toba company presentation · sales volume, newc index & asp (million tons and us$/ton) sales,...
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1
PT Toba Bara Sejahtra Tbk (“Toba”)
Company PresentationApril 2017
PT Toba Bara Sejahtra Tbk (TOBA)
Company PresentationFull Year 2017
Disclaimer
These materials have been prepared by PT Toba Bara Sejahtra Tbk (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
Company Profile
2017 Performance Highlights
3
1
Strategy to Venture into Power
3
i Sulbagut-1 Project
ii Sulut-3 Project
4
Performance HighlightsPerformance Highlights2 Company Profile1
Kalimanta
n
East Kalimantan
PT Toba Bara Sejahtra Tbk in Brief
Location: Kutai Kartanegara,
Kalimantan Timur
Total Concession : 7,087 ha
Coal Mining
Location: Kutai Kartanegara,
Kalimantan Timur
Hak Guna Usaha (HGU) covers
8,633 ha. where 2,701 ha has
been planted
Palm Oil Plantation & Mill
5
Power Generation
GLP and MCL established in February 2016 and
March 2017 respectively for development of steam
(coal) fired power plant project (CFPP) with capacity of
2x50 MW each
25 year Power Purchase Agreement (PPA) through
Independent Power Producer (IPP) scheme with PLN
as single offtaker
Gorontalo
North Sulawesi
Ownership Structure
6
License
Area
20-year Production
Operation Mining
Permit (IUP-OP)
expiring in
December 2029
2,990 ha
IUP-OP extension
was completed in
March 2013 (First
out of 2
extensions: in
2023 with tenor of
10 years each)
683 ha
13-year IUP-OP
expires in
December 2023
3,414 ha
Plantation permit
of PT Perkebunan
Kaltim Utama I
(PKU) expires in
2036 IUP-P for
downstream
processing
8,633 ha (Right to
Use Land)
GLP’s PPA with
PLN(1) for 25- year
contract
~60 ha
MCL’s PPA with
PLN(1 for 25- year
contract
~40 ha
Off-take (take or
pay) by PLN for 25
years
Planted Area:
2,701 ha
Off-take (take or
pay) by PLN for 25
yearsReserve
Reserves: 45 MT –
JORC (2018)
Resources: 78 MT –
JORC (2018)
Reserve: 13.1 MT
– JORC (2018)
Resources: 54.6
MT – JORC
(2018)
Reserves : 5.8 MT
– JORC (2018)
Resources: 20.3
MT – JORC
(2018)
Davit Togar
Pandjaitan
PT Bara Makmur
Abadi
PT Toba
Sejahtra
Roby Budi
Prakoso
PT Sinergi
Sukses Utama
61.91% 10.00% 6.25% 5.10%
PT Toba Bumi
Energi (“TBE”)
99.99%
99.99%
3.64%
51.00% 99.99%
Public *)
12.35%
90.00% 60.00%
Highland Strategic
Holdings Pte. Ltd.
0.75%
*) Incl. Baring Private
Equity as anchor
investor
90.00%
99.60%
Note: On 4th February, 2016, the Company has entered into sales and purchase agreement with Toba Sejahtera to acquire Toba Sejahtera’s 20% ownership in
GLP (Subject to approval from PLN) )
Strategic Mine Locations
Toba owns all infrastructures (coal processing plant, overland conveyors, and jetties) giving
significant operating leverage vs other concessions in surrounding areas7
Overland & Barge
Loading Jetty: Speed
of 1.800 TPH
High Built CPP Cap
up to 10 Mn TPA
Short Coal Hauling
Distance < 5km
Hauling Road to
Connect with ABN
CPP Capacity : 6 Mn
Tons/Annum (TPA)Conveyor to Jetty
Short Coal Hauling
Distance ~4km
Infrastructure & Operational Capabilities
TOBA’s Concessions
ROM Stockpile
8
Note: PT Adimitra Baratama Nusantara (ABN)
PT Indomining (IM)
PT Trisensa Mineral Utama (TMU)
PPA signing with PLN
for Sulut-3 Power
Project
Engineering Procurement Contract (EPC)
signing with SEPC* for Sulbagut-1 Power
Project
Contracts and Awards Earned in 2017
7 April 2 May 7 July 11 July 14 July
Project Financing Signing with
Bank Mandiri worth US$ 171.8 mn
for Sulbagut-1 Power Project
Material Information
9
Financing Date with
PLN for Sulbagut-1
Power Project
Special Transaction Loan Facility
and Non-Cash Loan of US$ 50 mn
with Bank Mandiri
* Shanghai Electric Power Construction Co. Ltd.
ABN received Gold PROPER Enviromental
Award from Provincial Govt for 3
consecutive years
IM and TMU received Green PROPER
Enviromental Award for 2 consecutive years
IM received certificates for ISO 14001. OHSAS
18001 and ISO 9001
ABN received Award from Customs
Office of East Kalimantan as “Ideal”
Company
TMU received Pratama Award from
Ministry of Energy. Mines. &
Resoucres (MEMR)
10
2017 Performance Highlights2
4.1 Mt
5.2 Mt5.6 Mt
6.5 Mt
8.1 Mt
6.1 Mt5.5 Mt
5.0 Mt
$99 $121 $97
$85$71
$59$66
$89
0
20
40
60
80
100
120
140
0
1
2
3
4
5
6
7
8
9
10
2010 2011 2012 2013 2014 2015 2016 2017
Toba Consolidated Production NEWC Price
30.1% 32.9%
5.7%13.9% 13.5% 15.4% 15.2%
24.1%
EBITDA Margin
Production Profile
11Source: Coal price from GlobalCoal
Amidst coal price volatility over the past several years and to sustain the Company’s survival mode, Toba
has undergone cost efficiency initiatives as shown by stable EBITDA margin
Operational Performance
Yearly Production & SR
Production in Million Tons
2016 2017 Change Comment
Sales
Volume5.7 4.8 (15.8)% Sales volume tracked its 2017 production volume
SR (x) 12.9 13.1 1.6% SR edged up due to wet weather in 2Q17, but in line with
mine plan
5.5 5.0Production volume in 2016 stabilized at 5.0 mn tons in
line with mine plan(9.1)%
Production
Volume
Production Summary
MT: Million Tons
12
Q-o-q production volume has
remained stable and in line with
2017 quarterly guidance of 1.25
1.50 mn tons
4Q17 SR stabilized at 12.0x, on
track of achieving annual SR
guidance of 12x - 13x
Higher SR in 2Q17 impacted by
wet weather
12.6x
13.7x 14.3x
12.6x12.0x
12.0x - 13.0x
4Q16 1Q17 2Q17 3Q17 4Q17 QuarterlyGuidance
TMU IM ABN SR (Consolidated)
1.1 1.2
1.25 - 1.501.4 1.4 1.3
Realization
Consolidated Full Year 2017
“Sustainability & Resilience”
Focused on profitable production output
through optimization of :
• Infrastructure and connectivity sharing
(hauling road and coal processing plant)
• Joint mine plan
• Coal sale pricing driven by relationship.
consistency in scheduled delivery and
product quality
• Well-diversified market destinations
and customer base
Note:
(a) FOB Cash Cost = COGS including royalty and selling expense –
depreciation and amortization
(b) Includes profit from construction of Sulbagut-1 power project
(based on accounting treatment PSAK 34 and ISAK 16)
(c) EBITDA = Gross profit – selling expenses G&A + depreciation and
amortization
(d) EBITDA/ton = Coal mining business only
13
Operational FY16 FY17 Δ%
Production Vol 5.5 5.0 (9.1) %
Sales Vol 5.7 4.8 (15.8) %
Stripping Ratio 12.9 13.1 1.6 %
Sales(b) 258.3 310.7 20.3 %
EBITDA(c) 39.2 74.8 90.8 %
Net Profit 14.6 41.4 183.6 %
Financial FY16 FY17
45.4
NEWC Index 88.5 34.1 %66.0
ASP 61.1 34.6 %
mn ton
mn ton
x
US$/ton
US$/ton
US$ mn
US$ mn
US$ mn
Δ%
EBITDA/Ton(d) 7.1 15.3 115.5%US$/ton
15.2%EBITDA Margin 24.1%
Gross Profit Margin 30.3%20.6%
Financial Ratios FY16 FY17
FOB Cash Cost(a) 34.5 40.0 15.9 %US$/ton
Evolution of FOB Cash Cost
Quarterly FOB Cash Cost
In US$/ton
Notes:
(1) FOB Cash Cost = COGS including royalty and selling & marketing expense – depreciation and amortization
(2) Adj. FOB cash costs = COGS. including selling & marketing expense and royalty – depreciation & amortization of exploration & development and
excluding deferred stripping cost14
50 47 43 41 38 35 35 35 34 37 40 41 42
51 46
42 41 38 34 35 35 34 37 41 41 41
63.8 65.859.6 59.0
52.6 50.3 51.5
67.3
94.7
81.5 79.7
94.5
98.2
13.8x
12.4x 12.5x12.0x 12.1x 12.4x
13.8x12.8x 12.6x
13.7x 14.3x
12.6x12.0x
0x
3x
6x
9x
12x
15x
0
20
40
60
80
100
120
140
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
FOB cash cost Adj. FOB cash cost NEWC SR
Despite fluctuation in NEWC price, TOBA has maintained relatively stable SR and cash cost
through proper mine planning and cost management initiative
Although cash cost rose 18.8% from 2Q16 to 4Q17, coal price increased much higher by 90.5%
over same period, hence reflecting the still higher ASP expansion over cash cost rise itself
15
Sales Volume, NEWC Index & ASP (million tons and US$/ton)
Sales, Cost of Goods Sold and Gross Profit
Margin (US$ million and %)
EBITDA/ton and EBITDA Margin(US$/ton and %)
Increase in ASP per ton directly flows through
higher gross profit margin and EBITDA margin
ASP Positively Impacts Margins
6.4 5.7
4.8
59.2
66.0
88.5
54.8
45.4
61.1
2015 2016 2017
Sales Volume
NEWC Index
ASP
348.7 258.3310.7
278
205 21720.2%
20.6%
30.3%
2015 2016 2017
Sales
Cost ofGoodsSoldGrossProfitMargin
8.4 7.1
15.3
15.4% 15.2%
24.1%
2015 2016 2017
EBITDA/ton
EBITDA Margin
Balance Sheet
Consolidated Balance SheetIn Million US$
Net Debt to EBITDAIn Million US$
Total assets and total liabilities rose similarly mostly due to rise in interest bearing debt from :
Bank Mandiri, for refinancing of Toba’s syndicated loan and investment in construction of Sulbagut-1
power plant where US$ 50.0 mn and 28.1 mn of total proceeds respectively were used during 2017
Citibank, amounting to US$ 4.0 mn, used for ABN’s working capital and general corporate purposes
Total equity value improved due to current earnings over the period
Net Debt to EBITDA ratio has constantly recorded stability from quarter to quarter at < 0.5x
16
348.4Total Assets 261.6 33.2 %
Interest Bearing Debt 98.851.3 25.1 %
Total Liabilities 173.6113.8 52.5 %
Shareholders Equity 174.8147.7 18.3 %
Balance Sheet Dec’ 16 ChangeDec’ 17
Cash and Cash
Equivalents 1) 37.6 98.7 %74.7
13.710.8 11.8
8.2
24.1
39.2
45.1 45.8
64.1
74.8
4Q16 1Q17 2Q17 3Q17 4Q17
Net Debt (Cash) (US$ Mn) Last 12 Month EBITDA
Ratio (x) 0.4 0.2 0.3 0.1 0.3
Note:
(1) Cash and cash equivalents include restricted cash in bank
63%
71% 73%
37% 29%
27%
2015 2016 2017
Traders
End-users
NEWC - Adj.5,600 GAR
ASP
HBA - Adj.5,600 GAR
Marketing Performance
Prior to 2016, spread between NEWC and ASP narrowed due to optimizing marketing initiative to
premium customers in Japan, Korea, Taiwan, and Malaysia at mainly fixed price
Majority of 2016 sales volume was fixed at price during 1H16 period. Sudden coal price surge in 2H16
beyond market prediction was not reflected in the 2016 ASP, causing widened spread between NEWC
and ASP
Throughout 4Q17, spread between NEWC and ASP narrowed due to large portion of sales volume
being fixed during price uptrend in 4Q16, but still not capturing the high prices of November and
December 2016
17
Diversified Export Market Base
18
Export Market Focus FY15 – FY17 2017 Export Market – More ASEAN Driven
Given China’s economic situation in 2015, focus shifted towards export markets whose economies
showed stable demand prospects such as Korea, Taiwan, India. ASEAN markets ie. Thailand, Malaysia,
Philippines, and Vietnam have shown positive traction
Diversification towards countries ex.China remained the highlight for 2017
In 2017 and going forward, ASEAN markets will play more important role in sourcing coal from its
proximate supplier such as Indonesia
25.9%
18.4%
12.4%
12.0%
9.1%
6.5%
4.4%
2.9%
2.5%
1.9%
4.0%
0.0 0.2 0.4 0.6 0.8 1.0
South Korea
Thailand
Malaysia
Taiwan
China
Japan
India
Philippines
Vietnam
Hong Kong
Others
Million Tons
9%
5%
9%
32%
25% 26%
4%
11%
18%
14%
9%
12%13%15%
12%
FY 2015 FY 2016 FY 2017
China Korea Thailand Taiwan Malaysia
19
From 2015 to 2017, sales constribution consistently derived from mainly 5600 GAR products
A mixture of mid-upper quality of 5600 - 5900 GAR still account for TOBA’s largest product
composition
Product Composition (GAR) by % – FY17 Product Composition (GAR) : FY15 – FY17
Product Composition by Quality
23.6%
22.9%
20.7%
15.4%
7.5%
6.5%
3.4%
0.0 0.5 1.0 1.5
5600 HS
4800 & 5000
5200
5600 RS
5800
5900 LS
Others
Million Tons
36%
30%
24%
30%
24%
15%18%
22%
14%
0%
7%
21%
16%17%
26%
2015 2016 2017
5600 HS 5600 RS 5800 & 5900 LS 5200 Others
Sulbagut-1 & Sulut-3 power projects
90%
Mining Business
10%
Snapshot of 2018
Mine Plan Execution
2018 production and SR are projected at similar numbers as in 2017 of 5 - 6 million
tons and 12x - 13x respectively. The Company will also maintain its cash cost at
stable level
Marketing Strategy
The Company plans to continue building well-diversified market destinations and
customer base, maintaining product quality and timely delivery, as well as optimizing
the current favorable coal price into the Company’s ASP
Capital Expenditure
Total Capex for 2018 is estimated at US$ 90 - 100 million, of which 80% - 90% will be
allocated for the Sulbagut-1 and Sulut-3 power projects, with the balance for the
mining business, i.e. land acquisition, and infrastructure/heavy equipment
Sourcing of Other Power and Coal Mining Asset
In translating the Company’s vision, the Company will continuously seek for
opportunities in sourcing potential projects and brownfield assets both for power and
coal mining 20
Operation
Prod Vol (mn ton)
SR (x) 13.1x
5.0
2016
12.9x
5.5
NEWC Coal Price (US$/ton) 88.566.0
12x – 13x
5.0 – 6.0
2018 F
80.0
2017
Forecast CAPEX 2018
21
Performance HighlightsPerformance Highlights2Strategy to Venture into Power3
Integrated
Energy
Company
Business Growth and Sustainability
Transformation
• Acquisition of mine(s)
around existing mining
concessions
• Acquisition of mine(s) to
support coal-related
power projects
• Active participation as
IPP* in PLN tenders
• Assessment of
developing renewables
• Identification of strategic
partner(s) with vast track
record
• Expansion of power
project capacity (MW)
Coal Mine
• Optimization of existing mine plan
• Optimization of infrastructure sharing
• Cost management
• Diversification of markets and
customer base
• Active participation in CSR
Company Strategy
Fossil Fuel and
Renewables Power
Present Future Company Initiatives
Coal
Mining
Company
* Independent Power Producer
22
23
Downstream Integration Provides
Transformational Balance
Successfully built TMU from greenfield stage in 2011 to fully operating coal mine
at run-rate of > 1mmtpa
Sulbagut-1 CFPP project (2x50 MW) – successfully achieved financial close on
schedule, one of very few companies able to do so. Expected COD in mid 2020
Second 2x50 MW Sulut-3 CFPP project was signed on 7 April 2017 with expected
COD in 2021
Experienced partners and EPC in both projects, who are one of the largest power
equipment manufacturing and construction conglomerates in China: (1) Shanghai
Electric Power Construction in Sulbagut-1; (2) Sinohydro in Sulut-3
Measures in place to ensure on-budget project cost and on-time delivery
In-house
Management
Experience
Strong
Partnership
Toba Sejahtra (one of Toba’s shareholders) have successfully built and operated 2
power plants: (1) 117 MW Senipah, gas-fired power plant, COD in 2015; (2) PJPP
Palu, 66 MW CFPP, COD in 2007
Some members of Toba’s Management were involved in above power plant
development and operation, allowing Toba to leverage on their strong experience
in development of existing and potential power projects
Shareholder
Experience
Toba is diversifying into power generation sector. Given its extensive experience in project execution
and key shareholder’s familiarity with power business, it is geared to completing the transformation
24
Project Selection Process
Targeting attractive return of equity IRR and Project IRR
Ability to identify, assess, and manage completion risk, technical and non-technical risk
such as social assessment for land acquisition to ensure the project can be completed
within specified time schedule
Financial capability to participate in targeted tender projects where PLN sets specific
requirements to meet
Majority control for certain size of IPP projects
Appetite to have minority portion with good and credible partner in larger size projects
Credible partner with vast experience and proven technology
Can bring long-term value-add to organization and local people including transfer of knowledge
Have good networking capability with PLN and power stakeholders
Parameters for Project Selection
Parameters for Partner Selection
Toba Group IPP Experiences
25
Sumatra
Kalimantan
Java
Sulawesi
MalaysiaEast Kalimantan
Senipah Power Plant
Central Sulawesi
Palu Power Plant
PLTG Senipah
2x41 MW
PJPP *)
2x15 + 2x18 MW
In operation, COD in 1Q
2015
Combined Cycle System
is under PPA finalization
for additional 35 MW
Total potential supply:
115 MW
2x15 MW, COD in 2007
Expansion of 2x18 MW
reached COD in 2016
Total supply: 66 MW
SULBAGUT-1
2x50 MW
Financial Close: 14
July 2017
Expected COD: mid
2020
*) Divested to private buyer in 4Q 2016
SULUT-3
2x50 MW
In process for
Commencement of
Work
Expected COD: 2021
Sulbagut-1 Projecti
27
Project Location North Gorontalo Regency, Province of Gorontalo, Sulawesi
Developer PT Gorontalo Listrik Perdana
(80% Toba Group, 20% Shanghai Electric Power Construction Co. Ltd)
Capacity 2 x 50 MW (Net); 2 x 60 MW (Gross)
EPC Shanghai Electric Power Construction Co. Ltd
Total Investment US$ 220-225 mn
Total Required Land 60 Ha (100% secured)
Estimated COD Mid 2020
PPA Contract PPA was signed on 14 July 2016 for the period of 25 years
Project Financing Financing agreement was secured on 11 July 2017
Sulbagut-1 Project Summary
Sulbagut-1 has achieved financial close in July 2017 and is currently under construction
Kalimantan Sulawesi
TBS Concessions
Sulbagut-1
Project Overview
28
2017 Snapshot of Sulbagut-1 Project (1 of 2)
Financal Close Reception with
BOD of PT PLN (Persero)
Achievement of Financing Date with
PT PLN (Persero), 14 July 2017
Signing EPC Contract with
Shanghai Electric Power Construction
Signing Financing Agreement with
PT Bank Mandiri (Persero) Tbk
Kick Off Meeting with
Shanghai Electric Power Construction
29
2017 Snapshot of Sulbagut-1 Project (2 of 2)
Soil Investigation Activity Land Clearing Activity
Main Plant Area LandscapeProject Signboard Land Clearing of Access Road
30
Site
Preparation
Construction
Next after Financial Close...
Commercial
Operation Date
(COD)
Commissioning
2017 2018 2019 2020
31
Performance HighlightsPerformance Highlights2 Sulut-3 Projectii
32
Project Location North Minahasa Regency, Province of North Sulawesi, Sulawesi
Developer PT Minahasa Cahaya Lestari
(90% Toba Group, 10% Sinohydro Corporation Limited)
Capacity 2 x 50 MW (Net); 2 x 60 MW (Gross)
EPC Sinohydro Corporation Limited
Total Investment US$ 205-210 mn
Total Required Land 40 Ha (100% secured)
Estimated COD Early 2021
PPA Contract PPA was signed on 7 April 2017 for the period of 25 years
Project Financing Financing agreement expected to be secured by 1Q2019
Sulut-3 Project Summary
Sulut-3 is expected to complete EPC contract by early 2H18 and achieve financial close by 1Q2019
Project Overview
Kalimantan Sulawesi
TBS Concessions
Sulut-3
33
2017 Snapshot of Sulut-3 Project
Land Survey and Topography Investigation for Main Plant Area
Secured Land Signing of PPA on 7 April 2017
34
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