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ANALYST BRIEFING2Q11 Performance Results
11 August 2011
DISCLAIMER
The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the
information. Any forward looking information in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or
forecast by PT. Indo Tambangraya Megah Tbk. Nothing in this release should be construed as either an offer to buy or sell or a solicitation of an offer to buy or sell shares in any jurisdiction
2
1. Introduction
2. Financial Review
3. Operational Review
4. Commercial Review
Agenda
3
Agenda
4
1. Introduction
Highlights of 2Q11 & 1H11 – the figures
5
2Q11
502
38%
151
110
$97.4
Q-Q
+7%
+5%
+29%
+16%
+12%
Unit: USD Million
Coal sales
5.22 MtDown 0.3 Mt
-5% Q-Q
1H11
970
35%
268
205
$92.2
y-y%
+19%
+1%
+34%
+53%
+28%
Coal sales
10.71 MtDown 0.6 Mt
-6 % y-y
Total Revenue
Gross Profit Margin
EBIT
Net income
ASP (USD/ton)
1H10
815
34%
200
134
$72.0
1Q11
468
33%
117
95
$87.3
Agenda
6
2. Financial Review
Sales Revenue
7
2Q10 3Q10 4Q10 1Q11 2Q11
2Q10 3Q10 4Q10 1Q11 2Q11
Units: Million TonSALES VOLUME
Units: USD/Ton
AVERAGE SELLING PRICE
Units: USD Million
REVENUE* GROWTH
IndomincoTrubaindo
JorongKitadin
* Net coal revenue2Q10 3Q10 4Q10 1Q11 2Q112Q10 3Q10 4Q10 1Q11
412394
447
5.3 5.05.8 5.5
-2% YoY-5% QoQ
+25% YoY+12% QoQ
78.2 78.3 77.687.3
+23% YoY+6% QoQ
479
5.2
97.4
2Q11
508
Average Gross Margin
* COGS included royalty
8
ITM Consolidated Indominco Trubaindo Kitadin Jorong
2Q10
412
36%
353
28%
114
32%49
27%0
41%
Units: USD millions
1Q1110% 19%
Total Revenue
GPM* (%)
2Q11
468
33%22%
37%
13%2Q10 1Q11 2Q11 2Q10 1Q11 2Q11 2Q10 1Q11 2Q11 2Q10 1Q11 2Q11
364
164
44
18%
19
501
38%
28%
396
37%
180
36
18% 19%23%
23
EBITDA
9
Units: USD million CONSOLIDATED
MINE BY MINE
*COGS = Prod cost + Transport cost + Inv. movement
Revenue1Q112Q10 2Q11
131.8
COGS SellingRoyalty Admin
119.1
87.7
25.512.0
(9.8)
Indominco Trubaindo2Q10
Kitadin Jorong1Q11 2Q11
71.6
47.0
10.61.9
Units: USD million
2Q10 1Q11 2Q11 2Q10 1Q11 2Q11 2Q10 1Q11 2Q11
164.9(4.1)+33.7 +25%QoQ
102.2
51.5
8.6 4.4
+6.8 (0.6) (2.7)
Royalty increased with revenuesHigher ASP
by 12%
Net Income
10
1Q11 2Q11OthersEBIT IncomeTax
DerivativeTransactions
FOREXNet Fin.Charges
2Q10
CONSOLIDATED
MINE BY MINE
Units: USD million
67.0
110.1
52.2
7.6
17.0
(8.1)
Indominco Trubaindo JorongKitadin
55.2
33.0
5.4
2Q10 1Q11 2Q11 2Q10 1Q11 2Q11 2Q10 1Q11 2Q11 2Q10 1Q11 2Q11
Units: USD million
(0.4)
+33.4
(14.2)+1.4
(4.7)
+16%QoQ
95.2
+0.8
Higher ASP by 12% Derivative
loss
67.6
33.8
4.0 3.2
(1.8)
Balance Sheet
11
Net Gearing (%)
Net D/E (times)
(30%)
(0.34)(0.36)
(34%)
(Units: USD million)
CASH POSITION
2007 2008
258222
(Units: USD million)
DEBT POSITION
2007 2008
92
11
55
2009
429
(0.47)
(44%)
2009
2Q11
394
0
2Q11
(0.44)
(44%)
295
2010
0
2010
(0.41)
(41%)
2007 2008 2009 2Q112010
2011 Capital Expenditure Plan: USD 126 m
12
Units: USD million
Trubaindo infrastructure
Indominco East block washing plant
Indominco port improvement
Td.Mayang equipment
Bharinto development
2.8
Realized up to June’11
2011 major Capex plan
57.2
7.1
7.2
10.5
33.4Maintenance and
improvement initiatives
0.0
4.4
2.2
10.6
3.0
8.9
Agenda
13
2. Operational Review
ITM Operations in 2011
East Kalimantan
Bunyut Port
Balikpapan
Palangkaraya
Banjarmasin
Central Kalimantan
South Kalimantan
KITADIN EMBALUT1.0 Mt
INDOMINCO 15.0 Mt
TRUBAINDO 7.3 Mt
JORONG 1.0 Mt
ITM OPERATIONS & PROJECTS
Captive coal-fired power
Samarinda
Jorong Port
Bontang Coal Terminal
OperationProject
Indominco
Trubaindo
Bharinto
Embalut
Td. Mayang
Jorong
14
Total coal output:1H11: 11.0 MtFY11: 25.0 Mt target
- 1H11 output: 6.6Mt- FY11 target: 15.0Mt
- 1H11 output: 3.1Mt- FY11 target: 7.3Mt
- First production output by 4Q 2011- FY11 target: 0.2Mt
- 1H11 output: 0.6Mt- FY11 target: 1.0Mt
- Works as mining contractor at IMM area- Production from own mine will commence
by 2H 2011- FY11 target: 0.5Mt
- 1H11 output: 0.7Mt- FY11 target: 1.0Mt
BHARINTO 0.2 Mt
KITADIN TD.MAYANG
0.5 Mt
15
New integrated ITM operations groups
Mahakam River
South Block 1(Dayak Besar)
North Block
Kedangpahu River
ROM stockpile
Bunyut Port
Product coal conveyor, stacking, stockpile
South Block 2(Biangan)
PT. BHARINTO
PT. TRUBAINDOEAST
BLOCK
Santan River Port stock yard
Bontang City
Asphalt haul road
Inland conveyor
4km
Operations
Stockpile
PortsHauling
Crusher
Post Panamax
95,000DWT
WEST BLOCK
TANDUNG MAYANG
Mine stockyard
ROM stockpile
Bontang Coal
Terminal
ITM operations in Kalimantan
Balikpapan
Palangkaraya
Banjarmasin
Kitadin Embalut
Indominco
Trubaindo
Samarinda
Jorong Port
Bontang Coal Terminal
Bharinto
Kitadin Td.Mayang
Bunyut Port
1
2
3
Going forward, ITM will rationalize and consolidate its Kalimantan operations into three operational groups
Each group will synergize for integrated infrastructure and logistics system
Objective will be increased efficiency, optimization and productivity
The Trubaindo-Bharinto operations consists of the Bunyut barge port, Trubaindo North Block, TrubaindoSouth Block and Bharinto
Operations group target output (medium term): 10-15 Mtpa
The Bharinto project represents a low risk and low cost ‘brownfield’ expansion of its operations group
The Indominco-Tandung Mayangoperations consists of the Bontang Coal Terminal, Indominco W. Block, Indominco E. Block and Kitadin TandungMayang
Operations group target output (medium term): 15-17 Mtpa
The Tandung Mayang project also represents a low risk expansion of the Bontang Operations group
21
Jorong
4.3
Indominco Mandiri
EAST BLOCK
Santan River Port stock yard
Bontang City
Asphalt haul road 2.5Km
35Km
Sea conveyor
Mine stockyard
Inland conveyor 4km
0 106 82 km4
WEST BLOCK
Operations
Stockpile
Ports
Hauling
Crusher
ROM stockpile
INDOMINCO-BONTANG SCHEMATIC
16
Post Panamax
95,000DWT
INDOMINCO PRODUCTION ANALYSIS
MAJOR QUARTERLY UPDATES
1H11 production was lower than target due to continuing rainfalls in the mine area during 2Q11
Additional mining equipment from PAMA and TDM contractor starting in June 2011 onwards
Overall strip ratio in 2011 will be lower than 2010
Feasibility study on East Block Washing Plant is underway
Expansion of stock area at the port and installation of 6 tunnels conveyer almost completed
3.13.7 3.6 3.5 3.6
1Q 2Q 3Q 4Q
20102011
SR 15.014.9
14.914.7
West Block
1.82.82.12.5 2.5 2.3
1Q 2Q 3Q 4Q
East Block
1.30.92.2
1.1 1.0 1.3
1Q 2Q 3Q 4Q
SR 14.6 14.7 14.6 14.7
9.0 9.0 9.0 9.0
Volume
13.5
FY10 Output: 14.3 Mt; FY11 Target: 15.0 Mt
15.8
Volume 10.1
3.4
11.8
1.8 1.6
12.5 10.9
Trubaindo and Bharinto
Mahakam River
Operation
Stockpile
Hauling
Barge Port
Crusher
South Block 1(Dayak Besar)
North Block
40kmMine to port
KedangpahuRiver
ROM stockpile
BunyutPort
0 10 2515 205 km
Product coal conveyor, stacking,
stockpile
TRUBAINDO-BHARINTO SCHEMATIC
EAST KALIMANTAN
Bharinto 60km south west of
TrubaindoNorth Block
South Block 2(Biangan)
PT. BHARINTO
PT. TRUBAINDO
17
TRUBAINDO PRODUCTION ANALYSIS
MAJOR QUARTERLY UPDATES
Trubaindo: 1H11 production was inline with our production planOne new mining contractor already worked at mine site and additional capacity from PAMA already arrived
Bharinto: Crushing plant construction already completed and already test runPAMA will be working as mining contractor starting in 4Q11Land clearing for mining area is under progressFY11 production output of 0.2 Mt by 4Q11 is still on track
1.51.62.1
1.1 1.3 1.5
1Q 2Q 3Q 4Q
SR : 11.0
11.411.4
10.5
FY10 Output: 5.5 Mt; FY11 Target: 7.3 Mt
20102011
10.0
Volume : 1.7
11.9
18
Bharinto and Td.Mayang (overview)
Bharinto Tandung Mayang
First output 0.2mt (4Q 2011) 0.5mt (3Q 2011)
Target annual output 2 - 4 Mt 2 - 3 Mt
Coal quality (adb) 6,800 kcal/kgSulfur 0.8%
6,800 kcal/kgSulfur 1.5%
Reserves 45.5 Mt 9.7 Mt
Strip ratio (avg.) 7.8 bcm/t 15.0 bcm/t
Logistics to ship Truck – Bunyut barge loader Truck – BoCT ship loader
Capital expenditure US$ 44 m(US$ 39 M spent-to-date)
US$ 30 m(US$ 26 M spent-to-date)
19
Bharinto Schematic
Construction commenced Q309
2004
2006 2009 2010 2011
Acquired concession
Feasibility study First output: 0.2 Mtpa
2007 2008
2005
Bharinto project timeline
HIGH WALL BENCHES
A B
Cross section schematic
Approx depth
90 metres
ILLUSTRATIVE ONLY
Aerial view schematic
SECTION LINE
A
B
BUNYUT PORT
TRUBAINDO NORTH BLOCK
15 KM.
MAHAKAM RIVER
BHARINTO
TRUBAINDO SOUTH BLOCK
Total 84 km
CR4
20
Tandung Mayang Schematic
2003
2004 2011
2015/16
Operation ceased
Tandung Mayang unit worked as contractor on adjacent IMM concession
2005 2006 2007
2008
Feasibility study
2009 2010
Closure process
Tandung Mayang project timeline
Aerial view schematic
BONTANG COAL
TERMINAL
BONTANG
CITY
INDOMINCO
WEST
BLOCK EAST
BLOCK
TANDUNG MAYANGSECTION LINE
MINED OUT AREA
A B10 km
CR1 CR2CR3
Operation to restart in 3Q11
A B
OB
Cross section schematic
Mined out (Indominco) TM extension
ILLUSTRATIVE ONLY
HIGH WALL
BENCHES
Approx depth
160 metres
21
Indicative ROM output targets
Bharinto
Tandung Mayang
2011 2012 2013 2014 2015
6.7 6.9 8.1 8.2 8.2
16.0 7.2SR (bcm/t)
SR (bcm/t)
INDICATIVE ONLY
0.2 0.7
2.03.0
4.0 4.0
[16.0]* 16.0
0.5
2.9 2.5 2.0
0.4 0
In million tonnes (Mt)
8.1
* Actual strip ratio will be higher (approx 28x) but will include advanced overburden removal which will be amortized over the life of the mine
na na
Kitadin Embalut and Tandung Mayang
Balikpapan
MahakamRiver Samarinda
to Muara Berau
Bontang city
EMBALUT
Embalut Port
to Muara Jawa
ROM stockpile
Operations
Stockpile
Ports
Hauling
Crusher
0 106 82 km4
5km Mine to port
TD. MAYANG
EAST KALIMANTAN
IMM EB
KITADIN SCHEMATIC
IMM WB
Bontang Port
22
KITADIN EMBALUT PRODUCTION ANALYSIS
MAJOR QUARTERLY UPDATES
Kitadin Embalut: 1H11 production achieved as plannedExpect lower production during 2H11 due to difficult mining conditions (hard-band materials)
Kitadin Tandung Mayang: Currently works as mining contractor at Indominco areaAlready started the pre-stripping activity in1Q111st coal output will start in 3Q11Expected total production in 2011 will be 0.5 Mt
0.30.40.2
0.3 0.3 0.3
1Q 2Q 3Q 4Q
SR : 10.410.6 10.7 10.8
FY10 Output: 1.2 Mt ; FY11 Output Target: 1.0 Mt
20102011
8.9
Volume : 0.3
8.7
KITADIN TD.MAYANG PRODUCTION ANALYSIS
0.1
1Q 2Q 3Q 4Q
FY11 Output Target: 0.5 Mt
Volume : 0.0 0.0 0.0 0.0 0.0 0.0
20102011
Jorong
Coal terminal
Jorong
Pelaihari
Pacific Ocean
Haul road
Operations
Stockpile
Hauling
Barge Port
0 10 2515 205 km
20km
JORONG SCHEMATIC
23
JORONG PRODUCTION ANALYSIS
MAJOR QUARTERLY UPDATES
1H11 production achieved higher than plan due to better performance in mud management
Adjusted strip ratio in this year to match with remaining reserves and to keep up with the current mining sequence
0.30.4 0.30.1
0.4
1Q 2Q 3Q 4Q
SR : 6.9
6.9
6.9
6.9
0.0
FY10 Output: 0.9 Mt ; FY11 Output Target: 1.0 Mt
8.6
Volume :201020110.4
8.6
Agenda
24
3. Commercial Review
Main Driver for 2011 Coal Market
25
Weather Chinese Demand World Growth
Sources: Country Forecast July 2011 from The Economist Intelligence Unit Limited 2011
• World growth forecast 3.1%, Asian growth forecast 6.9%
• Uncertainty impacting forecasts due to European and USA debt concerns, Middle East/N. Africa unrest , exchange rate trends and inflation
• But oil, food and raw material cost will have a gradual impact
• Indonesia wet season was normal, but some operations more affected than others. Dry season seems normal to good.
• Chinese winter was normal but now that water shortages are eased, hydro is up and summer so far mixed
• Australian storms/floods damage recovering
• Downgrade import forecast
• Demand is stronger than expectations in total but unevenly distributed
• Grid transmission/generation infrastructure capped effective demand in 1H
• Production increased beyond demand increase, but again levels vary by region
• Imports weak in 1Q, strong in 2Q but likely below expectations in 3Q/4Q
Thermal Coal Benchmark Prices
Coal price benchmarksIndonesia rate of price decrease recently due coincidence of Chinese purchase slows down and Indonesia production increases
Benchmark pricing held up by steady growth but more to currency and financial movements impacting paper prices
European pricing further underpinned by higher cost of competing fuels, eg. gas and declining carbon credit price
60
70
80
90
100
110
120
130
140
150
Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11
US$
/ to
nne
FOB Richards Bay 6000 kcal/kg, NAR
FOB Newcastle 6300 kcal/kg, GAR
FOB Kalimantan 5900 kcal/kg, GAR
FOB Kalimantan 5000 kcal/kg, GAR
Newcastle price stable RB and domestic prices softening
26
Thermal coal market analysis – 2Q 2011 update
27
USAThermal supply
increase for export fromAtlantic ports. Pacific
deliveries continue
INDIARecovery and growth
Continue, but questionsFor post monsoon
EAST ASIAJapan coming back to normal;
Korea and Taiwan strong recovery
SOUTH AFRICAContinuing problems in rail eases short term. Longer term issuesre national policy
appearing
AUSTRALIAFlood impacts largely
Overcome while rail andSome mine bottlenecks
continue to be limits
COLOMBIAPrices capped by tonnage
returning to Atlantic
RUSSIARising production and
Rail availability supportsLimited export increase
CHINAImport slower than expectation,
LCV/off-spec coal
= Demand/Supply
= Demand
REST OF ASIAContinued growth
INDONESIA2Q saw commencement of
Normal dry season increases
ATLANTICIncreased demand due toHigher gas prices, nuclear concerns and low carbon
credit price
= Supply
ITM Average Selling Prices
28
USD per tonne
Quarterly BJI
Quarterly ASP
BJI* Aug 04, 2011$120.55
ASP 1Q11 $87.3/tASP 2Q11 $97.4/t
ASP vs. spot BJI trend shows a mix of pricing (LT/MT/ST)
Despite increases in product margins, the increase in lower CV tonnages hampers ASP increases
Still, higher CV coal has increased relative to index, JPU or spot price
30507090
110130150170190
Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11
Monthly BJI Monthly ASP
3%
97%
Indicative 2011 Coal Sales
29
Coal sales contract and pricing status CommentCoal sales contract and pricing status
Sales target remains at 25 Mt, assuming dry season continues
Almost fully sold and more so than at same time in recent years
Remaining unsold is exposed to market fluctuations, but limited volume
Contract Status Price Status
Contracted Fixed
Uncontracted
Unpriced
Index
TARGET SALES 2011: C. 25 Mt
82%
14%4%
Coal Sales by Geographic Destination
JAPAN (21%)
INDIA (10%)
INDONESIA (6%)
PHILIPPINES (6%)
HONG KONG (3%)
TAIWAN (8%)
S.KOREA (3%)
THAILAND (8%)
2011 trend expectation
2011
*Includes small, non-regular purchasers
Coal sales 1H11 (total 10.7 Mt)
OTHERS* (0%)
ITALY (9%) 2011
CHINA (21%)
2011 2011 2011
2011
20112011
2011
30
2.3
3.5
4.5
1.5
2.3
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
6M10 9M10 FY10 3M11 6M11
0.8 1.2
1.8
0.3 0.4 -
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
6M10 9M10 FY10 3M11 6M11
2011
0.6 1.0 1.2
0.1 0.4
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
6M10 9M10 FY10 3M11 6M11
2.7
3.6
5.1
1.2
2.3
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
6M10 9M10 FY10 3M11 6M11
0.9 1.2
1.8
0.5 1.0
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
6M10 9M10 FY10 3M11 6M11
1.1
1.8
2.4
0.3
0.9
-
0.5
1.0
1.5
2.0
2.5
3.0
6M10 9M10 FY10 3M11 6M11
0.8 0.9 1.1
0.3 0.6
-
0.2
0.4
0.6
0.8
1.0
1.2
6M10 9M10 FY10 3M11 6M11
0.3 0.4 0.5 0.1
0.7
-
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
6M10 9M10 FY10 3M11 6M11
0.7
1.1
1.5
0.5 0.8
-
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
6M10 9M10 FY10 3M11 6M11
0.4 0.7 0.9
0.6 1.0
-
0.2
0.4
0.6
0.8
1.0
1.2
6M10 9M10 FY10 3M11 6M11
0.1 0.2 0.2 0.0 0.0
-
0.1
0.1
0.2
0.2
0.3
6M10 9M10 FY10 3M11 6M11
Thank you
31
