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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


  1. 45 Tahun #KerjaMembangunBangsa PUBLIC EXPOSE PT Indika Energy Tbk. 26 April 2018

  2. 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, or 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 opinion of other business sectors or business groups of the Company as a result of using different assumptions and criteria. 2

  3. 1 Indika Energy’s Performance Turnaround 2 2017 Financial and Operational Review 3

  4. Indika Energy, 45 years contributing to Indonesia Logistics Inception of Oil and gas Coal mining Oil and gas Energy Logistics Energy Kuala Tripatra’s Arun Pelabuhan Inception of Inception of Inception of Inception of IPO of Indika Petrosea Kideco project Indonesia Indika Energy POSB Energy 1972 1982 1993 1995 2000 2005 2008 1973 1989 1991 1994 1998 2002 2007 Petrosea’s Petrosea’s Babo Inception of Inception of Inception of MBSS be the Inception of Cirebon Tripatra Multi Timika Airstrip Mitrabahtera 1 st company to airstrip upgrade Electric Power - the Tambangjaya Segara Sejati implement in Papua first internationally Oil and gas Infrastructure Utama dispatch and tendered power Shipping Infrastructure demurrage Petrosea’s Coal mining project after Asian clause Pagerungan financial crisis Besar Gas Field Shipping Power Oil and gas 2009 2010 2011 2012 2014 2016 2017 Tripatra’s Tripatra’s Senoro Tripatra’s Petrosea’s inauguration Inception of Tripatra’s Banyu Expansion of Petrosea’s Gunung Salak Indika Logistics Urip - Cepu LNG Jangkrik as one of Bonded geothermal EPC1 development Logistic Center (PLB) bonded logistics Logistics Oil and gas project project center in Papua Oil and gas Logistics CEP 1 inauguration - Renewable Oil and gas Logistics enviro-friendly Tripatra’s Tangguh supercritical LNG expansion project Inception of technology Indika Oil and gas Foundation 4 Power

  5. Indonesia’s leading integrated energy company PT Indika Energy Tbk. 1 Energy Resources 2 Energy Services Energy Infrastructure 3    - 3rd largest coal producer and one of the - Major integrated coal transport and logistics lowest cost coal producers - Established since 1973 services company - Resources 1,375mt, reserves 422mt - Leading EPC and O&M services in oil & gas - Long-term relationships with top Indonesian - 91% ownership and power plant development coal producers - 100% ownership - 51% ownership    - Bituminous thermal and coking coal reserves - Resources 75.2mt, reserves 40.6mt - Established since 1972 - 85% ownership - 660MW independent power plant in - Major coal contract miner with E&C mining operations - 20% ownership  capabilities - 1000MW to be completed by 2020 – 6.25% - 69.8% ownership ownership - Bituminous, sub-bituminous and thermal coal - Enviro-friendly supercritical technology reserves - 34.9% ownership   Offshore Supply Base - Over 90% berth and 100% occupancy ratios - Coal trading volume 7.0mt *Companies within Indika Energy Group being mentioned on this slide are non-exhaustive 5

  6. Indika Energy Group companies cover end-to-end coal business value chain Overburden removal Resources ownership Production Proven track record Professional integrity Local know-how End-use in power plant Crushing International partners Barging & shipping All-weather hauling Port services 6

  7. 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 7

  8. Coal prices started to rebound in 2016 and remain mostly in the range of US$90-100 per ton in early 2018 Newcastle Coal Price Index WTI Crude Oil Price USD/ton USD/barrel 140 19 Apr 2018 95.6 US$/ton 70 68.4 US$/barrel 2010 Average 2011 Average 2012 Average 2013 Average 2014 Average 2015 Average 2016 Average 2017 Average US$ 88.4/ton US$ 99.2/ton US$ 121.3/ton US$ 97.7/ton US$ 84.9/ton US$ 70.36/ton US$ 58.0/ton US$ 61.8/ton US$ 79.7/ltr US$ 94.9/ltr US$ 94.1/ltr US$ 98.0/ltr US$ 93.2/ltr US$ 48.7/ltr US$ 43.3/ltr US$ 50.8/ltr 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: Platts & US Energy Information Administration 8

  9. Kideco’s additional 45% stake acquisition brought Indika Energy to a different scale Indika Energy acquired 45% additional stake of Kideco, now total 91% • 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 9

  10. 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% The Asset − 7NC4: 7-year tenor (due in 2024), non-callable for Regional Awards 2017 4 years THE BEST HIGH YIELD BOND • The biggest amount and at the same time the lowest coupon/yield ever issued by Indika Energy “One of the largest demand for Indonesian since 2007 high yield corporate in 2017, helps facilitate the transformation of Indika • The lowest ever coupon for a mining company in Energy’s credit profile with a rating upgrade Indonesia from Moody’s Investors Service” • The lowest ever 7-year mining bond in Asia The Asset 10

  11. International agencies also upgraded their ratings as a reflection of improvement in the company's operating profile 12 December 2017 12 December 2017 Upgrade to Ba3 Upgrade to B+ with outlook stable with outlook positive • Expectations of improvement in Indika Energy's • Expectations of improvement in Indika operating profile as it now controls the steady Energy's credit profile following the cash flow generation at Kideco acquisition of an additional stake in Kideco • Indika Energy's stronger credit metrics in • Expectations of the flexibility available to 2018-2019 with consolidated leverage of Indika Energy to address its lumpy debt around 3.4x-3.6x maturities 11

  12. After 4 years of losses, turnaround initiatives resulted in positive performance in 2017 Revenues Net Profit After Tax Core Profit US$ million US$ million US$ million 6.2% 1,110 1,097 1,099 863 335 775 94 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 2017 2017 2017 -9 -28 -45 -62 -28 -68 -39 -43 12

  13. 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) +34X 5,000 In the last 27 months 4,500 4,000 Latest: 3,500 Rp 3,660 (20 Apr 2018) 3,000 2,500 INDY reentered 2,000 Lowest: LQ45 1,500 Rp 106 in Feb 2018 (12 Jan 2016) 1,000 500 2014 2015 2016 2017 2018 13

  14. Recently we also invest to build a terminal to store fuel products in Kariangau, East Kalimantan 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 • 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 14

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