Full Year 2015 1 - Toba Bara · Full Year 2015 . Disclaimer These materials have been prepared by...

1

PT Toba Bara Sejahtra Tbk (“Toba”)

Company Presentation Full Year 2015

TOBABARA_ENG_Hi_117mb.mp4

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

or 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

of the Company should be made after seeking appropriate professional advice.

2

Table of Contents

2

5

Company Profile

4

2015 Operational Highlights

3

2015 Marketing Highlights

Guidance for 2016

1

2015 Financial Highlights

3

4

Company Profile 1

JORC-compliant proved and probable reserves

of 147 MM tons and measured, indicated and

inferred resources of 236 MM tons

Coal brands with mid to upper range calorific

values (CV) of 4,700-5,800 kcal/kg GAR

Strong production growth profile, registering

~34% CAGR between 2008 and 2015. Produced

6.5 MM tons in 2013 and grew ~25% to 8.1 MM

tons in 2014

Prime location near Capital of East Kalimantan

and proximity to waterways provides

operational cost edge to grow as logistical &

operational center for the area

Strong

Growth

Profile

Toba specializes in thermal coal production and comprises of three mining subsidiaries: Adimitra

Baratama Nusantara (ABN), Indomining (IM) and Trisensa Mineral Utama (TMU)

Toba Bara Sejahtra in Brief

Diversified

Thermal Coal

Reserves

and

Resources

5

Strategic Mine Locations

Muara Berau

Muara Jawa

Makassar Strait

~55 km

(total ~120 km)

Balikpapan

Samarinda

~65 km

Major

City Jetty Transhipment

Point

TMU – IM

Hauling Road

Kutai Energi

TMU

ABN

IM

Major city to

north is less than

50 km

Adjacent

locations for all

3 mines

Close proximity

to jetty and

transhipment

point of Muara

Jawa

Distance from pit to

jetty, with closest

one ~5 km and

furthest ~25 km

~5 km

IM jetty

ABN jetty

Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties), giving

significant operating leverage vs other concessions in surrounding areas

25 km

6

TMU IM

ABN

TMU

Underpass

Infrastructure

Loading Speed of

1,800 TPH

High Built CPP Cap

up to 10 Mn TPA

Short Coal Hauling

Distance < 5km

~16 km Hauling Road

to Connect with ABN

Mine Ops Commenced

at Block 4

CPP Capacity (cap)

Ramped Up to 6 Mn

Tons/Annum (TPA)

IM Conveyor for

TMU usage &

Others

Short Coal Hauling

Distance ~4km

Infrastructure & Operational Capabilities

Toba’s Concessions

Integrated CPP and

Jetty Ops with IM 7

Note: PT Adimitra Baratama Nusantara (ABN)

PT Indomining (IM)

PT Trisensa Mineral Utama (TMU)

20-year Production Operation

Mining Permit (“IUP-OP”) expiring in December 2029

IUP-OP was converted from

Kuasa Pertambangan (“KP”) in

2009

IUP-OP expires in June 2013

IUP-OP was converted from KP

in 2010

IUP-OP extension was

completed in March 2013 (First

out of 2 extensions: in 2023, with

tenor of 10 years each)

13-year IUP-OP expires in

December 2023

IUP-OP was converted from a

KP in 2010

Plantation permit of PT

Perkebunan Kaltim Utama I

(PKU) expires in 2036

2,990 ha 683 ha 3,414 ha 8,633 ha (Right to Use Land)

Reserves: 117 MT- JORC

Resources: 156 MT- JORC

Reserve: 22 MT- JORC

Resources: 37 MT- JORC

Reserves : 8 MT - JORC

Resources: 43 MT- JORC Planted Area: 2,896 ha

Ownership Structure

Note:

1. Figures are rounded off

License

Area

Davit Togar Pandjaitan PT Bara Makmur Abadi PT Toba Sejahtra Roby Budi Prakoso PT Sinergi Sukses Utama

71.8% 0.8% 6.2% 5.1%

PT Toba Bumi Energi (“TBE”)

99.99% (1)

99.99% (1)

3.6%

ABN Minorities

49.0%

51.00% 99.99% (1)

Public

12.5%

Reserve

90.00%

8

9

2015 Operational Highlights 2

Realization

2015

“Strengthening Resilience for Sustainable Growth”

Operational 2014(2)

2015 Δ%

Production Vol 8.1 6.1 (24.7)%

Sales Vol 7.9 6.4 (19.0)%

Stripping Ratio 13.3 12.3 (7.5)%

Sales 500.0 348.7 (30.3)%

EBITDA 67.0 53.7 (19.9)%

Net Profit 35.5 25.7 (27.6)%

Financial 2014 2015

63.7

NEWC Index 59.2 (16.4)% 70.8

ASP 54.8

(14.0)%

mn ton

mn ton

x

US$/ton

US$/ton

US$ mn

US$ mn

US$ mn

Δ%

EBITDA/Ton 8.5 8.4 (1.1)% US$/ton

Focused on profitable production output

through optimization of :

Infrastructure and connectivity sharing

(hauling road, coal processing plants

(CPP), & jetties)

Joint mine plan between three adjacent

operating mines

Competitive & premium coal pricing

driven by strong coal branding from

consistency in scheduled delivery/product

quality and established customer

relationship with diversified customer base

Average Selling Price (ASP)

outperformance relative to benchmark

Newcastle due to sale executions based

on well-timed predictions in market trends

Note:

(1) EBITDA = Gross Profit – selling expenses – G&A + depreciation and amortization

(2) Restated due to compliance on PSAK 24R implementation

10

2008 2009 2010 2011 2012 2013 2014 2015 2016

ABN IM TMU

Gu

ida

nce

Annual Coal Production Mt : In Million Tons

5.6

6.5

5.0 - 7.0

8.1

Production volume rose from only

800K tons in 2008 to 6.1 mn tons

in 2015, booking CAGR growth

of 33.6% over 8 years

With strategy to sustain certain

margin, while preserving life-

of-mine (LoM) reserves, 2015

production reached 6.1 mn, in

line with 2015 target of 6.0-8.0

mn tons and mine plan

Stripping Ratio (SR) stabilized

at 12.3x, or at higher end of 2015

target range of 11x-12x, but lower

than 13.3x in 2014

2015 overall results from

subsidiaries came in line with

2015 annual guidance Cumulative production

achievement >10 Mt

Cumulative production

achievement >20 Mt

5.2

4.1

0.8

2.0

2015 Production

2008 2009

ABN (Mt)

IM (Mt)

0.1 1.1

0.7 0.9

0.8 2.0 Production Vol.

(Mt)

2010 2011

3.1 3.8

1.0 1.4

4.1 5.2

2012

4.4

1.0

5.6

2013 2014

4.2 4.4

1.4 2.3

6.5 8.1

TMU (Mt)

SR (x)

- -

11.9x 10.5x

- -

9.9x 12.7x

0.2

14.9x

0.9 1.4

13.4x 13.3x

2015E

4.0-5.0

1.1-1.5

6.0-8.0

0.9-1.5

11x-12x 11

2015

6.1

3.9

1.2

1.0

12.3x

6.1

2015 Operational Performance

Quarterly Production & Stripping Ratio (SR) Production in Thousand Tons

Production Summary MT: Million Ton

2014 2015 Change Comment

Sales Volume

SR (x)

7.9 6.4

13.3 12.3

(19.0)%

(7.5)%

Sales volume decreased by 19.0% in line with

production adjustment

SR contracted resulting in lower mining cost

8.1 6.1 Production volume declined y-o-y to 6.1 mn tons in

2015 in line with mine plan, while ensuring certain

margin and optimizing reserve preservation

(24.7)% Production

Volume

Production Summary MT: Million Ton

Q-o-q production volume of 1.5

mn tons in 4Q15 came in line with

2015 quarterly guidance of 1.5 -

2.0 mn tons

2015 SR and quarterly SR

stabilized at 12x level, in line with

annual and quarterly SR guidance

of 11x - 12x

Quarterly SR decreased y-o-y by

12.3% from 13.8x in 4Q14 to

12.1x in 4Q15

12

1,950 1,911 2,160 2,330 1,653 1,505 1,469 1,565 1,529

12.7x 13.5x 13.8x 12.5x 13.8x

12.4x 12.5x 12.0x 12.1x

0.0x

5.0x

10.0x

15.0x

20.0x

0

500

1,000

1,500

2,000

2,500

4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

TOBA

Production Volume (000) Stripping Ratio

ABN Operational Performance

ABN

TMU

IM

PT Kutai Energi

Quarterly Production & Stripping Ratio Production in Thousand Tons

Key Highlights

4Q15 quarterly production increased y-o-y and q-o-q from 4Q14 and 3Q15 respectively, both in line with

2015 internal guidance

SR in 4Q15 edged down q-o-q to 12.6x level from 13.0x in 3Q15, and by 11.3% y-o-y from 14.2x in 4Q14

13

930 904 969 987 994

14.2x 13.1x 13.3x 13.0x 12.6x

0x

5x

10x

15x

20x

840

860

880

900

920

940

960

980

1,000

1,020

4Q14 1Q15 2Q15 3Q15 4Q15

ABN


IM Operational Performance

TMU

ABN

PT Kutai Energi


Key Highlights

Production increase of 288K tons in 4Q15 came in line with 2015 internal quarterly guidance of 275K -

375K tons

SR in 4Q15 edged up q-o-q and y-o-y respectively

14

493 388 231 319 288

13.3x 12.0x

12.7x 12.2x

13.6x

0x

5x

10x

15x

0

100

200

300

400

500

600

4Q14 1Q15 2Q15 3Q15 4Q15

IM


TMU Operational Performance

ABN

IM

PT Kutai Energi

Note: - - - Hauling road

Key Highlights


4Q15 production volume came in at 247K tons, in line with 2015 internal quarterly production guidance of

225K-375K tons

4Q15 SR on q-o-q and y-o-y basis stabilized at 8.3x and declined by 35.7% from 12.9x respectively due

to operational improvement

15

231 213 269 259 247

12.9x

10.4x 9.4x

8.3x 8.3x

0x

5x

10x

15x

0

50

100

150

200

250

300

4Q14 1Q15 2Q15 3Q15 4Q15

TMU


16

2015 Financial Highlights 3

Evolution of Quarterly FOB Cash Cost from 3Q12-4Q15

Quarterly FOB Cash Cost

In US$/ton

Notes:

(1) FOB Cash Cost = COGS including royalty and selling & marketing expense – depreciation and amortization

(2) Adj. FOB cash costs = COGS, including selling & marketing expense and royalty – depreciation & amortization of deferred exploration & development costs and

excluding deferred stripping cost

Constant convergence between FOB cash cost and adjusted FOB cash cost underline

normalization of SR over quarterly period resulting from more efficient mine operations

17

60 57 55 55 53 49 49 53 51 50 47 43 41 38

63

52

59 56

51 52 51 54

50 51 46

42 41 38

14.2x

12.1x

15.1x

13.6x 12.7x 12.7x

13.5x 13.8x

12.5x

13.8x

12.4x 12.5x 12.0x 12.1x

0x

3x

6x

9x

12x

15x

18x

21x

0

20

40

60

80

100

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15

FOB cash cost Adj. FOB cash cost SR

51.5 40.7

12.4

10.3

4.3

4.8

2014 2015

TMU

IM

ABN

54.9 44.9

48.4 42.5

46.9

35.0

2014 2015

TMU

IM

ABN

4.4 3.9

2.3

1.2

1.4

1.0

2014 2015

TMU

IM

ABN

6.1

Operational & Financial Highlights

Production (mn tons)

8.1

24.7%

FOB Cash Cost (US$/ton)

51.3 42.2

17.7%

EBITDA (US$ mn)

67.0 53.7

19.9%

1

2

3

In line with the mine plan,

production volume decreased 24.7%

y-o-y to 6.1 mn tons in 2015. Sales

volume decreased 19.0% to 6.4 mn

tons over the same period, following

the production adjustment

FOB cash cost fell by 17.7% y-o-y,

resulting from continuous cost

management initiatives, better

execution of mine plan, and lower

fuel costs

EBITDA declined by 19.9% y-o-y to

US$ 53.7 mn in 2015, yet EBITDA

margin increased from 13.4% to

15.4% over the same period due to

the same reasons above Notes:

(1) FOB Cash Cost = COGS including royalty and selling &marketing expense –

depreciation and amortization


18

Financial and Operational Highlights

All figures are in million US$ unless otherwise stated

20143)

2015 Changes

Operation

Sales Volume mn ton 7.9 6.4 (19.0)%

Production Volume mn ton 8.1 6.1 (24.7)%

Stripping Ratio (SR) X 13.3 12.3 (7.5)%

FOB Cash Cost1)

US$/ton 51.3 42.2 (17.7)%

NEWC Index Price US$/ton 70.8 59.2 (16.4)%

Average Selling Price (ASP) US$/ton 63.7 54.8 (14.0)%

Financial Performance

Profit (Loss) 2014 2015 Changes

Sales US$ mn 500.0 348.7 (30.3)%

Cost of Goods Sold US$ mn 413.8 278.1 (32.8)%

Gross Profit US$ mn 86.2 70.5 (18.2)%

Operating Profit US$ mn 55.7 42.3 (24.1)%

EBITDA2)

US$ mn 67.0 53.7 (19.9)%

Profit for the Period US$ mn 35.5 25.7 (27.6)%

Total Comprehensive Income for the Period US$ mn 31.7 29.8 (6.0)%

EBITDA/ton US$/ton 8.5 8.4 (1.1)%

Operating cash flows US$ mn 18.9 19.7 4.2%

Capex US$ mn 15.4 12.1 (21.4)%

Balance Sheet 2014 2015 Changes

Interest Bearing Debt US$ mn 58.1 64.0 10.2%

Cash and Cash Equivalents US$ mn 47.8 45.5 (4.8)%

Net Debt US$ mn 10.3 18.5 79.6%

Total Assets US$ mn 300.7 282.4 (6.1)%

Total Liabilities US$ mn 158.8 127.3 (19.8)%

Total Equity US$ mn 141.9 155.1 9.3%

Financial Ratios

Gross Profit Margin % 17.2% 20.2%

EBITDA Margin % 13.4% 15.4%

Operating Profit Margin % 11.1% 12.1%

Financial Performance

Notes: (1) FOB Cash Cost = COGS including royalty and selling expense – depreciation and amortization



16.4% weaker y-o-y NEWC Index price

caused decline in ASP at lower pace of

14.0% due to marketing initiative of

predicting market downtrend and

securing contracts at fixed price

Financial position remains solid as

cash preservation is maintained with

cash and cash equivalents at US$ 45.5

million as of Dec 2015

Stabilization of annual SR to 11x-12x

level is shown by y-o-y decline by 7.5%

to 12.3x in 2015

19

Gross profit margin, EBITDA margin,

and operating margin each rose y-o-y

to 2015 resulting from better

operational performance, disciplined

cost management initiatives, and

effective marketing strategy

3)

3)

Balance Sheet

Consolidated Balance Sheet In Million US$

Net Debt to EBITDA2)

In Million US$

Total assets moderated 6.1% to US$ 282.4 mn at end-2015 from US$ 300.7 mn as per end 2014,

while liabilities dropped much more by 19.8% to US$ 127.3 mn over the same period

Total equity value increased 9.3% to US$ 155.1 mn from US$ 141.9 mn, attributable to additional

profit for the period booked in unappropriated retained earnings

Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at way below 2x

Note:



20

282.4 Total Assets 300.7 (6.1)%

Interest Bearing Debt 64.0 58.1 10.2%

Total Liabilities 127.3 158.8 (19.8)%

Shareholders Equity 155.1 141.9 9.3%

Balance Sheet Dec ’141) Changes Dec ‘15

Cash and Cash Equivalent 47.8 (4.8)% 45.5

10.3 9.2

8.9

13.3

18.5

9.5

17.7

12.1 12.2 11.7

0

2

4

6

8

10

12

14

16

18

20

4Q14 1Q15 2Q15 3Q15 4Q15

Net Debt (Cash) (US$ Mn) EBITDA (US$ Mn)

Ratio(x) 1.1 0.5 0.7 1.1 1.6

21

2015 Marketing Highlights 4

Overall Marketing Performance

Covergence of NEWC Index & ASP (in US$/ton) Sales by Product Mainly Contributed by 5600 (GAR)

Average NEWC Index declined by 16.4% from US$ 70.8/ton 2014 to US$ 59.2/ton in 2015, while ASP

contracted less by 14.0% from US$ 63.7/ton to US$ 54.8/ton over the same period

at ~66%, the 5,600 GAR products account for the largest portion of 2015 total sales volume

22

US

$/t

on

98.5

121.1

96.9

85.3

70.8

59.2

65.5

91.3

72.2 66.6 63.7

54.8

0

20

40

60

80

100

120

140

2010 2011 2012 2013 2014 2015

NEWC

ASP 12.1%

35.6%

30.0%

10.1%

8.2%

4.0%

0.0 0.5 1.0 1.5 2.0 2.5

4800

5600 HS

5600 RS

5800

5900 LS

Others

Million Tons

Notes:

- HS is High Sulphur, max 2.0%

- RS is Regular Sulphur, max 1.0%

- LS is Low Sulphur, max 0.6%

More Diversified Market Base & Customer Base

Initiatives Undertaken:

Total Sales by Customer Type Sales Destinations by Country

Building well-diversified export destination base and customer base backed by positive demand

prospects and quality customers respectively: In 2015, Korea replaced China as main export

destination, while the customer base consisted of mainly reputable international traders with growing

composition of notable regional end-users, increasing from 3.6% in 2014 to 36.8% in 2015

Maintaining product brand with customers by making good on delivery with specifications ensured

Achieving tighter discount to even premium to Newcastle adjusted reference price

23

32.4%

13.9%

12.8%

10.1%

8.9%

8.7%

4.3%

4.1%

3.2%

1.7%

0.0 0.2 0.4 0.6 0.8 1.0

Korea

Taiwan

Malaysia

India

China

Japan

Vietnam

Thailand

Bang'desh

Others

Million Tons

2.1 Mt

63.2%

36.8%

Traders

End-Users

24

Guidance for 2016 5

Snapshot of 2016F

Operation

Prod Vol (mn ton)

SR (x) 12.3x

6.1

2014

13.3x

8.1

NEWC Coal Price (US$/ton) 59.2 70.8

Objective is to execute disciplined mine plan that generates certain margin without compromising long

term reserves

After 17.7% y-o-y reduction in FOB cash cost in 2015, joint mine plan and infrastructure sharing are to

be better streamlined among 3 operating subsidiaries, with initiatives to lower costs throughout value

chain from mining to logistics costs

Marketing is to focus on better diversification of export destination base and customer base (ideal mix

between traders and end-users) and maintaining product branding

2016 CAPEX is estimated at US$ 5 - 8 mn to support mainly mining facilities and equipment, and to

lesser extent, plantation operation of PKU. Currently, PKU is in final stage of constructing palm oil mill

with capacity of 30 fresh fruit bunch (FFB) / hour to be completed by first semester 2016

To maintain sustainable business growth by having more stable revenue stream, Toba is currently

evaluating prospects of undergoing downstream integration in energy-related sector

25

11x - 12x

5 - 7

2016 F

50 - 55

2015

THANK YOU

Full Year 2015 1 - Toba Bara · Full Year 2015 . Disclaimer These materials have been prepared by...

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