2Q09 results and comments

Transcription

1 2Q09 results and comments INVESTOR & ANALYST UPDATE 17 August

2 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 Banpu plc. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction. 2

3 1. Introduction 2. Focus: Indominco East Block 3. Operational review 4. Commercial review 5. Financial review 3

4 1. Introduction Virach Makaranithiroj Head of Investor Relations 4

5 Banpu in 2Q09: the figures Coal sales 4.51 Mt Unit: Bt. million Up 0.4 Mt Coal Power Total 10% Q-Q Y-Y Q-Q Revenue 11,889 1,043 12,932 17% -5% Equity income 1,762 1,249 3, % 46% EBIT 5,056 1,350 6,406 87% -2% Net income 2,815 1,167 3,982 73% -17% 5

6 2. Focus: Indominco East Block Neil Turvey Head of Technical Development & Services 6

7 East Block summary First output: Target output: Coal quality: Reserves: Logistics: SR: Capex: April Mt in 2009 rising to 11 Mtpa by ,050 kcal/kg, sulfur 1.7% 103 Mt reserves, 448 Mt resources (Dec 08) Shorter haul distance to Bontang (vs W Block) Target average x $20M (>80% to be spent in 2009) 7

8 East Block reserves vs West Block (Dec 08) OB 460 M bcm West Block East Block OB 845 M bcm Average SR 8.2 bcm/t Average SR 12.8 bcm/t Reserves 103 Mt Coal characteristics West Block East Block GCV (kcal/kg) 6,220 6,050 Reserves 36 Mt Sulfur 0.8% 1.7% Moisture 11.1% 13.6% Ash 4.1% 3.4% 8

9 East Block timeline Rapid mobilization of only a month after final forestry access granted Construction of 7.5 Mtpa coal handling facility on schedule Anticipated maximum potential production of 11 Mtpa in 2015 East Block feasibility study Mobilization to site Feb 09 Final forestry access granted Jan Q 10 Completion of crushing and coal handling facilities 7.5 Mtpa Commenced operation and completion of temporary crushing and coal handling facilities Apr Potential Production of 11 mtpa 9

10 Indominco and Bontang schematic map Operations WEST BLOCK ROM stockpile Santan River EAST BLOCK ~10 Km km Asphalt haul road Port stock yard 17 Km. Ports Hauling Stockpile Crusher Bontang City Sea conveyor 2.5 km Panamax 95,000DWT Inland conveyor 4km BONTANG COAL TERMINAL Manage West Block and East Block as one operation with shared infrastructure, equipment and logistics Incremental capex for development of East Block is minimal (only $20M) East Block is ~10km closer to Bontang Coal Terminal so reduced haulage costs 10

11 East Block focus map Pit 7A To West Block Pit 2A Pit 11C Pit 19A East Block will have multiple pits Temporary crushing and coal handling facility installed April 09 (ahead of schedule) Pit 7C Pit 11A Pit 10A Pit 9A Pit 8A Pit 10C Pit 11B To Bontang Current operating areas are in the mid-south of East Block center Located in the south is a large pit with thicker seam and ~1/3 of total East Block reserves Pit 19D 11

12 Cross sections at East Block Cross Section 1-1 PIT 7C OB Coal seam High wall PIT 8A 1 PIT 10C Note: Cross section 1-1 is not drawn to scale 12 12

13 Indominco output target (indicative only) Targeted output may be impacted by bad weather, economics (e.g. coal and oil prices) and other factors As output at East Block increases, output at West Block will decline from around 10Mt in 2009 to around 4Mt by 2013/ Mt 9-11 Mt ~2 Mt* Mt 7-8 Mt 4-5 Mt Mt 5-6 Mt 7-8 Mt Mt 5-6 Mt 7-8 Mt Mt 4-5 Mt 8-10 Mt Mt 3-4 Mt 9 11 Mt Mt Mt * Mt 13

14 Conversion of resources to reserves at East Block Conversion of resources to reserves expected, but will depend on: 1.Exploration (geological and geotechnical) to better define deeper coal resources 2.Study on deeper mining potential using electric equipment (e.g. in pit crusher, conveyor, spreader ) Proved 77 Mt Probable 26 Mt Reserves conversion? Resources 448 Mt 14

15 East Block site photos Permanent crusher 3 Pit 7C 2 Temporary crusher 4 Pit 8A : OB excavation and coal mining 15

16 3. Operational review Rawi Corsiri Chief Operating Officer 16

17 3. Operational review i) Coal business 17

18 Indonesian coal operations in 2009 ITM OPERATIONS & PROJECTS Showing targets for saleable coal output in 2009 Central Kalimantan TRUBAINDO 5 Mt Bunyut Port BHARINTO (Start by end 2010) East Kalimantan INDOMINCO 13 Mt Samarinda Balikpapan Bontang Coal Terminal Captive coalfired power project KITADIN Coal output : 2Q09 : 4.9 Mt 2009 : 20.5 Mt target Project update: Indominco East Block: start production as planned Palangkaraya South Kalimantan Indominco Underground: feasibility analysis and pilot mine underway POWER COAL Project Operation Project Banjarmasin JORONG 2.5Mt Jorong Port Bharinto: on-going development to commission by end

19 Indonesian quarterly output and SR analysis STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) STRIP RATIO (bcm/t) Q08 4Q08 1Q09 2Q09 3Q08 4Q08 1Q09 2Q09 3Q08 4Q08 1Q09 2Q09 COAL OUTPUT (Mt) 3.5Mt COAL OUTPUT (Mt) COAL OUTPUT (Mt) 2.8Mt 2.7Mt 2.7Mt 2.4Mt 1.3Mt 1.1Mt 1.2Mt 1.3Mt 1.4Mt 0.5Mt 0.6Mt 0.9Mt 0.8Mt 0.7Mt 3Q08 4Q08 1Q09 2Q09 3Q09e Indominco-Bontang CV: kcal/kg Maintain high SR; East block operation started as planned 3Q08 4Q08 1Q09 2Q09 3Q09e Trubaindo CV: kcal/kg Production slightly higher than plan due to favorable weather 3Q08 4Q08 1Q09 2Q09 3Q09e Jorong CV: 5300 kcal/kg Additional excavators resulted in smooth production Note: output figures are saleable coal 19

20 China coal operations in 2Q09 BANPU CHINA 2009 COAL PRODUCTION TARGETS* PRICE vs. COST (RMB/ t) AVERAGE COAL PRICE PRICE vs. COST (RMB/ t) AVERAGE COAL PRICE Gaohe (45%) Shanxi Province Q08 1Q09 2Q09 PRODUCTION COST Q08 1Q09 2Q09 PRODUCTION COST BEIJING COAL OUTPUT (Mt ROM) COAL OUTPUT (Mt ROM) Daning (56%) Shanxi Province 4 Mt 1.25Mt 1.16Mt 1.31Mt 0.91Mt 0.36Mt 0.40 Mt 0.36Mt 0.37 Mt HZTM (40%) Henan Province 1.4 Mt 2Q08 1Q09 2Q09 3Q09e Daning 2Q08 1Q09 2Q09 3Q09e Hebi Zhong Tai Mining POWER COAL Operation Project Operation Project * ROM production CV: Kcal/kg Banpu 56% Lower production cost due to higher output 3Q production will slow down due to L/W relocation in late Aug early Sep CV: Kcal/kg Banpu 40% 1st ranking among Hebi coal group on the engineering quality standard inspection 20

21 3. Operational review ii) Power business 21

22 Power Thailand : BLCP Units: Bt. Million (100% basis) Total revenue Availability Payment (AP) Energy Payment (EP) Dispatch (%) Operating cost EBIT EBITDA Equity income 2Q09 Bt 1,249 m* 1Q/09 5,446 2,975 2,322 94% 2,475 2,497 2,971 2Q/09 5,430 2,992 2,289 95% 2,551 2,371 2,879 Q-Q 0% 1% -1% 3% -5% -3% * Based on Banpu s 50% interest; including FX gain Bt268million 22

23 Power China : BPIC in 2Q09 Sales* (USD m) EBITDA (USD m) Utilization (Hours) Power tariff (RMB/kwh) Coal price** (RMB/t) Lower sales due to maintenance; however, lower coal price caused higher EBITDA Luannan Hebei Province, PRC Power 100MW; Steam 128tph (Banpu 100% ) 2Q , Q , Q , Power and steam sales affected by weakened economy; however, lower coal price caused higher EBITDA Zhengding Hebei Province, PRC Power 48MW; Steam 180tph (100%) 2Q , Q , Q , Higher power sale due to local economy started to recover and lower coal price caused higher EBITDA Zouping Shandong Province, PRC Power 100MW; Steam 430tph (70%) 2Q , Q , Q , * Unaudited figures ** Including transportation (100% basis) 23

24 4. Commercial review Rawi Corsiri Chief Operating Officer 24

25 Banpu average selling prices in 2Q09 Banpu ASP Coal vs oil price relativity USD per tonne ASP 2008 $72 /t ASP 2Q09 $73.9 /t Quarterly BJI Rebase to WTI spot price API#4 FOB Richards Bay 150 Monthly BJI 300 FOB Newcastle 130 Monthly ASP Quarterly ASP As at Jul 24th $78 (+51%) $62 (+24%) $64 (+14%) 50 BJI* Aug 13, 2009 $ Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 0 Jan-07 Aug-07 Feb-08 Sep-08 Apr-09 Jun-09 25

26 Thermal coal market analysis Seaborne thermal coal trade 600 Mt FOB cash costs per tonne FX/USD $39 Australia Mt $75 Russia 0.04 $49 Australia Mt $85 Russia 0.04 $57 1Q forecast Mt Mt Australia $67 Russia Q View of 2009 vs 2008 Demand Europe down 15% E Asia down 10% Indonesia up 3 Mt India up 5 Mt Buyer stock adequate USA imports down But China up 20 Mt Supply Price positive/neutral Indonesia flat, slightly up Russia down marginally N.America falling in 2009 S.Africa flat China down 20 Mt Price negative Australia up 10 Mt (but infrastructure limitations) Petroleum coke up Current View of 2009 vs 2008 Demand Europe down more E Asia down 10%, improving But China up 25 Mt thermal Supply Price positive/neutral Indonesia slightly up/ dry season N.America down dramatically S.Africa flat, diverts to Asia Petroleum coke levels offs, price up. Metallurgical reversing 1Q trend, exit thermal market Price negative Source: McCloskey, Wood Mackenzie, Banpu Analysis 26

27 Indicative 2009 coal sales Coal sales contract and pricing status Comment Contract Status Contracted 99% Price Status Fixed 90% Indonesian low CV grades sold out Thai coal trickle due to re-processing rejected material also sold Effectively committed remaining high CV grades with carryover to % Uncontracted 1% Unpriced TARGET SALES 2009: 20.5 Mt 2% 7% Index Price under negotiation EU contracts linked to API # 4 index; some Asian sales linked to GlobalCOAL Newcastle index. 27

28 Coal sales by geographic destination (ITM and Thai) Cumulative coal sales 6M09 (total 8.6Mt) ITALY CHINA 1.7Mt 0.1Mt HONG KONG 0.4Mt 0.1Mt 6M 08 9M M 09 6M S.KOREA 2.3Mt Mt 0.5Mt 1.7 JAPAN 4.0Mt Mt 1.1Mt 6M 08 9M M 09 6M 09 6M 08 9M M 09 6M Mt Mt 0.3Mt INDIA 6M 08 9M M 09 6M 09 6M 08 9M M 09 6M Mt 0.9Mt TAIWAN OTHERS* 0.2Mt M 08 9M M 09 6M Mt 0.9Mt Mt Mt THAILAND 2.8Mt INDONESIA PHILIPPINES 0.3Mt 6M 08 9M M 09 6M M 08 9M M 09 6M 09 *Includes small, nonregular purchasers Mt 0.3Mt Mt 0.6Mt 0.3Mt Mt 0.9Mt 0.4Mt Mid-to-High CV Low-to-Mid CV 6M 08 9M M 09 6M 09 6M 08 9M M 09 6M 09 6M 08 9M M 09 6M 09 28

29 China thermal coal market review Datong super mixed coal (6,000 kcal/kg) Shanxi super mixed coal (5,500 kcal/kg) Common mixed coal (4,000 kcal/kg) , RMB Aug RMB 545 Aug RMB 350 Aug 09 Comment Based on the current economic situation, major coal producing regions like Shanxi and Henan province, still put a cap on production Coal imports surge on higher domestic coal prices but exports down China s coal production, transport and demand will continue the growths seen in May and June; China may see growing pressure from coal oversupply in the second half of the year Coal demand in China is expected to increase slowly in the second half as the overall economy is still on the way of recovery 0 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 Domestic price should ease, but while medium term government policy is unclear, no clear trend for end 2009/2010 Source: 3 August,

30 5. Financial review Somruedee Somphong Chief Financial Officer 30

31 Sales revenues Units: Bt. million 13,624 (939) (104) (225) 12, % Y on Y -5% Q on Q 11,068 Higher selling price Sale volume up 47% QoQ Lower selling price Higher sale volume by 4% QoQ 2Q08 1Q09 Indominco Trubaindo Jorong Coal Thailand Others BPIC 2Q09 31

32 Average gross margin for coal 53% Bt 7,891 M Bt 6,952 M Bt 6,008 M Coal sales (Bt millions) 55% 53% Bt 3,240 M Bt 3,813 M Bt 3,709 M Gross margin (%) 39% 60% 60% 56% Bt 651M 37% Bt 1,140 M Bt 605 M 47% 35% Bt 88 M Bt 35 M Bt 45 M -25% -28% -23% 2Q08 1Q09 2Q09 2Q08 1Q09 2Q09 2Q08 1Q09 2Q09 2Q08 1Q09 2Q09 Indominco Trubaindo Jorong Thai mines 32

33 Consolidated EBITDA Units: Bt. million 7,080 (572) (134) (173) (89) (7) 6, % Y on Y -3% Q on Q 3,899 Withholding tax expenses Bt215m from dividend received from Indonesia Power Bt1,450m -1% Q on Q +70% Y on Y Coal sales revenue decreased 5% QoQ Higher equity income from China Coal Coal Bt5,383m -4% Q on Q +77% Y on Y 2Q08 1Q09 Gross profit SG&A Royalty Equity Other Incomes incomes China Coal Other expenses D&A coal EBITDA Power 2Q09 33

34 Consolidated net profit Units: Bt. million 185 (556) 4,798 (151) (13) 719 (1,022) 23 3,982 2, % Y on Y -17% Q on Q Lower gain from financial derivatives (coal swap) Power Bt1,167m +2% Q on Q +98% Y on Y Strengthening of THB and weakening of Indonesia Rupiah Coal Bt2,815m -23% Q on Q +65% Y on Y 2Q08 1Q09 EBIT Financial charges Tax Minority Nonrecurring FX Net Profit POWER 2Q09 34

35 Organic capital expenditure plans 2009 Units: USD million Indominco underground 82 Indominco electrification Trubaindo mobile crusher, wash plant Tandung Mayang fleet expansion Bontang port expansion Bharinto Bontang power plant Indominco East Block Improvement initiatives Gaohe (45% Equity interest) The capital expenditure figures shown above do not include estimates for maintenance or sustaining capital expenditure. 35

36 Balance sheet Net D/E (Times) Net gearing (%) Debt structure 0.66 Fixed 37% Floating 63% 25% 40% % 26% 20% Q09 As end of June

37 Questions & Answers 37

38 APPENDICES 38

39 Operating profit Units: Bt. million 2Q09 1Q09 2Q08 QoQ % YoY % Total sales revenues* 12,932 13,624 11,068-5% 17% Sales revenues Coal 11,846 12,344 10,007-4% 18% Sales revenues Power (BPIC) 1,043 1,269 1,041-18% 0% Cost of sales (6,431) (6,451) (6,488) Gross profit* 6,501 7,173 4,580-9% 42% Gross profit - Coal 6,260 6,835 4,478-8% 40% Gross profit Power (BPIC) % 150% GPM 50% 53% 41% GPM - Coal 53% 55% 45% GPM Power (BPIC) 22% 26% 9% Note: * Including other business 39

40 Operating profit Units: Bt. million 2Q09 1Q09 2Q08 QoQ % YoY % Gross profit 6,501 7,173 4,580-9% 42% GPM 50% 53% 41% SG&A (1,270) Royalty (1,457) Income from associates 3,011 Dividend income Coal & Power - Other income 95 Other expenses - Operations (473) (1,148) (1,548) 2, (300) (1,139) (1,227) 866 EBIT 6,406 6,558 3,419-2% 87% EBIT - Coal 5,056 5,207 2,635-3% 92% EBIT - Power 1,350 1, % 72% EBITDA 6,833 7,080 3,899-3% 75% EBITDA - Coal 5,383 5,623 3,049-4% 77% EBITDA - Power 1,450 1, % 70% (65) 40

41 Net profit Units: Bt. million 2Q09 1Q09 2Q08 QoQ % YoY % EBIT Interest expenses (332) Financial expenses (47) Income tax (core business) (878) Minorities (736) Net profit before extra items 4,413 Non-recurring items* 205 Net profit before FX 4,618 4,411 2,063 5% 124% FX translations (635) Net profit 3,982 4,798 2,299-17% 73% EPS (Bt/share) Note: * Income from non-core assets and other non-operating expenses 6,406 6,558 3,419-2% 87% (348) (31) (1,591) (937) 3, (229) (32) (642) (382) 2,134 (72) % 107% 41

42 Coal mining process Clear and grub land clearing handled by truck and shovel: stripping of top soil; drilling and blasting to remove overburden; waste and top soil is transported to a disposal or reclamation area; recovered coal is delivered to the respective mine stockpile facilities Dumping Activity From the ROM stockpile, coal is crushed and stacked. Mine Reclamation At Indominco, the coal is washed and blended Clear & Grub Activity ITM engages mining contractors to perform mining operations at each of the concession areas. Each mining contractor must supply all necessary equipment and working capital. Mining contractors are also engaged to manage the stockyards and transport processed coal. Overburden Removal + Blasting Coal Mining ROM Stock Coal Crushing Coal Washing Coal Loading Coal Hauling to Port Oversea Conveyor Overland Conveyor Mine Stockyard Port Stockyard 42