13 August 2012
ANALYST BRIEFING2Q12 performance results
Disclaimer
2
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
Agenda
3
1. Introduction
2. Operational review
3. Commercial review
4. Financial review
Appendices
Disclaimer
4
Agenda
1. Introduction
ASP (/t)
Revenue
GPM
EBIT
Income
Highlights of 2Q12 and 1H12 Results
5
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12E
Units: Mt
5.8
6.77.2
5.7
Up 1.1 Mt+18% Q-Q
Up 1.0 Mt +17% y-y
1Q12 2Q12 QoQ 1H11 1H12 YoY
$101.1 $94.6 -6% $92.2 $97.7 +6%
578 626 +8% 970 1,204 +24%
36% 31% -5% 35% 34% -1%
169 152 -10% 268 321 +20%
124 122 -2% 205 247 +20%
6.87.1
Indominco
Trubaindo
Kitadin
JorongBharinto
QUARTERLY OUTPUTFINANCIAL SUMMARY
Coal sales6.62 MtUp 0.9 Mt +15% Q-Q
Coal sales12.37 MtUp 1.7 Mt +15% y-y
Disclaimer
6
Agenda
2. Operational review
Indominco Mandiri
7
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
Post Panamax
95,000DWT
SCHEMATIC
10.9
13.1
10.9
13.3
10.9
12.5E
BLO
CK
WB
LOC
K
12.5
13.9 15.8
11.2
E B
LOC
KW
BLO
CK
QUARTERLY OUTPUT
MAJOR QUARTERLY UPDATES
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
1.62.1 2.1
1.62.1 2.0
1.8
2.1 2.0
1.41.4 1.8
3.4
4.2 4.1
3.03.5
3.8
2Q12 production was slightly below plan due to weather issue.Will lower strip ratio during 2H12 to reduce production cost due to declining coal price.IPCC system: On process of importing the crusher and conveyer unit.Port expansion: Conducted an external study to expand existing capacity at Bontang port.
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
13.8
10.5
2012 Target: 15.0 mt
Units: Mt
Units: Bcm/t
Trubaindo and Bharinto
8
1.7 1.8 2.11.7 2.0 2.0
0.21.7 1.8
2.11.7
2.02.2
Mahakam River
South Block 1(Dayak Besar)
North Block
40kmMine to port
KedangpahuRiver
ROM stockpile
BunyutPort
0 10 2515 205 km
Product coal conveyor, stacking,
stockpile
EAST KALIMANTAN
Bharinto 60km south west of
TrubaindoNorth Block
South Block 2(Biangan)
PT. BHARINTO
PT. TRUBAINDO
SCHEMATIC
TRU
BA
IND
O11.8 14.1 12.4 13.4 13.5
Operations
Stockpile
Hauling
Barge Port
TRU
BA
IND
OB
HA
RIN
TO
QUARTERLY OUTPUT
MAJOR QUARTERLY UPDATES
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
Trubaindo: 2Q12 production was slightly higher than plan due to higher coal in-pit inventory.Port expansion: under process of reviewing consultants for detail designs.
Bharinto: Coal mining activities already started since April 2012 while 1st coal hauling activities started on 1st May 2012.
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
11.7
2012 Target TCM : 7.1 mtBEK : 0.7 mt
Units: Mt
Units: Bcm/t
Balikpapan
MahakamRiver Samarinda to Muara Berau
Bontang city
EMBALUT
Embalut Port
to Muara Jawa
ROM stockpile
Operations
Stockpile
Ports
Hauling
Crusher0 106 82 km4
5km Mine to port
TD. MAYANG
EAST KALIMANTAN
IMM EBIMM WB
Bontang Port
Kitadin Embalut and Tandung Mayang
9
SCHEMATIC
0.3 0.3 0.4 0.3 0.3 0.3
0.4 0.5 0.7 0.60.3 0.30.8 0.8 1.0 0.9
11.511.28.712.0 11.7
TDM
EM
BE
MB
QUARTERLY OUTPUT
MAJOR QUARTERLY UPDATES
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
15.1
TDM 15.1 15.1 15.1
Kitadin Embalut:
2Q12 production achieved as according to plan.
Kitadin Tandung Mayang:
2Q12 production achieved slightly higher than plan.
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
11.7
15.1
2012 Target EMB : 0.7 mtTDM : 2.7 mt
Units: Mt
Units: Bcm/t
Jorong
10
0.4 0.4 0.3 0.3 0.40.2
Coal terminal
Jorong
Pelaihari
Pacific Ocean
Haul road
0 10 2515 205 km
20km
MAJOR QUARTERLY UPDATESSCHEMATIC
8.68.68.6 8.6 8.6Operations
Stockpile
Hauling
Barge Port
QUARTERLY OUTPUT
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
• 2Q12 production achieved above the plan due to better optimization of the mining equipment.
• Annual production output is expected to be slightly higher than plan.
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
8.6
2012 Target JBG: 1.0 mt
Units: Mt
Units: Bcm/t
Disclaimer
11
Agenda
3. Commercial review
12
2Q 2012 seaborne thermal coal market drivers
• Downward trend in sentiment, despite global coal trade expanding.
• Uncertainty impacting forecasts due to European debt concerns, and GDP and employment levels generally.
• Uncertainty of rate/timing of Chinese import increase.
• USA exports high until end 2012, then unhedged prices vs. cost should impact.
• Gas prices support coal demand in Europe but opposite in USA with diverted coal to export.
• 2012 world growth forecast 2.1%* (Prev. 2.2%**) ; Asian growth forecast 6.0%* (Prev. 6.5%**).
*Country Forecast August 2012 from The Economist Intelligence Unit Limited 2012 as of 16 July,2012**Macroeconomic Assumptions as of April 2012
• Indonesia normal. Stocks built up.
• Chinese winter/summer normal. Good rains increase hydro.
• Australia nothing significant.
• USA mild 1H, reduces demand.
• GDP growth declining possibly below announced levels.
• Coal production increased beyond demand increase.
• Imports in 1H, double 1H 2011.
• Policy uncertainty and level of planned stimulation affecting confidence.
• Results in high stock and low domestic price.
WEATHER CHINESE DEMAND OTHER DRIVERS
13
MEDIUM TERM TREND LONG TERM TREND
2012: year of coinciding extremes• Cheap shale gas creates excess coal
stocks in the US• High coal prices and very low freight
rates allow US to export its coal• Most exports hedged to end 20122013: year of adjustmentAtlantic• Re-adjust and cutback traditional US
exports of high quality, high cost products• More demand for Russia, Colombia, S.
Africa to balance sulfurPacific• Significant reduction of Atlantic coal starts• Supply reduced due output cuts.
USA• Increasing share of natural gas
consumption in the local markets• Higher USA growth prospects due to
lower energy cost• Coal industry adjusts by rationalization• Exports have higher percentage of high
sulfur productsChina / Australia• More difficult to extract shale gas
reservoirs. Early days • Consumption and delivery of pipeline is
likely to be delayed• Wood Mackenzie expects that shale gas
in China will not be significant before 2020.
US shale gas: medium and long term trends
14
US Shale gas: limited threats from US coal exports to Asia
LOW US GAS PRICE IS UNSUSTAINABLE US COAL AND NATURAL GAS PRICES
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2014201320122011201020092008
Central Appalachian coal
Henry Hub natural gas
> US$4/mmbtuby 2013
Source: Wood Mackenzie, EIA, Bloomberg, AWR Lloyd estimates
Woodmac
Powder River Basin coal (PRB)
US$/mmbtu• Domestic gas demand is likely to rise from additional US petchemexpansions and NGV vehicles
• 2011 winter was unusually warm
• Avg. breakeven price for shale gas at $3.8/mmbtu vs. 1Q low point of $1.9/mmbtu
• PRB coal remains competitive to gas and is less impacted by cheap gas. Delivered cost to Asia above discounted Indonesian sub-bituminous product.
15
US Shale gas: limited threats from US coal exports to Asia
US COAL EXPORTS TO ASIA IS LIMITED US COAL EXPORT BREAKDOWN (Mt)
139 8
18
262
3
2
7
2010
23
4
1
2009
20
1 1
2008
3534
40
1Q12 annualised
Others
2011
AfricaAsia
Europe
7
1
Source: Wood Mackenzie, EIA, Bloomberg, AWR Lloyd estimates
1Q12YoY-0.3 Mt (-1.2 Mt)**QoQ+0.5 Mt(+2.0 Mt)**
** annualised
• Majority of additional export went to Europe and North America.
• In 1Q12, YoY growth for coal exports to Asia actually declined
• Challenging economics for export to Asia over LT
• High FOB cost – c.U$70/t for PRB coal (5,00kcal/kg with low sulfur)
• But some Illinois Basin + Pittsburge 8 seam coals competitive, depending on freight and options in Atlantic.
16
US shale gas: limited threats from US coal exports to Asia
14 16
2012
46
3016
2011
39
25 OthersMobile
2013
50
34
US GULF (Mt)
22 24 25
Hamton Road
Baltimore
2013
91
66
2012
90
66
2011
88
66
Port capacity
2013
155
2012
149
2011
141
141414Port capacity
201320122011
TOTAL US COAL PORT CAPACITY(Mt)
EAST COAST(Mt)
WEST COAST (Mt)
• Potential coal export route to Asia
OperatingOperating w/ planned expansionPlanned
Northern LigniteLow sulfur3,333 – 3,889 kcal/kgNorth PRB
Low sulfur4,833 – 5,278 kcal/kg
S. WyomingLow-Mid sulfur5,000 – 6,667 kcal/kg
South PRBVery low sulfur4,333 – 4,889 kcal/kg
Rocky mountain regionLow sulfur4,444 – 6,667 kcal/kg
Central AppalachianLow to Mid6,667+ kcal/kg
Illinois basinHigh sulfur6,111+ kcal/kg
Gulf ligniteLow to mid sulfur3,333 – 4,444 kcal/kg
Four cornersLow to mid sulfur4,722 – 6,667 kcal/kg
• Future expansions also need to address political and permit issues
Source: Platts, AWR Lloyd estimates
30
50
70
90
110
130
150
170
190
Jan-
07
Apr
-07
Jul-0
7
Oct
-07
Jan-
08
Apr
-08
Jul-0
8
Oct
-08
Jan-
09
Apr
-09
Jul-0
9
Oct
-09
Jan-
10
Apr
-10
Jul-1
0
Oct
-10
Jan-
11
Apr
-11
Jul-1
1
Oct
-11
Jan-
12
Apr
-12
Jul-1
2
17
ITM ASP VS BENCHMARK PRICES
ITM ASPs vs seaborne thermal coal benchmark prices
COMMENTS
Unit: US$/t
Monthly NEXQuarterly ASP
ASP 1Q12 $101.1/tASP 2Q12 $94.6/t
NEX* Aug 02, 2012$88.30
ASP held up well in 1Q 2012, but 2Q market starts to cap and reduce prospects
Continuing pressure from weaker market prices and product mix, impacts ASP and tonnage but not significantly
ITM remains protected by relatively high ‘sold with price’ status (+81%) and negligible reliance of traders as buyers
Also protected by hedge status (+6%).
Indicative 2012 coal sales
18
COMMENTSCOAL SALES CONTRACT AND PRICING STATUS
Contract Status Price Status
Contracted
TARGET SALES 2012: c. 26.5 Mt
Uncontracted
94%
6%
Mostly insulated from market weakness (including hedged tonnes, 87% of sales)6%
81%
13%
Fixed
Indexed
Unsold
19
COAL SALES BREAKDOWN BY DESTINATION 1H12 (Mt) COAL SALES 1H12
Total Coal Sales : 12.4 Mt
29%
15%
10%7%
8%
8%
7%
5%
7% 3%1%
Japan
China
Taiwan
S Korea
Italy
Thailand
Philippines
Hong Kong
India
Indonesia
JAPAN1.9 Mt
PHILIPPINES0.8 Mt
THAILAND1.0 MtINDIA
1.0 Mt
HK0.4 Mt
S KOREA0.9 Mt
CHINA3.5 Mt
TAIWAN0.8 Mt
ITALY0.7 Mt
1.5
INDONESIA1.3 Mt
MALAYSIA0.1 Mt
Malaysia
ITM coal sales 1H12
20
COAL SALES BREAKDOWN BY DESTINATION 2012e (Mt) COAL SALES 2012e
Total Coal Sales : 26.5 Mt
24%
18%
11%9%
7%
7%
5%
5%
5%2%
2% 5%
Japan
China
Taiwan
S Korea
Italy
Thailand
Philippines
Hong Kong
IndiaIndonesia
JAPAN4.7 Mt
PHILIPPINES1.6 Mt
THAILAND1.8 MtINDIA
2.3 Mt
HK0.6 Mt
S KOREA1.3 Mt
CHINA6.3 Mt
TAIWAN1.8 Mt
ITALY1.4 Mt
1.5
INDONESIA2.9 Mt
MALAYSIA0.5 Mt
Malaysia
ITM coal sales 2012e
Others
OTHERS 1.3 Mt
Disclaimer
21
Agenda
4. Financial review
Sales revenue
22
SALES VOLUME REVENUE* GROWTH
2Q11 3Q11 4Q11 1Q12 2Q12
2Q11 3Q11 4Q11 1Q12 2Q12
5.2
6.8 7.1
97.4 98.4
103.1
5.7
101.1
+27% YoY+15% QoQ
-3% YoY-6% QoQ
ASP
2Q11 3Q11 4Q11 1Q12 2Q122Q11 3Q11 4Q11 1Q12
500
675
729
575
+24% YoY+8% QoQ
Units: Mt
Units: US/t
Units: US$M
Indominco
Trubaindo
JorongKitadin
Indominco
Trubaindo
JorongKitadin
6.6
94.6
2Q12
622
* excluding port revenue
Average gross margin
23* COGS included royalty
ITM Consolidated1Q11
502
38%
1Q12 2Q12
578
36%
Indominco Trubaindo Kitadin Jorong
396
28%
180
28%
37% 36
18%
23
23%
46%
17%
Revenue
GPM* (%)
341
27%
228
35%83
42%23
18%2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12
Units: US$M
434
20%
219
30%
95
41%23
26%
626
31%
24
Cash costs
STRIP RATIO CASH PRODUCTION COST
2Q11 3Q11 4Q11 1Q12 2Q12
45.349.3 48.0
51.9
2Q11 3Q11 4Q11 1Q12 2Q12
11.412.3 12.2
13.1
FUEL PRICE TOTAL CASH COST
2Q11 3Q11 4Q11 1Q12 2Q12 2Q11 3Q11 4Q11 1Q12 2Q12
1.10 1.05 1.03 1.0764.6
70.2 71.068.5
Units: US$/t
Units: Bcm/t
Units: US$/Ltr
Units: US$/t13.1
1.07
51.6
70.0
25
Cash Production Cost
0.0
10.0
20.0
30.0
40.0
50.0
60.0
2012 original plan 2012 revised plan
US$/t
Overburden removal costs
Cut Indominco SR:13.2 to 12.9 (and potentially to 12.6)
Cut Trubaindo SR: 13.5 to 12.5
Other pit-operation activities
Waste mining cost
Logistics and overheads
Reduce management overheads
Processing, haulage and port
ILLUSTRATIVE AND INDICATIVE ONLY
INDICATIVE FOB CASH PRODUCTION COSTS PER TONNE
-$3/t
OUTPUT: 27.0 Mt 27.0 Mt
Target reduction
EBITDA
26
*COGS = Prod cost + Transport cost + Inv. movement
Indominco Trubaindo2Q11
Kitadin Jorong1Q12 2Q12
102.2
51.4
8.6 4.4
88.0
64.5
34.8
3.2
78.6
49.239.6
4.2
2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12
+2% YoY-9% QoQ
Revenue1Q122Q11 2Q12
183.8
COGS SellingRoyalty Admin
164.9 167.9
+48.4
Royalty increased with revenues
Higher sales volume by 15%Lower ASP by 6%
(52.5)
CONSOLIDATED
MINE BY MINE
Units: US$M
Units: US$M
(7.0) (2.8) (2.0)
Net income
27
67.6
4.0
33.8
3.2
61.4
23.3
42.5
0.6
55.9
33.8 33.1
2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 2Q11 1Q12 2Q12 2Q11 1Q12 2Q120.1
+8% YoY-4% QoQ
1Q12 2Q12OthersEBIT IncomeTax
DerivativeTransactions
FOREXNet Fin.Charges
2Q11
110.1
124.5122.2
Derivative gain/loss
(17.1)(4.1)
(31.9)
+32.8
CONSOLIDATED
MINE BY MINE
Indominco Trubaindo Kitadin Jorong
Units: US$M
Units: US$M
Higher sales volume by 15%Lower ASP by 6%
(1.1) +19.1
Balance sheet
28
CASH POSITION KEY RATIOS
Units: US$M
DEBT POSITION
Units: US$M
2008
222
2008
11
55
2009
429
2009
2011
612
0
2011
295
2010
0
2010
2Q12
0
2Q12
Net Gearing (%)
Net D/E (times)
(0.34)
(34%)
(0.47)
(44%)
(0.57)
(57%)
(0.41)
(41%)
2008 2009 20112010 2Q12
532
(0.52)
(52%)
1
2
2012 Capital expenditure
29
Unit: US$M
Indominco
Trubaindo
Bharinto
Kitadin
Jorong
ITM Consolidated
65
9
48
133
Realized up to Jun’12
2012 Capex plan
108
80
9
209
6
25
2
Note: Total capex plan includes Jakarta office
11
1
44
Capex postponed
32
76
Disclaimer
30
Question & Answer
Disclaimer
31
Agenda
Appendices
ITM structure and history
32Note: * Updated Coal Resources and Reserves as of 30 June 2012
ITMG
65.00%
Indominco Trubaindo Jorong
PT Indominco Mandiri
(CCOW Gen.I)
PT Trubaindo Coal Mining
(CCOW Gen II)
PT Kitadin-Embalut
(KP)
PT Jorong Barutama Greston
(CCOW Gen II)
50.00%
PT Indo TambangrayaMegah Tbk.
Banpu Minerals (Singapore) Pte Ltd
99.99% 99.99% 99.99% 99.67%
Banpu Minerals Co.Ltd
Reserves 404* Mt
Resources 1,627* Mt
BMS
99.99%
BMC
Banpu PCLBanpu
Public35.00%
Kitadin
PT Kitadin-Td.Mayang
(KP)
BCI50.00%
100.00%Banpu Coal
Investment Co.Ltd
East Kalimantan East Kalimantan South KalimantanEast Kalimantan
INDONESIAN STOCK EXCHANGEIPO 18th Dec 2007
6,500-7,300 kcal/kg6,000-6,300 kcal/kg 5,800 kcal/kg 6,700 kcal/kg 5,300 kcal/kg
Acquired Jorongin 1997 Transferred into ITM 2007
Output 12: 15.0 Mt Output 12: 7.1 Mt Output 12 : 2.7 Mt Output 12 : 1.0 Mt
Bharinto
PT Bharinto Ekatama
(CCOW Gen III)
99.99%
East / Central Kalimantan
6,400-6,800 kcal/kg
Output 12 : 0.7 Mt
Acquired Bharintoin 2004
The “Indocoal” assets
East Kalimantan
165 Mt
695 MtResources
Reserves96 Mt
327 MtResources
Reserves13 Mt
150 MtResources
Reserves112 Mt
298 MtResources
Reserves5 Mt
144 MtResources
Reserves8 Mt13 Mt
Resources
Reserves
33
Income statement
Unit: US$ thousand 2Q12 1Q12 QoQ%
Net Sales 626,403 577,955 8%Gross Profit 196,988 209,207 -6%GPM 31% 36%SG&A (44,897) (40,025) EBIT 152,091 169,182 -10%EBIT Margin 24% 29%EBITDA 164,855 183,851 -10%EBITDA Margin 26% 32%Net Interest Income / (Expenses) 1,660 3,028 FX Gain / (Loss) (6,189) (2,138) Derivative Gain / (Loss) (4,966) 26,916 Others 11,411 (21,492) Profit Before Tax 154,007 175,496 -12%Income Tax (31,763) (50,999) Net Income 122,244 124,497 -2%Net Income Margin 20% 22%
34
Income statement
Unit: US$ thousand 1H12 1H11 YoY%
Net Sales 1,204,358 970,312 24%Gross Profit 406,195 340,848 19%GPM 34% 35%SG&A (84,922) (72,551) EBIT 321,273 268,297 20%EBIT Margin 27% 28%EBITDA 351,718 296,608 19%EBITDA Margin 29% 31%Net Interest Income / (Expenses) 4,688 1,295 FX Gain / (Loss) (8,327) 4,617 Derivative Gain / (Loss) 21,950 4,822 Others (10,081) (5,345) Profit Before Tax 329,503 273,686 20%Income Tax (82,762) (68,356) Net Income 246,741 205,330 20%Net Income Margin 20% 21%