banpu q2 2013 (final) 14 aug (presentation)...2q13: a$70/t benefiting from an increase in own coal...
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2Q13 results 2Q13 results
investor and analyst update
14th August 2013
DISCLAIMER
The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty ismade as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation has been prepared on the basis of anumber of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Banpu Public CompanyLimited. Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell shares in any jurisdiction.
2
Financial summary
Power business
Coal marketing
Coal operations
Mid-year strategic review
5
4
3
2
1
3
Banpu’s regional coal-based energy strategy
1980s 1990s 2000s 2010s
Thailand
1 Mtpa
Thailand
4 Mtpa
Thailand
20 Mtpa
Indonesia
50-60 Mtpa ?
ILLUSTRATIVE ONLY*
Coal supplyMining and preparation, logistics, infrastructure, marketing, trading
Coal conversionChemicals, oil, gas…
Thailand ThailandIndonesia
ThailandIndonesiaChina
IndonesiaChina - Mongolia
Australia
0.3 GW1.5 GW
2 GW + ?
Thailand ThailandVietnam
Thailand - Laos [?]
[?]
Coal-fired powerIntegrated mine-mouth lignite fired power, imported coal-fired power
* Coal supply figures are indicative of max output (100% basis for ITM; the rest are equity basis) during period; power capacities are indicative of maximum equity power capacity during period
Include
200
150
300
COMMENTS
Thermal coal is still highly competitive for power
● Coal remains the most competitive fuel in Asia
● Unlikely to see significantly cheaper gas in short term
● US shale gas is not competitive on delivered basis in Asia as LNG
● Shale gas development in
LEVELIZED COST OF ELECTRICITY (LCOE) IN ASIA BY ENERGY TYPE
US$/MWh
Asia
$110/tFOB
Asia (Include carbon cost)
OffshoreSolar thermal
Solar PV
Include Carbon cost
50
100
0
SolarWindNuclearCoal
5
● Shale gas development in Asia is still at early stage
● Renewables (especially onshore wind) getting more competitive but cannot compete as baseload energy source
● Emissions regulation and technology (for all fuels including coal) could change the dynamics but coal still likely to be competitive
Source : IEA report (April 2013) , AWR Lloyd analysis
* Assume FOB coal price between U$70-110/t ** LNG price in Asian market (U$14-16/mmbtu) is more expensive than that of USA (U$4-8/mmbtu)
$110/t
$70/t
Asia ($14-16 /mmbtu)
Cheap gas(US case $4-8 /mmbtu)
Exclude carbon cost
$70/t
GAS/LNG
Onshore
COMMENTS
Coal remains backbone of global power generation
● Even with conservative assumptions(1), IEA and others forecast coal to remain single biggest source of power generation globally over next 20 years
● Growing demand in short to medium term mainly from Asia
COAL AS % OF GLOBAL POWER DEMAND (CONSERVATIVE ESTIMATE)
423
557
657659
1,174
6,943
9,710
228
1,539 Nuclear
Hydro
Oil
8,482
1,288
Other renewables
286
Unit: Million tonnes coal equivalent (Mtce)*
6
Asia
● Coal demand in the longer term will likely be impacted by environmental regulation and new technology (e.g. coal-related technologies as well as renewables)
● IEA forecasts over half of all gas supply growth to come from unconventional gas, however significant uncertainties remain about the technical, economic and environmental feasibility of this supply
Note: IEA forecasts assume over half global gas supply growth from unconventional sources. (1) IEA’s central case assumption assumes on-going of existing energy related policies while recently announced policies are implemented in a cautious manner. Source: IEA’s World Energy Outlook 2012
1,581
1,8382,191
3,227
1,032
395
2030
Coal3,921
228
2020
Oil311
2010
3,829
Gas
(46%)(45%) (40%)
+2%CAGR
0%CAGR
* Converted from Mtoe to Mtce at 0.7 Mtoe/Mtce
2010 20302020
Coal demand growth(1) by region to 2030(IEA)
1,686
20302010
1,2681,778
2020
2010 2030
608671710
2020
OECD America
India
ChinaEU & Eurasia
Japan
Non-OECD Asia
20302020
357451
2010
501
-1%CAGR
-1%CAGR
-1%CAGR
-2%CAGR
+3%CAGR +1%
CAGR
-2%CAGR
-1%CAGR
89 76 70
Unit: Million tonnes coal equivalent (Mtce)*
429
2030
535
20202010
288
2020 20302010
118 297
20302020
220
2010
Source: IEA’s World Energy Outlook 2012
20202010 2030
20302010 2020
Latin America
Africa & M.East
India Non-OECD Asia
203020202010
Others
OECD Asia Oceania
139 146 143
90 112 119
9 19 16
14 23 27
Coal
7
+6%CAGR
+3%CAGR
+1%CAGR
+1%CAGR
+5%CAGR
+2%CAGR
+4%CAGR
+2%CAGR
+2%CAGR
+1%CAGR
+8%CAGR
-2%CAGR
Other types of fuel
* Converted from Mtoe to Mtce at 0.7 Mtoe/Mtce (c.7,000 kcal/kg)
(1) The figures shown in this slide represent coal demand from power sector only and are lower than actual tonnage
Long term coal price fundamentals ?
HISTORICAL MARGINAL COST CURVE AND NET PRICE RELATIONSHIP AND DEMAND OUTLOOK
120
140
160
180
200
90th percentile cost
US$/t200 2020
DEMAND2030
DEMAND
180
160
140
120
US$/t
?
2013DEMAND
8
0
20
40
60
80
100
90th percentile cost (seaborne FOB)
Spot coal price (Newcastle)
Cumulative supply (Mt)
0 200 400 600 800 1,000 1,200 1,900
120
100
80
60
40
20
0
?
Source: AWR Lloyd analysis, equity research reports, Wood Mackenzie (June 2013)
Banpu: overview of current strategic initiatives
Hebi (40%)
Gaohe (45%)
BLCP (50%)
Luannan (100%)
Zhengding (100%)
Zouping (70%)
Hongsa (40%)(COD 2015)
THAILAND
CHINA
Hunnu (100%)
MONGOLIA
LAOS
• Keeping overheads low
CORPORATE
• Target to complete 75% construction for Hongsa project in 2013
• Studying new power investment opportunities
POWER
• Gaohe: 5Mt production target
• Hebi: maintain 1.2Mt output
• Hunnu:
� Screening and product testing stage
� Studying potential of coal chemicals market
CHINA/MONGOLIA COAL
9
Kitadin (65%)
Indominco (65%)
BLCP (50%)
Bharinto (64%)
Trubaindo (65%)
Jorong (65%)
AUSTRALIA
Centennial (100%)*
Coal mine Coal mine project Coal-fired power Coal-fired power projectHeadquarters
INDONESIA
Kitadin-TM (65%)
• Keeping overheads low
• Pushing debt down to intermediary and subsidiary levels
• HR development and training programmes
• Strengthening senior management team
• Targeting 10% reduction in overall production costs
• Lowering S/R at Indominco and Trubaindo
• Lowering administrative costs
• Better utilisation of infrastructure
INDONESIA COAL
• Reducing production costs further by 5-7% YoY
• Installed CM units and longwallequipment at Mandalong and Springvale
• Optimising infrastructure and logistics efficiencies
• Increasing export and export-parity sales contracts
AUSTRALIA COAL
2013 TARGETS MID-YEAR REVIEW FOCUS FOR 2H13
INDONESIA
Cost reduction• Plan to lower costs further through improved productivity (i.e. IPCC, coal recovery improvement at Bharinto, testing substitute products for explosive and hauling fuel)
• IPCC expected to start around 4Q13
• 10% YoY reduction in overall production costs
• Reduced by 11% HoH• Lower S/R at Indominco and Trubaindo by 7% HoH and 19% H0H respectively
• Installation of IPCC equipment at mine site
Operational improvement • On track to meet the full year target• Road hauling improvement• Reduce fuel consumption on tug boats and renegotiate barging
• Secure tonnage and price LT of off-spec through blending
• Optimize infrastructure and
• Achieved 14.4 Mt (50% of 2013 output targets) in 1H13
• Establishment of ITMI
Progress review – coal business
boats and renegotiate barging contract
• Optimize infrastructure and logistic efficiency
• Establishment of ITMI
AUSTRALIA
Cost reduction • Plan to lower costs further through improved productivity• 5-7% YoY cut in production costs • Cut production costs by 2% HoH
Operational improvement• Installation of new generation longwall at Springvale (estimate 30% production increase)
• 3rd bolter-miner at Mandalong
• Installation of CM units and LW equipment at Mandalong and Springvale
• Mandalong: Installed CM units –shorter LW move period
• Springvale: improved conditions and producing to budget
CHIN
AMONGOLIA Project development
• Hunnu: continue studying coal to chemical opportunity
• Hunnu: more sample testing will be performed
• Gaohe: on track to meet 2013target
• Hunnu: screening and product testing stage as well as studying potential of coal chemicals market
• Gaohe: 5Mt production
• Hunnu: trial shipments of TsantUul coal
• Gaohe: 54% (2.7 Mt) of 2013 target• Hebi: 50% of 2013 output targets
10
2013 TARGETS MID-YEAR REVIEW FOCUS FOR 2H13
CORPO-
RATE
Cost reduction
• Keep overheads low
• Push debt down to intermediary and subsidiary levels
• $50M annualised admin costs (ex. personnel and depreciation) indicates 30% reduction YoY
• Building up creditability of subsidiaries with banks
FIN
ANCIA
L M
ANGEMENT
Share management • BOD agreed to reduce registered paid-up capital
• 10 to 1 share spilt• Share repurchase programme (5% of total paid-up capital)
• Completed the programme on 16 July 2013 (at avg cost of Bt292/sh)
Debt service
Progress review – corporate and powerFIN
ANCIA
L M
ANGEMENT
• Minimizing risks from higher financing cost
• Bond issuance to better align currency mismatch
• Longer debt redemption profile• Fixed interest rates
• Enter Cross Currency Swap (CCS)• Speeding up funding secured with banks
Derivatives
• Managing risks from mark-to-market causing fluctuation of commodity prices as well as currency and interest rate markets
• Actively monitored and managed derivative activities
• Apply hedge accounting for CCS and Interest Rate Swaps (IRS)
• Communication with subsidiaries on FX management on regular basis
POW
ER
Hongsa progress
• Target 75% completion of overall progress by the end of 2013
• Overall progress approx. 62% (ahead of plan)
• Successfully transported heavyequipment to site in 1Q13
• On track to meet the full year target • Major activities are boiler structure and cooling water construction
11
COMMENTS
Unique synergy potential
● Potential for coal blending synergies amongst Banpu’svarious coal products for the export market
● ITMI established for trading with ability to purchase third-party coal
BANPU SYNERGIES AND COMPETITIVE ADVANTAGES
COAL-POWER
MARKETING SYNERGIES
CHINA COAL-POWER MARKET KNOWLEDGE
SEABOURNE
NORTH ASIAN IMPORT MARKET
ILLUSTRATIVE ONLY
12
● Marketing synergies between ITM and Centennial coal for the export market.
● Knowledge and technical expertise sharing (e.g. underground mining techniques, China power market)
● Vertical-integration coal-power synergies (e.g. Hongsa)
Coal mine Coal mine project Coal-fired power Coal-fired power project
COAL-POWER VERTICAL
INTEGRATION
SEABOURNE COAL-POWER
MARKET KNOWLEDGE
DIVERSITY OF COAL SPECS
HIGH CV COAL
DEBT SERVICE OUTLOOK
Financial strength focus
EBITDA BREAKDOWN
800
1,200U$ M
2012 EBITDA*
2011EBITDA*
150
200
250U$ M
13 * does not reflect the new TFRS accounting standard
0
400
2017E2016E2014E2013E 2015E
THB repayment
RMB repayment USD repayment
AUD repayment
Interest expense
0
50
100
1Q13 2Q134Q12*3Q12*
Export
Australia and Indonesia
Domestic coal
Australia and China
Power
BLCP and China power
PowerDomesticExport
COMMENTS
Share buyback focus: completion
● 5% share buyback scheme (13.56 M shares) completed 16th July
● Leaves 258 M shares in issue
● Total buyback cost : Bt 3.96 billion (c. $125 M)
● Plan for buyback shares to
SHARE BUYBACK PERSPECTIVE
Bt 700
Bt 600
Share buyback commenced 15thMarch 2013
Share buyback completed 16th
July 2013 and notified SET on capital reduction on 18th July 2013
● Plan for buyback shares to be canceled
● Banpu share buyback should be strongly value-creating: management believes current share price fails to attribute fair value to power business and reflects bearish long term coal price outlook
● 10:1 share split announced; EGM is scheduled 9 September 2013
Bt 200
Jul 13
Bt 400
Jan 13Oct 12 Oct 13Apr 13
Bt 300
Bt 500
Jan 12 Jul 12Apr 12
Bt 384
Bt 239
*Leaves 258 M shares in issue14
5% (13.6 M shares*) purchased @ average price Bt 292/share
Financial summary
Power business
Coal marketing
Coal operations
Mid-year strategic review
5
4
3
2
1
15
Australia Coal: operational and financial summary
Charbon
Airly
Neubeck Angus Place
Mandalong Mannering
Myuna
Newstan Extension
PWCS
Newcastle
InglenookNCIG
2013 OUTPUT TARGETS (ROM EQUITY BASIS) KEY UPDATES
Production
● Equity ROM of 4.2Mt (up 43% YoY), with all longwalls in production
● Every mine, except Springvale, increased production over the previous quarter, with Myuna only marginally below
● FY13 forecast of 14.3 Mt (2012: 14.6 Mt ) – after placement of Airly and Mannering on care &
ASP
● Sales were up 34% QoQ, led by an ~18% increase in own coal export sales and a rebound in domestic sales
● 2Q13: A$70/t benefiting from an increase in own coal export sales
● 2013 forecast: remains at ~A$68/t, with the own coal export / legacy domestic
2Q13 YoY QoQ
Sales revenue A$271m ▲ 1% ▲ 34%
EBITDA (pre FX) A$62m ▲39% ▲448%
NPAT (pre FX) A$27m ▲426% ▲239%
Significant Item3
(unrealised FX)A$(52)m
n.a. n.a.
NPAT A$(26)m n.a. ▼34%
Gearing(Net debt to net debt + book value of equity)
35%
CAPEX A$66 ▼23% ▼11%
16
Wollongong
PKCT
Place
Clarence
Springvale
Mannering
Sydney
Open-cut mine
Project
Underground mine
Port
Power station
RoadRail
WESTERN OPERATIONS: 7.1 Mt
NORTHERN OPERATIONS: 7.2 Mt
Airly and Mannering on care & maintenance
FINANCIAL SUMMARY
export / legacy domestic sales mix broadly in balance for the year
Note 1: Airly and Mannering mines placed on “Care & Maintenance” November 2012.
Note 2: NCIG = Newcastle Coal Infrastructure Group; PWCS = Port Waratah Coal Services; PKCT = Port Kembla Coal Terminal.
Note 3: Impact of A$ devaluation in 2Q13 on US$ denominated debt.
COMMENTS
New domestic contract: Origin Energy
● In early July, Banpu and Origin announced agreement for Centennial to supply up to 24.5 Mt of coal, over 8-year period from 1 July 2014, to Eraring Power Station.
● 6 Mt is conditional on the development of Newstan mine extension project.
ORIGIN CONTRACT PROFILE
90%
60%
100%
70%
80%
17
● New Origin contract supplements Centennial's existing legacy contracts.
● Eraring Power Station is a peak demand generator and one of most efficient (and lowest carbon intensity) coal-fired power stations in New South Wales.
● Centennial plans to supply new contract from Northern operations, several of which are located in close proximity to Eraring
Note: Commencement of the coal supply agreement with Centennial Coal was conditional on the successful completion of the acquisitionof Eraring Energy, which has now been confirmed, by Origin Energy.
10%
0%
20%
50%
40%
30%
Dec 13
Dec 15
Dec 22
Dec 14
Dec 17
Dec 20
Dec 16
Dec 21
Dec 19
Dec 18
New contract Legacy contract
NEWSTAN EXTENSIONMANDALONG OTHER OPERATIONS
Australia Coal: Northern Operations quarterly output
0.5
2.0
1.10.8
1.9
0.6
COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg**
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
0.6 0.7 0.6 0.5 0.6 0.8
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg**
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
Completion date extended
COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg**
18
LW MOVE SCHEDULE
6 wks
Mth 1
Mth 2
Mth 3
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e 4Q13e
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
4 wks
6 wks
● Mandalong
� Longwall 14 continues to outperform
� New development units enjoyed record performance
● Myuna – continues to perform consistently, up 33% 1H13 on 1H12
● Ongoing development of Newstan continues, with improved production levels in the two Main West panels, as both panels move away from a major reverse fault area, and largely responsible for a 147% increase QoQ
LW MOVE SCHEDULE
Mth 1
Mth 2
Mth 3
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
Note: *Output figures are ROM output (equity basis)**CV figures are air-dried basis
6 wks
COMMENT
Australia Coal: quarterly equity ROM output
1.5 1.7 2.0 1.9 1.8 1.6 1.7 1.8
1.3
2.51.4 2.0 2.1
1.82.4
1.7
2.8
4.2
3.43.9 3.9
3.4
4.1
3.5
1.01.52.02.53.03.54.04.55.0
Total equity ROM (Mt)
ACTUAL PLANNED (INDICATIVE ONLY)
WESTERN
NORTHERN
19Note: Bar width is indicative of the equity production contributions to CentennialNote 2: Production generally responds to the timing of longwall changeovers (i.e. lower production results during a longwall changeover period)
Normal production Bolt-up/commissioning
1.5 1.7 2.0 1.9 1.8 1.6 1.7 1.8
0.00.51.0
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
WESTERN
6 wks
6wks
LW relocation
3
2013 2014
5 wks
6 wks
DEVELOPMENT FLOAT RECOVERED
Australia Coal: Mandalong – development recovered
● Two new generation Sandvik MB650 continuous miners acquired, with immediate improvement in development rates achieved
� ~30% improvement in development rate, operating with a monorail
� ~20% improvement in development rate, operating without a monorail
NEW DEVELOPMENT MINERS
Sandvik
MB650
20
● Board has approved a third Sandvik MB650 continuous miner, which is due to be delivered and commissioned in 4Q13
● Management investigating further improvement:
� Second monorail to compliment second MB650
● Positive development float and longwall continuity in 3Q13 secured
Company visit photo
0.9 1.0 0.9 0.71.0 0.9
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
OTHER OPERATIONSANGUS PLACE SPRINGVALE
Australia Coal: Western Operations quarterly output
0.3 0.5 0.4 0.3 0.20.60.6 0.6
0.20.5 0.5 0.5
COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg**
COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg**
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg**
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
COMMENT
21
● Angus Place, Charbon and Clarence continued to perform to expectations
● Angus Place
� Production up 6% QoQ, with the mine achieving a monthly record in May
� Development performance remains strong, confirming the transition into Angus Place East is on track.
● Springvale
� Continued to experience challenging mining conditions during 2Q13, however, with improved conditions -July met budget at 0.4 mt
� Installation of new generation longwall for next block completed and commissioning underway
LW MOVE SCHEDULE
Mth 1
Mth 2
Mth 3
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e 4Q13e
LW MOVE SCHEDULE
Mth 1
Mth 2
Mth 3
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e 4Q13e
6 wks
Note: *Output figures are ROM output (equity basis): Angus Place and Springvale are both owned 50% by Centennial
**CV figures are air-dried basis
LONGWALL 415 TO LONGWALL 416
Australia Coal: Springvale – commissioning new longwall
● Difficult mining conditions impacted Longwall 415
� A combination of changed mining conditions and ageing equipment contributed to making roof and floor control more difficult than anticipated
� Now in improved conditions and producing to budget
● Springvale Longwall 416: changes for next block
� New generation longwall comparable to that recently
NEW GENERATION LONGWALL
22
� New generation longwall comparable to that recently installed at Angus Place
� Longwall designed for Springvale conditions
� A similar change at Angus Place achieved ~30% improvement
� Expecting similar improvement at Springvale
� Substantial increase in productivity factored into second half
� Mine design and layout re-engineered to address poor roof areas
� Longwall face width reduced for improved face control
● New longwall being commissioned during August
40
50
60
COMMENTS
Australia Coal: operating costs
• 2Q13 unit costs significantly improved, however, still impacted longer than anticipated by difficult mining conditions at Springvale.
• Target to reduce 2013’s mining costs by 5-7% y-o-y
• Continuing focus to improve FY13 average unit cost over course of
INDICATIVE AVERAGE MINING COSTS*
Open-cut contractor cost
Depreciation
$52
$59A$/t
$58
$51
$47
$55$53
Planned cost reduction 2012 achieved
Plan 5-7% yoyreduction
$51
0
10
20
30
40
23
average unit cost over course of year:
- cost reduction programme
- increasing productivity e.g:
� Introduction of a third new bolter-miner at Mandalong
� Installation of new generation longwall at Springvale
● As a result of placing Mannering on care and maintenance and Newstan yet to reach base tonnage – carbon tax compensation lost
General expenses
Coal handling & preparationOpen-cut contractor cost
Repairs & maintenance
Stores & supplies
Labour
* These figures do not include selling, distribution and royalty costs
Cash overhead
1Q 2Q 3Q 4Q2012
Full year2012
1Q Full year2013E2013
2Q
KEY UPDATES
Indonesia Coal: operational and financial summary
2013 OUTPUT (100% BASIS, SALEABLE COAL)
East Kalimantan
Bunyut Port
Indominco14.8 Mt
Trubanindo7.7 Mt
Bontang Coal Terminal
Captive coal-fired power project
KitadinTandungMayang2.4 Mt
● Indominco : 2Q13 production achieved lower than target due to bad weather affecting production performance
� IPCC trial stage: installation of crushing equipment already 60% completed. Waiting to start for erection of conveying and stacking system. Project expected to commence by 4Q13
● Trubaindo: 2Q13 production achieved higher than target due to adequate raw coal stock and better hauling performance
● Kitadin Td.Mayang : 2Q13 production was slightly lower
24
FINANCIAL SUMMARY
2Q13 YoY QoQ
Sales revenue $527m ▼ 16% ▼ 6%
EBITDA $86m ▼ 48% ▼13%
NPAT $52m ▼ 58% ▼ 28%
Gearing(Net debt to Net debt + book value of equity)
n.a.
CAPEX $29m
Balikpapan
Palangkaraya
Banjarmasin
Central Kalimantan
South Kalimantan
Kitadin -Embalut1.0 Mt
7.7 Mt
Bharinto1.9 Mt
Jorong1.2 Mt
Samarinda
Jorong Port
Operation
Project
Operation
Project
POWER
COAL
● Kitadin Td.Mayang : 2Q13 production was slightly lower than plan due to change of blending plan
JORONG
0.3 0.3 0.3 0.2 0.3 0.3
0.3 0.6 0.6
2.7
1.4 1.8
2.0
1.1 1.11.1
0.70.6
0.4
0.8 0.50.5
4.2 4.44.9
4.34.1 4.3
EMBALUT AND JORONGINDOMINCO - BONTANG TRUBAINDO - BHARINTO
Indonesia Coal: quarterly output
COAL OUTPUT (Mt)*
CV: 6050 - 6500 kcal/kg**
TDMY
WBLOCK
COAL OUTPUT (Mt)*
CV: 6250 - 7200 kcal/kg**
TRUBAINDO
BHARINTO
2.32.6
COAL OUTPUT (Mt)*
CV: 5750 kcal/kg**
CV: 5300 kcal/kg**
EMBALUT
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e2.42.6
25
0.3 0.3 0.3 0.3 0.3 0.3JORONG
15.1 15.1 15.1 15.1 15.1 15.1
2.0 2.0 2.1 2.0 2.0 2.02.1 2.02.5 2.4 2.5 2.7
Note: *Output figures are 100% basis**CV figures are air-dried basis
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
E BLOCK
STRIP RATIOS (bcm/t)
9.3
19.1
11.6
15.2
INDOMINCO
TDMY
13.2 13.9
19.1
9.3
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
19.1
9.3
TRUBAINDO
STRIP RATIOS (bcm/t)
TRUBAINDO
10.9
13.5 13.412.2
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
10.9
BHARINTO
7.6 7.5
STRIP RATIOS (bcm/t)
8.6
10.9
8.6
11.6
JORONG
EMBALUT
8.6
11.8
8.6
11.4
8.6
6.0
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
8.6
11.5
9.2 9.0
7.8
10.9
7.5
EAST
WEST
7.4
COMMENTS
Indonesia Coal: operating costs
● Able to lower operating costs by 11% HoH
● Average strip ratio of 11.5x in 2Q13 down from 13.1x in 2Q12.
● ITM will continue to reduce average strip ratios in 2013 to
2Q13 AVERAGE OPERATING COSTS
50
60
70
80$74 $72
$69
$65
$/t
$67
Dep. & Amortisation
SG&A expenses
Royalty
$70
$63$65
26
average strip ratios in 2013 to cope with lower coal price trend
● Continue to focus on cost reductions including implementation of cost reduction program such as IPCC, renegotiate barging contract, fuel substitute, etc.
● IPCC will lower usage of diesel truck and shovel and use more electricity from owned power plant
0
10
20
30
40
Mining and contractor cost
* Coal transportations, repair and maintenance, salaries and allowance, etc.
Other production costs*
Dep. & Amortisation
1Q 2Q 3Q 4Q Full year 1Q Full year2012 2012 2013 2013E
2Q
GAOHE
● Gaohe has set a production target for 2013 of 5.0Mt
● Gaohe sold washed coal during 2Q’13. This helped with thedeclining coal sales price during a falling coal market during2Q’13.
● The construction team begin on the foundations for therailway spur bridge. Communication with the locals on landissues continued.
CHINA COAL 2013 PRODUCTION TARGETS*
BEIJING
Hebi
Gaohe (45%),Shanxi 5.0 Mt
China Coal: operational and financial summary
OPERATIONAL UPDATES
1.1 0.81.2
1.4 1.30.9
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
27
1
HEBI
● Making improvements to mine safety and planning with continued introduction of hazard mapping and geologic modeling.
● Stable production and sales for Hebi for 2013 of 1.2 Mt. No foreseeable interruption in production that would prevent production and sales targets.
Hebi(40%),Henan1.2 Mt
OperationProjectOperationProject
POWER
COAL
Gaohe
CV: 6500-8000 Kcal/kg**
Hebi
CV: 5300-6800 Kcal/kg**
2Q12 – 2Q13 COAL OUTPUT (Mt ROM)
Summary 3Q12 4Q12 1Q13 2Q13
Sales (Mt) 0.8 1.2 1.2 1.2
ASP (RMB/t) 516 631 681 551
Revenue (US$ M) 67 119 130 109
COGS (RMB/t) 450 382 425 355
EBITDA (US$ M) 12 43 25 23
0.3 0.4 0.3 0.3 0.3 0.3
2Q12 3Q12 4Q12 1Q13 2Q13 3Q13e
Note: *Output figures are ROM output (100% basis)
**CV figures are air-dried basis
TSANT UUL UPDATE
Mongolia Coal: project development
MONGOLIA COAL
● Mongolia Coal: project development ● Location: South Gobi (approximately 200 km from Gants Mod border checkpoint)
● Status: project is under screening and product testing stage (1st phrase)
� Screening is ongoing
� Product testing in China is expected to occur over next several months
28* CV figures are NAR basis, from latest samples
Tsant Uul
CV: 6,000 - 6,500 kcal/kg *
occur over next several months
� Bulk samples will also be sent to Germany for pilot testing
� Summary economics will be analysedbefore deciding on the second stage
� Second stage will be the installation of rotary breaker, screening, and sorting
● Studying potential of coal chemicals market
Financial summary
Power business
Coal marketing
Coal operations
Mid-year strategic review
5
4
3
2
1
29
SUPPLYOVERALL VIEW DEMAND
● We continue to have a sober view through mid 2014
● The share of poorer grade coals in total exports continues
● If US increase to 3.5 to 4.0% GDP growth by mid-2014, it
Banpu view on seaborne thermal coal market
30
view through mid 2014
● New demand continues to soak up supply excess
● Cutbacks gradually capped supply increase
coals in total exports continues to grow, with better coals remaining less in oversupply
● Any sharp change, would encourage an upward spike, as the ability of producers to add near term capacity reduces as market weakness continues.
GDP growth by mid-2014, it would have positive impact and bring positive flow on to other economies especially coastal manufacturing in China.
● Chinese stimulation, if of any substance by end-2013, would compound any upward lift
OTHER DEMAND DRIVERSCHINESE DEMAND ASIA PACIFIC DEMAND
● Despite high summer demand, oversupply to continue through 2013
● Political constraints add uncertainty, albeit no caps yet
● Limited new demand while past investment leads to excess supply
● World still growing; positive GDP
● Thermal coal demand still on course to be up almost 40 Mt YoY
● India has up-paced import with a likelihood to show 30 Mt YoYincrease
Seaborne thermal coal market drivers: 2Q update
31
investment leads to excess supply
OTHER SUPPLY DRIVERSWEATHER INDONESIA AND AUSTRALIA
● All effects negative for coal
● Good hydro. Good renewables
● No major supply disruptions
● USA ceases to be big factor
● Though mines cut back, new supply from past investments came online. Biggest cutbacks are in China
● Supply interruptions in regions like Colombia, South Africa, Russia are only short-term
● Indonesia still feeling a squeeze; many producers are not achieving sales plans
● Depreciation of Australian dollar insulates Australian coal output from weak spot coal prices. South Africa and Columbia similar
Banpu ASPs vs thermal coal benchmark prices
• ASP declined marginally in 2Q, reflecting the general market weakness
• Despite healthy demand, continuing pressure from the well-supplied market impacts ASP
• July JPU benchmark was agreed at
BANPU ASP VS BENCHMARK PRICES
Unit: $/t
COMMENTS
100
120
140
160
180
200
Monthly NEX
Quarterly ITM ASP
Quarterly Centennial ASP
32
•$89.95/t , down from April JPU benchmark of $95.00/t
• ITM concluded sales of 6.9 Mt in 2Q at ASP of $77.5/t, down 4% QoQ
• Centennial concluded sales of 3.8 Mt in 2Q at ASP of A$70/t, up 8% QoQ
• Centennial signed a new long-term domestic contract with Origin Energy adding stability to Banpu outlook
* The Newcastle Export Index (previously known as the Barlow Jonker Index – BJI)
ITM ASP 2Q13 $77.50 (-4% QoQ)
CEY ASP 2Q13 A$70.06 (+8% QoQ)
NEX* August 1, 2013 $77.15
0
20
40
60
80
100
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
900
1,000
> 5,800 kcal/kg
> 5,500 kcal/kg
> 5,000 kcal/kg
CHINA DOMESTIC COAL PRICES
China thermal coal market review
Unit: RMB/t
103
147
ANNUALIZED ACTUAL IMPORT 4Q11 - 4Q12 & 2Q13
CHINA THERMAL COAL IMPORTS/EXPORTS
Unit: Mt Unit: Mt
c.145-155?
143
116
151146
175
148140
Net
33
400
500
600
700
800
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Source: www.sxcoal.com/cn 31 July 2013
93
103
147 5 4
2010 2011 2012 2013E
Import Export
Sources: China Coal Report Jan 2013, Banpu MS&L Estimates
Net import142 Mt
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Import Export
Net importc.141-
151 Mt ?
615
565
485
BANPU GROUP TOTAL GLOBAL COAL SALES* 2013 TARGETCOAL SALES* BREAKDOWN BY DESTINATION 2013e (Mt)
Banpu group coal sales 2013 target
S KOREA
2.8 MtCHINA
10.1 Mt
ITALY
0.9 Mt
2.8
1.8
4.9
7.4 0.7
0.1
2.1
22%
6%
5%
4%3%2%2%
1%1% China
Italy
Thailand
Philippines
Hong Kong
Indonesia
Others
Malaysia
USA
0.5 Mt
USA
34 * Excluding Mongolia coal
Australia Coal
China Coal
Indonesia Coal
JAPAN
6.7 Mt
PHILIPPINES
2.2 Mt
INDONESIA
2.9 Mt
THAILAND
1.8 Mt
INDIA
3.2 Mt
OTHERS
1.2 Mt
HK
0.3 Mt
2.8 Mt10.1 Mt
TAIWAN
3.5 Mt
AUSTRALIA
9.1 Mt
2.01.5
0.70.5
Total: 46.0 Mt*
(Sales from Indonesia are included on 100% basis, sales from Australia and China are included on equity basis )
20%
15%
8%
7%
6%
Australia
Japan
Taiwan
India
S Korea
MALAYSIA
0.8 Mt
31%
2% 3%
Indicative 2013 Banpu coal sales pricing status
AUSTRALIA COAL
Indexed
Domestic: Legacy
Unsold
Fixed Export
INDONESIA COAL
Unsold5%
Indexed11%
1new higher priced domestic contract commenced 1 July 2012, increasing sales certainty and improving domestic (and total sales) ASP
50%
14%
35
TARGET SALES 2013 (equity basis): c.14.2 MtAs at 1 Aug 2013
Domestic: Export parity1
Fixed
Fixed84%
TARGET SALES 2013: c. 29.0 MtAs at 1 Aug 2013
Financial summary
Power business
Coal marketing
Coal operations
Mid-year strategic review
5
4
3
2
1
36
75 63
75
2Q12 1Q13 2Q13
Thailand Power: BLCP in 2Q13USD million
Availability Payment (AP)
Q-Q: 6.1%Y-Y: -1.0%
Q-Q: 38.3%Y-Y: -3.6%
Total revenue
Q-Q: 72.0%
Y-Y: -1.0 %
Q-Q: -6.1%Y-Y: -4.8%
Q-Q: 18.9%Y-Y : 0.4%
FXgain
159 148
157
2Q12 1Q13 2Q13
3029
33
FXgain
2Q12 1Q13 2Q13
37
Energy Payment (EP)
Dispatch (%)
Y-Y: -3.6%
Q-Q: 24.2%Y-Y: -1.9%
EBIT
EBITDA Based on Banpu’s 50% interest
Equity income
2,143
FX loss
76 78 73
2Q12 1Q13 2Q13
57
40 55
2Q12 1Q13 2Q13
73 58
72
2Q12 1Q13 2Q13
98 96 96
2Q12 1Q13 2Q13
27
19
17
-2
26
● Overall progress approx. 62% and ahead of plan
● Major activities of power plant construction: cooling tower construction and boiler structure
● Key achievement in 2Q
� Lifted Generator Stator Unit 1 on 17 April 2013
� Installed Generator Transformer Unit 1 on May 6, 2013
PROJECT PROGRESS UPDATES 2Q13
Thailand Power: Hongsa project in Laos
HONGSA PROJECT
6, 2013
� Lifted Steam Drum Unit 2 on May 16, 2013
� Completed construction of Nam Louk and Nam Ken Dam on June 30, 2013
38 Note: *Banpu’s equity injection
PROJECT NAME
CONSTRUCTION PROGRESS
CAPEX ($m)
CAPEX TIMELINE
2012 2013 2014 2015 2016
HongsaPower 62% 340* 85 168 87
CAPEX TIMELINE
China Power: BIC* in 2Q13 (100% basis)
LuannanHebei Province
Power 100MW;
Steam 128tph
(Banpu 100% )
Zhengding
Sales**
(USD m)
EBITDA
(USD m)
Utilization
(hours)
Power tariff
(RMB/kwh)
Coal price***
(RMB/t)
0.44 5181,20510.1
16.2
3.4
BIC* 2Q12 1Q13 2Q13
4.1
1,914
5301,361
0.44 0.44
684
2,021
10.3
1.5
2Q13 sales slightly reduced compares with the same period of last year. Down trend coal price helpes double EBITDA compared with the same period of last year.
2Q13 sales slightly
39 Note: *BIC = Banpu Investment China (formerly BPIC), **Unaudited figures, *** Including transportation
ZhengdingHebei Province
Power 48MW;
Steam 180tph
(Banpu 100%)
ZoupingShandong Province
Power 100MW;
Steam 430tph
(Banpu 70%)
1,861
8.92.9
506
21.9
6.3
1,804
6460.437.3
14.8 6.0
2,021
653
0.41
1,874
0.45
844
1,726
5600.40
676
0.42
2,007
9.3
1.8
21.4
26.3
4.4
0.41
Higher utilization hours offsets some impact from lower steam tariff which linked with lower coal. 2Q13 sales slightly increased but EDITDA increased more than 40% compared with the same period of last year.
2Q13 sales slightly reduced compares with the same period of last year. Down trend coal price helps higher EBITDA compared with the same period of last year.
Financial summary
Power business
Coal marketing
Coal operations
Mid-year strategic review
5
4
3
2
1
40
Key external and corporate events
EX
TE
RN
AL
E
VE
NT
S
DIR
EC
TIN
DIR
EC
T
Concern over possibility of US Federal Reserve’s
tightening its loose monetary policy
Cyprus bail-out crisis
Military threatens from North Korea
China is
Fed continues its QE policy to boost
economyBOT cut interest
by 25bp. to 2.5%
China’s cash squeeze crisis
Xstrata & China may
World Bank announced limits lending for coal-fired power plants
Kevin Rudd sworn in as new Australian prime
minister
RBA cuts overnight cash rate target by 25bps to
2.75%
Mongolian president re-elected for 2nd term
41
EX
TE
RN
AL
E
VE
NT
SC
OR
PO
RA
TE
E
VE
NT
S
Aug’13
DIR
EC
T
4Q12 result announcement
5% share buy back program
Bt9/sh dividend payment
Luncheon with analysts and
fund managers
4Q12 Analyst meeting
4Q12 SET Opportunity Day
NDR in Europe and HK
BanpuAGM 2013
BJI lowered to $90/t range (from
$93-96/t in the past month)
SET index down 30 pts over the
fear
of Baht control
China is planning to ban
import of low grade coal
1Q13 Analyst
meeting
1Q13 Result announcement
End of share buy-back
program of 5%
(13.6million shares)
1Q13 SET Opportunity Day
Meeting with group of
retail investors
Xstrata & Japanese utilities
set FY 2013 contract at $95/t
1Q13
China may suspended
proposed ban on low grade coal
2Q13 Result announcement
Jul’132Q13 Sep’ 13
Share split announced
EGM to approve the share split
Banpu group revenue analysis: coal operations
5.8 6.0 7.6 6.5 6.1
6.6 6.68.2 7.1 6.9
2Q12 3Q12 4Q12 1Q13 2Q13
Indonesia Coal (ITM)
SALES (Mt)
AVERAGE SELLING PRICE (US$/t)
NEX*
Domestic
Export
97 90 86 93 86
100% basis
China Coal
SALES (Mt)
AVERAGE SELLING PRICE (US$/t) excl. VAT
0.6 0.5 0.7 0.7 0.7
2Q12 3Q12 4Q12 1Q13 2Q13
NEX*
9790 86
9386
Equity basisDomestic
Export
1.5 2.7 1.7 1.6 2.5
3.3 4.2 3.3 2.9 3.8
2Q12 3Q12 4Q12 1Q13 2Q13
Australia Coal (Centennial)
SALES (Mt)
AVERAGE SELLING PRICE (A$/t)**
NEX*
97 90 8693 86
Equity basisDomestic
Export
42
Note: ITM and Centennial revenues are consolidated in Banpu income statement.Australia Coal – Third party coal sales included.
REVENUE ($M)
622 572 653 563 527
2Q12 3Q12 4Q12 1Q13 2Q13
ASP
90 86 86
95 88 81 80 77
2Q12 3Q12 4Q12 1Q13 2Q13
100% basis
Note: ‘$’ in this presentation denotes US dollar only, otherwise stated
*NEX = Newcastle Export Index (formerly Barlow Jonker Index or BJI) It is relevant but not linked to China Coal’s ASP
**Australian GAAP
Note: Hebi and Gaohe revenues are not consolidated in Banpu income statement.
REVENUE ($M)
123 103 154 161 133
2Q12 3Q12 4Q12 1Q13 2Q13
ASP
94 87101 106
90
2Q12 3Q12 4Q12 1Q13 2Q13
9790 86
9386
100% basisREVENUE (A$M)
269 294 244 202 271
2Q12 3Q12 4Q12 1Q13 2Q13
ASP
8270 74 65 70
2Q12 3Q12 4Q12 1Q13 2Q13
90 86 86
Equity basis
263
201 260
41
58 41
Banpu consolidated sales revenues
USD million+2% Q –Q
Power-29% Q - Q
945
836
Coal Australia+29% Q - Q
852-10% Y –Y
-1% Y - Y
641578 552
2Q12 1Q13 2Q13
43
Coal Indonesia-4 % Q- Q
Power
Coal Australia
Coal Indonesia
Note: Revenue from other is included in Coal.
-1% Y - Y
-14 % Y - Y
AUSTRALIA COAL INDONESIA COAL
Banpu consolidated coal gross margin 2Q13 : 27%
263 260
Indonesia Coal gross margin: 34%
545
630
USD millionUSD million Australia Coal gross margin: 28%
571
44
Note: AUD exchange rate – USD 0.9902/A$ (as of 30 June 2013)
Coal sales Gross margin
2Q12 1Q13 2Q13
11%
28%
2Q12 1Q13 2Q13
36%
44%
201
28%34%
8
44
35
31
31
Banpu consolidated EBITDA and NPAT
Power
USD million
259
148
USD million
Power 0% Q-Q
EBITDA NET PROFIT
175
+18% Q –Q
-32% Y –Y
-11% Y-Y
-32% Q –Q
-69% Y –Y
172
108 8850 38
12
10 6
7 6
50
-22-49
31
19 22
24
1414
-15
2Q12* 1Q13 2Q13 2Q12* 1Q13 2Q13
45
Coal - Indonesia
Power
-76% Y-Y
Power
31
Coal Australia Coal China Coal Indonesia
Coal - Australia
Coal - China
Coal - Indonesia
-51% Y-Y
Coal - Australia
Coal - China
-28% Y-Y
n.m.
+499% Q-Q
* Reflects new TFRS accounting policies
-21% Q-Q
-11% Y-Y
-45% Q-Q
68
21
+9% Q-Q+26% Y-Y
-93% Q-Q-92% Y-Y
-68% Q-Q
FX and derivative
FX & derivative
+13% Y-Y
GEARING RATIOS
Banpu gearing and foreign exchange structure
DEBT FX STRUCTURE
AUD Fixed
THB Float2%
THB Fixed17%
0.74 0.790.99
Net debt / Equity1 (x)
Net market gearing2 (%)
46 Note: 1 Net debt to book value of shareholders' equity2 Net debt to enterprise value (enterprise value = net debt + market capitalization as at 30 June 2013)
USD Float51%
USD Fixed26%
Fixed4%
TOTAL DEBT: $3.34 BillionAs of 31 July 13
42%45% 50%
2.052.52 2.52
2011 2012 2Q13
Net debt / EBITDA(x)
Appendices
47
Banpu’s peer comparatives
76%
18%6%
74%
18% 31%
69%
14%
86%
100%
88%
4%8%
Banpu* Indonesia peer 1
Indonesia peer 2
Indonesia peer 3
Australia peer 1
Australia peer 2
Australia peer 3
EBITDA BY BUSINESS (2012 COMPARISON)
1%
99%
8%
Power OthersCoal - Domestic Coal - Export
48
EBITDA BY GEOGRAPHY (2012 COMPARISON)
4%
17%
50%
29%
100% 100% 100% 100% 100% 100%
Banpu* Indonesia peer 1
Indonesia peer 2
Indonesia peer 3
Australia peer 1
Australia peer 2
Australia peer 3
ThailandIndonesia ChinaAustralia
* Based on Adjusted EBITDA (EBITDA results multiplied by Banpu’s percentage ownership in each business (for example, taking only 65% of ITM’s EBITDA) Note: Numbers are based on AWR Lloyd estimates
Power OthersCoal - Domestic Coal - Export
EV/EBITDA VERSUS NPV APPROACH*
Perspective: the importance of LT assumptions
FREE CASH FLOWS AS A % OF 20 YEAR NPV*
6%
Year ahead =c.6% of NPV
5% pa
Growth scenario**
Years 5-20 Years 1-5ILLUSTRATIVE ONLY
69%
25%
5% pa
Growth scenario
10.8x
49
ILLUSTRATIVE ONLY Source : AWR Lloyd Source : AWR Lloyd
8%
9%
Year ahead =c.8% of NPV
Year ahead =c.9% of NPV
2.5% pa
0% pa
*Assumes 8% real discount rate
**Real terms
*Assumes 8% real discount rate, effective 25% tax, no incremental capex, 20 year cashflow
65%
59%
27%
32%
2.5% pa
10.07.55.0
0% pa
8.8x
7.4x
EV/EBITDAequivalent
INDONESIA COAL: SALEABLE COAL 100% BASIS AUSTRALIA COAL: SALEABLE EQUITY BASIS
Banpu group indicative five-year plan output targets
10
15
20
25
30
35
Bharinto
JorongEmbalut
Trubaindo
* **
Others - West
Springvale (50%)Angus Place (50%)Others - North
10
15
20
25
30
35
Mt Mt
50
MONGOLIA COAL: SALEABLE 100%BASISCHINA COAL: SALEABLE COAL EQUITY BASIS
Disclaimer: These output targets are indicative only and are subject to change.
0
5
2012 2013 2014 2015 2016
Indominco
* Tandung Mayang
Others - NorthNewstan Ext (100%)
Mandalong (100%)
0
5
10
2012 2013 2014 2015 2016
Gaohe (45%)Hebi (40%)
0
5
10
2012 2013 2014 2015 2016
0
5
2012 2013 2014 2015 2016
MtMt
Indonesia Coal gross margin 2Q13 : 34%
545
266
USD million
274
308
209
630
570
1Q13 2Q13
51
2Q12 1Q13 2Q13
34%
36%
44%
2Q12 1Q13 2Q13
Indonesia CoalIndominco
35%
38%
32%
2Q12 1Q13 2Q13
36%
45%
35%
163
Trubaindo
2Q12 1Q13 2Q13
53% 52%
Jorong
46% 19%2%
2Q12 1Q13 2Q13
52%22 48%
24% 38%
Kitadin
2Q12 1Q13 2Q13
TandungMayang
44
43% 33%
Bharinto
4467%
209
172
35 15 197
41
22
41 49
44% 39%
Banpu group EBITDA breakdown
12 43 46 43
-4
0
-3 -3
76 72 51 46
75 84 58 72
148 121 99 88
50%
Power & New energy
45%
Gaohe
BLCP
& holding companies
65%
Indominco
AACI OVERHEAD
Unit: $M
100%
8638 11
62-2 -2 -2 -2
Unit: AUD Mil
All figures are 100% basis except for Centennial
239 196 148 175
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13 3Q12 4Q12 1Q13 2Q13 3Q12 4Q12 1Q13 2Q13 3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 4Q13 2Q13
3Q12 4Q12 1Q13 2Q13
52
2 1 2
-1
37 28 19 16
0 3 9 10
37 23 18 19
Jorong
-2 -10 -4 -210 2 2 0
40%
40%
70%
Note: all ownership 100% unless otherwise shown.*BIC = Banpu Investment China (formerly BPIC)
Hebi
HONGSA
BIC*
Zouping
4 7 7 6
Zhengding
3 5 6 3
Luannan
2 4 4 3
Trubaindo
Kitadin
Consolidated NOT consolidated
9 14 17 14
for Centennial which is equity basis
Bharinto
3Q12 4Q12 4Q13 2Q133Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13
3Q12 4Q12 1Q13 2Q13 3Q12 4Q12 1Q13 2Q13 3Q12 4Q12 1Q13 2Q13
Banpu group net debt breakdown
& holding companies
2,205 2,381 2,484 2,672
3Q12 4Q12 1Q13 2Q13
AUSTRALIA COAL INDONESIA COAL CHINA COAL MONGOLIA COAL100% 65% 45% 40% 100%
Unit: $M
53 Note: all ownership 100% unless otherwise shown.*BIC = Banpu Investment China (formerly BPIC)
809 970 1201 1286
244 232 318 224
2Q133Q12 4Q12 1Q13
THAILAND POWER LAOS POWER CHINA POWER
Gaohe Hebi
HONGSABLCP BIC*Consolidated
NOT consolidated
50% 40% 100%
Net debt
Net cash
455 423 548 631
-631-461 -496 -400
-25 -47 -40 -24 -2 -4 -5 -5
377 307574 557 -5 -5 -4
1
Unit: AUD Mil
2Q133Q12 4Q12 1Q13 2Q133Q12 4Q12 1Q13 2Q133Q12 4Q12 1Q13 2Q133Q12 4Q12 1Q13
2Q133Q12 4Q12 1Q13 2Q133Q12 4Q12 1Q13 2Q133Q12 4Q12 1Q13
Banpu consolidated : operating profit
Units: USD million
Sales revenues – Power (BIC)
Cost of sales
Sales revenues – Coal
Total sales revenues*
YoY%
-10%
-10%
0%57
(589)
1Q13
836
771
41
(583)
2Q12
945
894
QoQ%
2%
4%
-29%41
(581)
2Q13
852
805
54
Gross profit*
GPM
Gross profit - Coal
Gross profit – Power (BIC)
GPM – Power (BIC)
GPM - Coal
-25%
-27%
86%
246
29%
225
16
29%
29%
362
38%
351
6
14%
39%
Note: * Including other business
10%
14%
-33%
271
32%
256
11
27%
32%
Units: USD million
Gross profit
GPM
SG&A
Royalty
Income from associates
-25%
YoY%
246
29%
(112)
(80)
1Q13
27
362
38%
(110)
(96)
2Q12
42
Banpu consolidated: operating profit
271
32%
(99)
(82)
2Q13
32
10%
QoQ%
Other income
EBIT
EBITDA
EBIT - Coal
EBIT - Power
Income from associates
EBITDA - Coal
EBITDA - Power
-41%
-33%
-47%
-6%
-36%
11%
Other expenses - Operations
24
98
148
69
29
27
117
31
(8)
10
208
259
175
33
42
224
35
-
55
8
123
175
92
31
32
144
31
(8)
25%
18%
33%
7%
23%
0%
Banpu consolidated : net profit
Units: USD million
EBIT
Interest expenses
Financial expenses
Minorities
Income tax (core business)
-41%
YoY%
98
1Q13
(27)
(2)
(26)
(28)
208
2Q12
(27)
(3)
(41)
(61)
123
2Q13
(29)
(3)
(19)
(23)
25%
QoQ%
56 Note: * Income from non-core assets and other non-operating expenses
Minorities
Non-recurring items*
Income tax (non - core business)
Net profit before FX
Net profit before extra items
FX translations
Net Profit
EPS (USD/share)
-13%
-69%
-35%
Deferred tax income (expenses)
(26)
30
(11)
56
14
(25)
31
0.11
23
(41)
(22)
(8)
41
(27)
68
0.25
77
(6)
(19)
(18)
(2)
35
50
(14)
21
0.08
6
-37%
-32%
247%
Units: USD million (TFRS)
Cost of sales
Gross profit
GPM
Royalty
SG&A
Sales revenue
Sales volume (mil. tonnes)
2Q12
(188.66)
74.83
28%
(18.43)
(48.56)
3.274
263.49
1Q13
(178.74)
21.82
11%
(11.62)
(45.57)
2.948
200.56
Centennial : Income Statement
YoY%
-4%
-25%
-4%
15%
-2%
2Q13
(186.97)
72.21
28%
(17.63)
(36.69)
3.767
259.17
QoQ%
231%
-19%
52%
28%
29%
Royalty
EBIT
Other income
Interest expenses
Financial expenses
Gain (loss) on exchange rate
Net profit
Gain (loss) on derivative
(18.43)
10.38
(6.00)
(1.20)
3.72
7.31
7.85
Other expenses
(11.62)
(33.85)
4.06
(6.58)
(1.44)
4.55
(28.39)
8.94
(2.56)
57
-4%
41%
42%
n.m.
n.m.
2.57
-
(17.63)
14.61
3.65
(6.77)
(1.36)
(51.36)
(36.07)
8.81
(6.94)
52%
n.m.
-10%
n.m.
171%
BANPU GROUP TOTAL GLOBAL COAL SALES 1H13COAL SALES BREAKDOWN BY DESTINATION 1H13 (Mt)
Banpu group coal sales 1H13
S KOREA
1.5 MtCHINA
5.2 Mt
ITALY
0.4 Mt
1.4
3.70.30.11.2
23%
6%
5%
5%3%2%
1%1%1%China
OthersItaly
Philippines
Hong Kong
India
Thailand
0.82.4
Malaysia
USA
0.3 Mt
USA
58 * Excluding Mongolia coal
Australia Coal
China Coal
Indonesia Coal
JAPAN
3.2 Mt
PHILIPPINES
1.0 Mt
INDONESIA
1.5 Mt
THAILAND
1.0 Mt
INDIA
1.4 Mt
OTHERS
0.5 Mt
HK
0.2 Mt
1.5 Mt5.2 Mt
TAIWAN
1.5 Mt
AUSTRALIA
4.1 Mt
1.7
Total: 22.3 Mt (Sales from Indonesia are included on 100% basis,
sales from Australia and China are included on equity basis )
18%
14%
7%
7%
7%
Japan
Australia
Korea
Indonesia
Taiwan
2.4
1.00.5
MALAYSIA
0.3 Mt
2012 – 2015 MAJOR DISCRETIONARY CAPEX PLAN*
Capex outlook
POWER
MONGOLIA
Unit: $ Mn
• Includes Hongsa equity injection up to 2016
• Tsant Uul development• Altai Nuurs exploration
1,248
200
378
MONGOLIA
AUSTRALIA
INDONESIA
• Altai Nuurs exploration
• Capex is limited to ‘essential’ or ‘committed’ for time being
• IPCC, BoCT expansion, Bunyut Expansion, etc
245
425
200
* Capex figures exclude maintenance capex59 DISCLAIMER: ALL CAPEX FIGURES ARE INDICATIVE ONLY AND ARE SUBJECT TO CHANGE
New domestic business at long-term export parity pricing, providing a natural hedge against A$/US$ exchange rate volatility
Secured 24 million tonne, 8-year contract with Origin Energy commencing July 2014.
Balance between domestic and export business provides product and revenue diversification
Targeting cost reductions of 5-7%.
Supplier cost reductions
Recruitment freeze and continue to review support roles
Reduction in contractors / employees by c.10%.
Bonus potential reviewed and tied to productivity improvements
REVENUE OPTIMISATION
Australia Coal: optimisation programme continues
COST MANAGEMENT
Optimisation project underway - coal flows from mine to customers (coal qualities matched to customer needs)
Focus on reducing distribution costs
Investment in Western infrastructure underway at Lidsdale Siding
Investment in own rail fleet
Access to ports at Port Kembla and NCIG provide cargo assembly flexibility
improvements
Two mines placed on care and maintenance.
Focus on maximising longwall output and improve development rates:
Two new next generation CM units at Mandalong, with a third planned for 4Q13
New generation longwall at Springvale in 3Q13
Focus on improving low-cost operation by increasing volumes through
4thmining unit at Clarence (1Q13)
Additional roof-bolter at Myuna (1Q13)
Capex limited to “essential” or “committed”60 On-going Completed
LONGWALL EXTRACTION OUTPERFORMANCE
Mandalong: extended longwall changever
TYPICAL PLAIN VIEW OF A SERIES OF LONGWALL PANELS
Direction of mining
Direction of mining
1
61
Completed LW ahead of
plan
Adjacent roadway development for the new longwallpanel occurs simultaneously with longwall extraction
Roadway development on plan, but lagged longwalloutperformance
1
2
2
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