The Performance of Year 2017 Investor Update Analyst Meeting STRONGER FACING CHALLENGES
AGENDA 01 Company overview 02 Financial Performance 03 04 05 Operational Performance Strategy Execution in 2017 Strategy in 2018 PT TIMAH Tbk www.timah.com 2
Company Overview
COMPANY AT A GLANCE The 2nd largest tin producer in the world Building on an impressive tin history of almost 200 years Listed at the Indonesia Stock Exchange (IDX) since 1995 Registered in the London Metal Exchange (LME) for Banka Tin & Mentok Tin The only member company of ITRI with offshore mining operation 4
VISION AND MISSION PT TIMAH Tbk is one of the largest mining and tin mining companies in the world established since the 18th century which later in 1976 became a Limited Liability Company and subsequently registered as a Public Company in 1995 VISION MISSION To be a leading enviromental friendly mining company in the world Building strong, supreme and dignified human resources Implementing the proper and right good governance for mining Optimizing the value of the company and contribution to the shareholders as well as social responsibility PT TIMAH Tbk www.timah.com 5
BOARD OF DIRECTORS M. Riza Pahlevi Tabrani President Director Experienced in Corporate Finance sector over 20 years, before join in PT TIMAH Tbk he was in PT Perusahaan Gas Negara Tbk as a Chief Financial Officer and also become a president commissioner in subsidiaries of PT Perusahaan Gas Negara Tbk. Emil Ermindra Chief Financial Officer Experienced in Banking sector over 23 years, before join in PT TIMAH Tbk he was in PT Bank Negara Indonesia (Persero) Tbk as an EVP Strategic Planning Division Head, EVP Management Office Head, and VP Regional Chief Executive Officer. Alwin Albar Director of Operation Trenggono Sutioso Director of Business Development Experienced in PT TIMAH Tbk over 17 years with several positions such as Head of Business Development, Head of Regional Engineering and Production Experienced in Mining over 17 years, before join in PT TIMAH Tbk he was in PT Rio Tinto Indonesia as Exploration Geologist, PT ANTAM Tbk with several positions such as VP Exploration, Head of Project Development, SVP Corporate Strategic Development, Corporate Secretary. Muhammad Rizki Director of Human Resources Experienced in PT TIMAH Tbk over 20 years with several positions such as Head of Offshore Operation, Head of Logistic, Head of Metallurgy. PT TIMAH Tbk www.timah.com 6
CORPORATE STRUCTURE 1 65% 35% 2 3 4 99,99% 99,99% 99,99% 99,99% 100% 50% 50% 99,80% 99,99% 99,99% 99,99% 1 2 3 4 Pilar 1 : Tin mining Pilar 2 : Downstream Pilar 3 : Non tin mining Pilar 4 : Based on competency 99,99% 99,99% PT TIMAH Tbk www.timah.com 7
Financial Performance
FY 2017 FINANCIAL HIGHLIGHTS Revenue Rp9,217 billion Gross margin 17% Rp502 billion EBITDA Rp1,447 billion STRONGER FACING CHALLENGES As of December 2017 PT TIMAH recorded net profit for the year Rp.502 billion driven by improved operational performance and continue in efficiency. Net profit for the year is increased 2 times compared to last period in 2016 PT TIMAH Tbk www.timah.com 9
FY 2017 NET PROFIT ANALYSIS Variance YoY In billion IDR 2000 +2,249 +1,818 1500 1000 +198 +93 +75 502 500 0 252 Net income FY 2016 Revenue Cost of revenue Opex Others Tax Net income FY 2017 The increase of TINS revenue in the previous year was driven by the increase in sales volume and increase of average refined tin price 19%. On the other hand, the increase of production cost was in line with the increase of refined tin production and royalty payments along with the increase of our sales revenue PT.TIMAH Tbk www.timah.com 10
FINANCIAL PERFORMANCE Revenue In IDR billion 10,000 8,000 6,000 4,000 2,000-7,822 6,239 7,518 6,874 6,968 32% 9,217 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Net income In IDR billion 800 600 400 200 0 432 581 673 102 252 99% FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 502 EBITDA In IDR billion 2,000 1,500 1,000 500-1,077 1,191 1,524 784 1,047 38% 1,447 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 EPS Rupiah/shares 120 100 80 60 40 20 0 86 102 90 FY2012 FY2013 FY2014 FY2015 FY2017 14 371% 66 PT TIMAH Tbk www.timah.com 11
QUARTERLY FINANCIAL PERFORMANCE Revenue In IDR billion Gross profit (in IDR billion) & margin (%) 3,000 2,500 2,000 1,500 1,000 500-2,047 2,253 2,319 2,598 Q1 2017 Q2 2017 Q3 2017 Q4 2017 600 500 400 300 200 100 0 22% 15% 15% 522 14% 298 333 373 Q1 2017 Q2 2017 Q3 2017 Q4 2017 25% 20% 15% 10% 5% 0% EBITDA (in IDR billion) & margin (%) 600 500 400 300 200 100 0 12% 255 332 15% 16% 381 479 18% Q1 2017 Q2 2017 Q3 2017 Q4 2017 20% 15% 10% 5% 0% Net income In IDR billion 250 200 150 100 50 0 3.20% 66 3.80% 85 6.50% 150 7.70% 201 Q1 2017 Q2 2017 Q3 2017 Q4 2017 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% PT. TIMAH Tbk www.timah.com 12
CASH MARGIN PER TONNES In thousand USD/tonnes 25 20 15 10 19.6 19.5 18.8 The highest average tin price The lower 15.5 average tin price 16.7 18.1 5 1.8 3.1 2.8 0.6 1.6 1.6 0 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Cash margin Delivered cost* *) Delivered cost: production cost + marketing cost + administrative cost Stable production cost and as of December 2017 the increase of production cost was in line with the increase of refined tin production and royalty payments along with the increase of our sales revenue. PT.TIMAH Tbk www.timah.com 13
CAPITAL EXPENDITURE Capex In billion IDR 900 800 700 600 500 400 300 200 100-535 129 137 46 185 Refined tin production 779 increased 27% 153 138 166 293 38 29 FY 2016 FY 2017 MAJOR EXPANSION PROJECTS FY 2017 Exploration & Production: Major expansion for open the new area onshore mining in Bangka and Belitung, and regular exploration activities Construction in progress: Construction in progress related to development of production capacity, recondition and replacement machinery including in fuming development Building & office Machinery Exploration & production Equipment CIP PT.TIMAH Tbk www.timah.com 14
DEBT PROFILE AND COST OF FUND Debt Profile (In billion IDR) Cost of fund analysis 12.00% Issued Obligation and Sukuk with lower interest rate 1500 10.00% 8.00% 6.60% 8.18% 9.49% 9.79% 9.41% 8.47% 6.00% 1355 2334 2115 1733 2192 4.00% 2.00% 2.38% 2.70% 2.35% 2.20% 2.00% 2.34% 264 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 Short term loan Long term loan 0.00% 2012 2013 2014 2015 2016 2017 Average IDR Rate Average USD Rate Improving in cash for debt service and lower cost of debt with issued IDR bonds and sukuk ijarah which is long term period with maturity payment on September 2020 and 2022. These bonds and sukuk ijarah were rated A+ by Pefindo PT.TIMAH Tbk www.timah.com 15
Operational Performance
OPERATION PERFORMANCE IN FY 2017 Tin ore production 31,178mt Refined tin production 30,249mt Refined tin sales 29,914mt Average selling price $20,429/t STRONGER FACING CHALLENGES Striving to become a more effective company, TINS has taken advantage from the tin commodity price hike by effectively increasing volume of tin ore production PT.TIMAH Tbk www.timah.com 17
TIN INDUSTRIES OVERVIEW PT TIMAH Tbk www.timah.com 18
OPERATION PERFORMANCE Tin ore production In metric tonnes 40,000 30,000 20,000 10,000 29,776 26,204 32,319 26,361 31,178 24,121 Refined tin production In metric tonnes 29% 27% 40,000 30,000 20,000 10,000 29,512 27,550 27,431 23,718 23,756 30,249 - FY2012 FY2013 FY2014 FY2015 FY2016 FY 2017 - FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 40,000 30,000 20,000 10,000 Refined tin sales In metric tonnes 34,934 23,237 30,087 29,914 26,907 26,677 Average selling price In USD 12% 11% 30,000 25,000 20,000 15,000 10,000 26,714 21,505 21,686 20,429 18,408 16,186-5,000 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 PT.TIMAH Tbk www.timah.com 19
QUARTERLY OPERATION SUMMARY Tin ore production In metric tonnes 8,500 8,000 7,500 7,000 6,500 7,675 8,403 7,776 7,324 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Refined tin production In metric tonnes 8,500 8,000 7,500 7,000 6,500 6,000 6,963 7,942 7,932 7,412 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Refined tin sales In metric tonnes 8,500 8,000 7,500 7,000 6,500 6,000 6,963 7,441 7,184 8,326 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Average selling price $/tonnes 20,600 20,500 20,400 20,300 20,200 20,100 20,000 20,428 20,432 20,557 20,565 Q1 2017 Q2 2017 Q3 2017 Q4 2017 PT.TIMAH Tbk www.timah.com 20
OPERATION OVERVIEW Reserves 335,909 377,594 Province Total IUP Total area (Ha) Note 264,806 276,978 Bangka, Babel 20 81.824 Tin ingot Bangka Barat, Babel 45 93.954 Tin ingot 71,103 100,616 Bangka Selatan, Babel 18 38.265 Tin ingot FY2016 Onshore Offshore FY2017 Bangka Tengah, Babel 8 26.884 Tin ingot Belitung, Babel 9 13.262 Tin ingot Resources 737,546 490,660 796,343 472,306 Belitung Timur, Babel 11 61.278 Tin ingot Bangka Belitung, Lintas Kabupaten 10 112.827 Tin ingot & iron ore Karimun, Kepri 4 18.875 Tin ingot Riau 2 6.540 Tin ingot 246,886 324,037 Riau dan Kepri, Lintas Kabupaten 1 19.594 Tin ingot TOTAL 128 473.303 FY2016 FY2017 Onshore Offshore PT.TIMAH Tbk www.timah.com 21
Strategy Execution in 2017
STRATEGY EXECUTION IN 2017 TIN RESERVES OPERATIONAL FINANCE HUMAN RESOURCES BUSINESS D EVELOPMENT Signing of joint Development of Issued Bonds and Training, Fuming and Ausmelt venture agreement production capacity Sukuk amounting to certification, development with Topwide Ventures in Nigeria Re-evaluted of tin resources and reserves in onshore and offshore Established 2 more units of inland mining Exploitation of primary reserves in Bangka Belitung Rp.1.500 billion managerial and leadership reached 93% of the target as of October 2017 Bore Hole Mining Signed a strategic partnership with Yunan Tin Group PT.TIMAH Tbk www.timah.com 23
Strategy in 2018
STRATEGY IN 2018 1 Increasing tin ore recovery 2 Re-engineering technology and enlargement productivity 3 Established of new mining area 4 Cost efficiency 5 Maintaining good relationship between stakeholders and customers PT.TIMAH Tbk www.timah.com 25
Thank You PT.TIMAH Tbk www.timah.com 26