersih program, mentoring and enhance coastal waste facilities in Tanjung Balai

Asahan, North Sumatra

  • All subsidiaries conduct their own environmental programs in their operational activities as part of good

mining practices Education Health Community Empowerment Environment

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Indika Energy’s Performance Turnaround 2017 Financial and Operational Review

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Revenues

US$ million

775.2 1,098.8 +41.7% 2016 2017

Proportion of 2017 Revenues

Tripatra 25,0% Petrosea 23,1% MBSS 6.1% IIR 29.1% Kideco* 10.1% Others 6.6%

Tripatra 274.8 Petrosea 254.3 MBSS 67.1 Indika Indonesia Resources 319.8 Kideco* 110.5 Others 72.2

* Kideco Revenues in December 2017

Consolidated financial performance

2016 VS 2017

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Gross Profit

US$ million

Operating Profit (Loss)

US$ million

88.7 122.9 Margin 11.4% 11.2%

  • 1.3%

3.1% +437.3% 2016 2017 2016 2017

  • 10.1

34.1 Margin

Selling, General and Administrative Expenses

US$ million

88.8 98.8 2016 2017

  • 10.1%

+38.6%

Consolidated financial performance

2016 VS 2017

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2016 2017 2016 2017

Adjusted EBITDA**

US$ million

Equity in Net Profit of Associates and Jointly-controlled Entity*

US$ million

59.5 136.2 155.7 291.5 +129.0% +87.2% Margin 20.1% 26.5%

* Net profit of associates from Kideco for eleven months in 2017 ** Including dividend from associates

Consolidated financial performance

2016 VS 2017

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Profit (Loss) for the Year Attributable to Owners of the Company

US$ million

2016 2017

  • 8.7%

30.5% +596.2% (67.6) 335.4 Margin

Core Profit (Loss)*

US$ million

2016 2017 +318.0% (43.3) 94.5

* Core profit/loss defined as net profit/loss for the year attributable to owners of the Company, excluding one-off non-operating gains or losses (amortization of intangible assets, impairment of assets and gain on revaluation of assets) and related taxes

Consolidated financial performance

2016 VS 2017

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2016 2017

Total Assets

US$ million

+133.1%

Total Liabilities

US$ million

+50.5%

Total Equity

US$ million

2016 2017 1,822.3 3,635.7 2016 2017 1,081.2 2,520.7 +99.5% 741.1 1,115.0

Consolidated financial performance

2016 VS 2017

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Capital Expenditure 2016 2017 Indika Energy 2.0 0.5 Petrosea 12.7 49.7 MBSS 6.2 10.7 Tripatra 0.7

  • Indika Indonesia Resources

0.4 3.8 Kideco

  • 1.0

Total 22.0 65.7

Capital Expenditure

US$ million

Dividend Received

US$ million

2016 2017 84.7 143.4 +69.3%

Consolidated financial performance

2016 VS 2017

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Cash & debt position in 2017

507.0 1,340.0 77.5 82.2 144.4 17.9

Bonds Bank loans and long term loans Lease liabilities

3) 5)

Notes: 1) Consists of: Petrosea: US$59.6 mn, MBSS: US$34.6 mn, Tripatra: US$152.5 mn, Kideco: US$144.4mn, and Indika Energy Holding: US$337.9 mn (including IIC, IIR, ILSS and Others) 2) Current other financial assets 3) US$265 mn due 2022 (Senior notes V), US$500 mn due 2023 (Senior Notes IV), and US$575 due 2024 (Senior Notes VI) 4) Bank loans and long term loans: Petrosea: US$10.6 mn, MBSS US$0.9 mn, Tripatra: US$15.0 mn, IIR: US$25.7 mn, Indika Energy Holding: US$30.0 mn (including IIC, IIR, ILSS, and Others) 5) Lease liabilities: Petrosea US$17.9 mn 6) Kideco’s cash: US$144.4 mn (including restricted cash)

2)

1,440.2

1)

729.0

4) 6)

Cash and cash equivalents and other financial assets Debt

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Operational performance

2016 VS 2017

2016 2017 2016 2017 32.5 31.5

  • 3.1%

Sales Volume

Million ton

38.4 51.9 +35.1%

Average Selling Price

US$ per ton

2016 2017 1,247.8 1,633.0 +30.9%

Revenues

US$ million

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Operational performance

2016 VS 2017

2016 2017 2016 2017 193.9 195.9 +1.0%

Overburden Removal

Million bcm

6.0x 6.1x +1.3%

Stripping Ratio

2016 2017 27.6 28.0 +1.6%

Cash Costs, excluding Royalty

US$ per ton

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PUBLIC EXPOSE

PT Indika Energy Tbk.

26 April 2018

45 Tahun #KerjaMembangunBangsa