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INVESTOR & ANALYST UPDATE
14th August 2012
2Q12 results and comments
1
DISCLAIMER
The views expressed here contain information derived from publicly available sources that have not been independently verified NoThe 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 Public Company Limited. 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
1. Focus: weathering the storm…
2. Coal operations
3. Coal marketing
4. Power business
5. Financial summary
Appendices
3
1. Focus: weathering the storm…
4
Banpu has been through difficult times before…
LONG TERM PERSPECTIVE STRATEGIC PERSPECTIVE
1980s
• Banpu has three decades of experience and has faced difficult macroeconomic conditions many times before
• Coal Thailand
SET li ti
BANPU EXTERNAL
1 Mt
COAL SALES
1990s
conditions many times before
• Despite many short term setbacks, over the long term
• SET listing • Low coal prices
• Low coal prices• Mae Moh contract
I d i
1 Mt
1990s Banpu has delivered strong shareholder returns
• Banpu has focused on growth
• Asian economic crisis !
• Indonesia
• Power business
• Indocoal acquisition
4 Mt
2000s• Banpu has focused on growth
– but also on sustainability
• Emphasis on pro-active risk
Indocoal acquisition
• Non-core divestment
• China coal
• Coal price growth
• Lehman crisis !20 Mt
2010s
Emphasis on pro active risk management, contingency planning, strategic flexibility
• Australia coal
• Mongolia coal• European debt
crisis !44 Mt
5
44 Mt
Checklist for weathering the current ‘storm’
FUNDAMENTALS ACTION PLAN 2012-13
Domestic coal sales less impacted by benchmark prices Cut costs and reduce strip
ratios in Indonesia 2012-13
Export sales mainly to strong credit large corporate buyers
Productivity improvements in Indonesia and Australia
Power earnings a hedge against lower coal prices
Reduce and delay capexplans: target 30% reduction 2011-15
Geographic diversity of assets mitigates regulatory risks and gives strategic flexibility
Limited impact to medium term output targets
Financial discipline and risk management systems
Maintain strong EBITDA to net debt ratio and dividend yield
6
Structure of adjusted operating earnings*
Bt 13.8 bn*
Bt 9.3 bnExport coalAustralia and Indonesia
• Coal exports mainly to large creditworthy customers in NE Asia
• Diverse high CV coal portfolio with integrated logistics and blending: resilient to weak coal prices
Bt 1.9 bnDomestic coal • Mainly long term contracts with large power companies
Bt 2.5 bn
Australia, Indonesia, China
PowerBLCP and China power
power companies
• Note: Hongsa earnings will grow as BLCP earnings decline
H1 2012
7* Figures shown above are based on EBITDA results multiplied by Banpu’s percentage ownership in each business (for example, taking only 65% of ITM’s EBITDA)
Banpu: high quality coal portfolio*
Calorific value (adb, Kcal/kg)
7 1007 0007 200 7 000 7 250
Indonesia peer 1
Indonesia peer 2
Indonesia peer 3
Indonesia peer 4
Indonesia peer 5
Indonesia peer 6
Indonesia peer 7
Australia peer 1
Australia peer 2
Avg Chinese peers
7,1007,0007,200
5,700 5,4175,900
5,230
7,0006,400
7,2506,850
5,0005,4005,300 5,200
4,3095,500 5,215 5,300 5,400
6,950 6,7006,500
5,850
ITM Centennial
Ash (adb, %)
peer 1 peer 2 peer 3 peer 4 peer 5 peer 6 peer 7 peer 1 peer 2 peers
27.0
18 0 19 0
Indonesia peer 1
Indonesia peer 2
Indonesia peer 3
Indonesia peer 4
Indonesia peer 5
Indonesia peer 6
Indonesia peer 7
Australia peer 1
Australia peer 2
Avg Chinese peers
ITM Centennial
6.012.0
2.0 2.5 5.1
18.0
8.0 9.0 10.0
19.0
4.09.0
2.5 1.0 2.0 4.5 4.0 5.0 4.0 6.5 8.510.09.0
Sulphur (adb, %)
2.00.6
1.40.1 0.1
1.0
2.5
0.7 1.0 0.5 0.7 1.0
* Peer figures are from company sources
Indonesia peer 1
Indonesia peer 2
Indonesia peer 3
Indonesia peer 4
Indonesia peer 5
Indonesia peer 6
Indonesia peer 7
Australia peer 1
Australia peer 2
Avg Chinese peers
ITM Centennial
0.1 0.10.2 0.3 0.2 0.1 0.1 0.7 0.4 0.5 0.3 0.5 0.5 0.5
8
Banpu’s main customers
C t
ITM: TOP 5 CUSTOMERS
Customer
Country China Indonesia Taiwan Italy Japan
Credit rating BB+ (Fitch) na BBB+ (S&P) Baa1 (Moody’s) / A- (Fitch) / BBB+ (S&P) A3 (Moody’s)/ A (S&P)
Business relationship (years) 6 6 7 6 14
Current contract duration Evergreen Evergreen Evergreen End Dec’ 12 End Dec’14
Customer Pen
CENTENNIAL: TOP 5 CUSTOMERS
Customer Pen Country Australia Australia Taiwan Taiwan Japan
Credit rating AA- (Fitch) / AA- (S&P) na A+ (S&P) na A1 (Moody’s) / A+ (S&P)
Business relationship (years) +20 +20 +10 3 3p (y )
Current contract duration End Jun 22 End Jun 22 End Dec 19 End Jan 13 End Mar 13
9
Focus: reducing costs in Indonesia in 2012
$/t
INDICATIVE FOB CASH PRODUCTION COSTS PER TONNE
Target reduction
50.0
60.0
Logistics and overheads
Reduce management overheads
-$3/t
40.0Other pit-operation activities
W t i i t
Reduce management overheads
Processing, haulage and port
20.0
30.0Overburden removal costs
Cut Indominco SR:13.2 to 12.9 (and potentially to 12 6)
Waste mining cost
10.0
(and potentially to 12.6)
Cut Trubaindo SR: 13.5 to 12.5
0.02012 original plan 2012 revised plan
ROM OUTPUT: 27.0 Mt 27.0 Mt
10ILLUSTRATIVE AND INDICATIVE ONLY
Focus: Centennial outlook
KEY STRENGTHS DOMESTIC CONTRACT OUTLOOK
• Full production rates expected at three main longwall operations in 2H12
• Increased productivity should enable 20
MtHigh percentage of domestic contracts• Increased productivity should enable
10-15% unit operating cost reductions in 2H12 compared to 2Q12
14
16
18domestic contracts next two years
• Indexed-linked domestic contracts with expiring contracts renewable at long-term export parity pricing 8
10
12
• Export business with long standing customers to premium markets
• Flexibility to build both domestic and 0
2
4
6
Flexibility to build both domestic and export business in accordance with market opportunities
011A 12F 13F 14F 15F
Domestic Domestic potential Export
11
Focus: Hongsa
PROJECT SUMMARY PROJECT VALUE DEVELOPMENT CURVE
• Project progress at end 2Q is slightly ahead of schedule
• COD f fi t it t t d f40%
60%
80%
100%
Main road completion
COD Unit 1
COD Unit 3
COD Unit 2
RU
CTI
ON
PLA
N
NP
V
90%
• COD of first unit targeted for June 2015
• Hongsa project is targeted to % Project NPV*
0%
20%
Dec
10
Apr
11A
ug11
Dec
11A
pr12
Aug
12D
ec12
Apr
13A
ug13
Dec
13A
pr14
Aug
14
Dec
14A
pr15
Aug
15D
ec15
CO
NS
TR
40-60%
Hongsa project is targeted to contribute around Bt 3 – 6 bnper annum to Banpu EBITDA (from 40% shares of holding)
% Project NPV
100%
from 2016
• Growing contribution from Hongsa will gradually offset 10 ‐ 20%
40 ‐ 60%
20 ‐ 30%30 ‐ 40%
Hongsa will gradually offset the decline in earnings from BLCP over the long term
Commercial Operation
CommissioningFinancingSecured
Site Identification & Studies
PFS completed
FS completed Construction
*Source: AWR Lloyd
12
Source: AWR Lloyd
Capex plan changes 2011-2015
1800
$Millionc.30% reduction1,748
3781600
1800
POWER
1,748
4001200
1400
MONGOLIA
1,248
200
378
800
1000 Maintain Hongsa equity injection and China power expansions as planned
Deferred development of Tsant Uul and
625
425400
600AUSTRALIA Altai Nuur; focus on exploration
Capex adjustment – mainly postponement to ramp-up of Newstan
345245
0
200 INDONESIA
to ramp up of Newstan
Postponement of some developments BoCT urgent improvement only
13
0Original plan Revised plan
DISCLAIMER: ALL CAPEX FIGURES ARE INDICATIVE ONLY AND ARE SUBJECT TO CHANGE.
Financial discipline and risk management
Example 1: Gearing management Example 2: Dividend payments
2.1X2x
3xNet debt / adjusted EBITDA*
Bt 21.0Bt 21.0
Dividend per share
1.5X
1x
2xBt 16.0
Bt 12.0Bt 8.5
201220112010 20112010200920082007
• Banpu has a track record of strong and growing dividend payments
• Banpu maintains conservative Net debt/EBITDA ratio as contingency for volatile coal prices and macro-economic
diti ( d f thconditions (and for new growth opportunities)
14* Adjusted EBITDA: includes interest in JVs; excludes net gains from disposal from investments in 2010 and 2011
2. Coal operations
15
2. Coal divisions2. Coal operations
(a) Australia Coal
(b) Indonesia Coal
(c) China Coal
(d) Mongolia Coal
16
Australia Coal: operational and financial summary2012 OUTPUT TARGETS (EQUITY BASIS) KEY UPDATES: Q2 2012
Production Equity ROM output 2.9 Mt,
2Q12 ASP A$82/t (up from A$78/t in
Charbon Newstan Extension
Newcastle
q y p ,23% down YoY
Extended longwall changeover at Mandalong
Springvale encountered an
$ ( p $1Q12), Australian GAAP basis
Benefited from improved export sales mix, with e ports at 54% ( p from
Airly
Neubeck Angus Place Mandalong
Mannering Myuna
PWCSInglenook
NCIG area of poor geological conditions during 2Q12
exports at 54% (up from 41% in 1Q12) of total sales
Clarence
SpringvaleNORTHERN OPERATIONS:
8.0 Mt FINANCIAL SUMMARY: Q2 2012
Sales revenue A$269m ▲ 1% YoY
EBITDA A$43 39%Sydney
Open-cut mine
WESTERN OPERATIONS: 7.3 Mt
EBITDA A$43m ▼ 39%
NPAT A$7m ▼ 22%
CAPEX A$64m ▲ 75%
Wollongong
PKCT
ProjectUnderground mine
Port
Power station
RoadRail
Gearing: ND / ND + Equity(Net debt to Net debt + book value of equity)
28.6%
17
Rail
Note: NCIG = Newcastle Coal Infrastructure Group; PWCS = Port Waratah Coal Services; PKCT = Port Kembla Coal Terminal
Australia Coal: Northern Operations quarterly outputOTHER OPERATIONSMANDALONG NEWSTAN EXTENSION
COAL OUTPUT (Mt)* COAL OUTPUT (Mt)*COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg** CV: 6,700 kcal/kg**CV: 6,700 kcal/kg**
1.4 1.81.2
1.8
0.5
1.60.7 0.9 0.8 0.5 0.6 0.7
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
Under construction
● Mandalong development on budget, but longwall significantly outperformed: resulted in extended l ll h f 6 k
LW MOVE SCHEDULE
2 3
LW MOVE SCHEDULE
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
longwall changeover of c. 6 weeks (normally c. 3 weeks)
● Myuna improved during 2Q12, with further improvement expected 2H12 as it moves to extraction
wks wks
6 wks
Mth 1
Mth 2
Mth 3
Mth 1
Mth 2
Mth 3 1 as it moves to extraction
● Mannering restructured at end 2Q12, with two of three units (equipment and crew) moved to Newstan
Mth 3
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
Mth 3
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 4Q12e
1 wk
18Note: *Output figures are ROM output (equity basis)
**CV figures are air-dried basis
Mandalong: extended longwall changeoverTYPICAL PLAN VIEW OF A SERIES OF LONGWALL PANELS LONGWALL EXTRACTION OUTPERFORMANCE
Direction of mining
Direction of mining
1
of miningg
Completed LW ahead
Roadway development on plan, but lagged longwalloutperformance
1
2LW ahead
of plan
Adjacent roadway development for the new longwallpanel occurs simultaneously with longwall extraction
2
19
Newstan: plan
20
Australia Coal: Western Operations quarterly outputOTHER OPERATIONSANGUS PLACE SPRINGVALE
COAL OUTPUT (Mt)* COAL OUTPUT (Mt)* COAL OUTPUT (Mt)*
CV: 6,700 kcal/kg** CV: 6,700 kcal/kg** CV: 6,700 kcal/kg**
0.5 0.5 0.2 0.1 0.3 0.50.40.2 0.5 0.5 0.6 0.6
0.7 1.0 0.9 0.9 0.9 1.2
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
● Angus Place continues to outperform, with weekly and monthly production records achieved in 2Q12
LW MOVE SCHEDULE
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
LW MOVE SCHEDULE
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
● Springvale – 2Q12 impacted by an area of poor geology. Production now approaching normal levels
● 2H12 - Clarence and Charbon moving
Mth 1
Mth 2
Mth 3
10 wks
Mth 1
Mth 2
Mth 3
7 wks
4
5wks
to a more productive extraction phase
● Airly continues to improve, with recent process improvements and the arrival of some delayed equipment
Mth 3
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 4Q12e
Mth 3
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 4Q12e
wks
21Note: *Output figures are ROM output (equity basis)
**CV figures are air-dried basis
Australia Coal: indicative operating costs and ASP
A$/t* 2Q12 mining costs were higher due to
INDICATIVE AVERAGE MINING COSTS COMMENTS
$59
50
60 Longwall changeover at Mandalong Area of poor geology at Springvale. For 2012, mining costs expected to
$52
$59
Planned cost reduction by 10-15%
40Coal handling & preparationCash overheadOpen-cut contractor cost
fall by 10-15% from 2Q12’s due to: Angus Place, Mandalong and
Springvale longwalls operating at full production
Depreciation
30General expenses
Repairs & maintenance
Stores & supplies
full production Charbon, Clarence and Myuna
benefit from extraction activities Continued improvements at Airly
10
20 Stores & supplies
Labor
Mannering restructured, with 2 of 3 units moved to Newstan.
2012 selling, distribution and royalties t d t A$16/t
0Q1 2012 Q2 2012 FULL YEAR
expected to average ~A$16/t.Q2 ASP is A$82/t, with overall 2012 ASP expected lower
2012 PLAN
Indicative average mining costs*
* These figures do not include selling, distribution and royalties costs
22
Australia Coal: key development projects
DEVELOPMENTS ORGANIC GROWTH LOGISTICS PORTS
Banpu Board Approval for development of Newstan Extension obtained. Timing of capital expenditure under
Own locomotives and wagons now delivered – providing logistical flexibility, reducing distribution costs and enabling
NCIG Stage 2AA completed 3 months ahead of schedule and budget - providing additional port capacity to
CAPEX TIMELINES (INDICATIVE ONLY)
cap a e pe d u e u dereview.
d s bu o cos s a d e ab ggreater control of exports.
add o a po capac y oboost export sales.
PROJECT NAME PROGRESSTotal CAPEX
2012 – 15 only (c A$m)
2012 2013 2014 2015(c.A$m)
Western infrastructure Feasibility Study [20]
Newstan extension and C t ti CAPEX PLANSNewstan extension and Northern washeryupgrade
Construction stage [385]
Angus Place extension Pre-Feasibility Study [20]
2016
CAPEX PLANS CURRENTLY UNDER
REVIEW
23
Study
DISCLAIMER: ALL CAPEX FIGURES ARE INDICATIVE ONLY AND ARE SUBJECT TO CHANGE.
2016
2. Coal divisions2. Coal operations
(a) Australia Coal
(b) Indonesia Coal
(c) China Coal
(d) Mongolia Coal
24
Indonesia Coal: operational and financial summary
KITADINTANDUNG MAYANG
2012 OUTPUT TARGETS (100% BASIS) KEY UPDATES: Q2 2012
Production:
Bharinto commenced
2Q12 ASP:
$94 6/t (down 3% fromEast
Kalimantan
INDOMINCO 15.0 Mt Bontang Coal Terminal
TANDUNG MAYANG2.7 Mt
Bharinto commenced operation since early April 12
2Q12 output achieved according to plan
$94.6/t (down 3% from $97.4/t in 2Q11 and down 6% from $101.1/t in 1Q12)
Bunyut Port
KITADIN
TRUBAINDO 7.0 Mt Samarinda
Captive coal-fired power
project
according to plan
ITM production 2Q12 : 6.8mt, up 17% YoY
BalikpapanCentral Kalimantan
KITADIN-EMBALUT 0.7 MtBHARINTO
0.7 MtFINANCIAL SUMMARY: Q2 2012
Sales revenue $626m ▲ 25% YoYPalangkaraya
Banjarmasin
South Kalimantan EBITDA $168m ▲ 2%
NPAT $119m ▲ 5%
JORONG 1.0 MtJorong Port
OperationProject
OperationProject
POWER
COAL
CAPEX $12m ▲ 1%
Gearing: ND / Equity(Net debt to book value of equity) -52% from
-44%
25
Project
Indonesia Coal: quarterly outputTRUBAINDO - BHARINTO EMBALUT - JORONGINDOMINCO - BONTANG
COAL OUTPUT (Mt)*
CV: 6050 - 6500 kcal/kg**
COAL OUTPUT (Mt)*
CV: 6250 - 7200 kcal/kg**
COAL OUTPUT (Mt)*
CV: 5750 kcal/kg**
TDM
YC
K
TO
EM
BA
LUT
2 1 2 0 0.5
0.70.6
3.4
4.24.5
3.64.2 4.4
0.3 0.3 0.4 0.3 0.3 0.3
CV: 5300 kcal/kg**
BLO
CK
WB
LO
BA
IND
OB
HA
RIN
T
RO
NG
1 7 2.1 2.1 2.1
3.8
1.7
2.1 2.0
1.41.4
1 7 1 82.1
1 7 2.0 2.0
0.2
2.3 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
E B
TRU
B
JOR
STRIP RATIOS (b /t) STRIP RATIOS (b /t) STRIP RATIOS (b /t)
1.7 2.1 2.11.6
2.10.4 0.4 0.3 0.3 0.4 0.21.7 1.8 1.7 0
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
STRIP RATIOS (bcm/t) STRIP RATIOS (bcm/t) STRIP RATIOS (bcm/t)
13.1 13.312.5
WB
LOC
K
11.58.7
11.2
KIT
AD
IN
12.111.7
14.0 15.811.613.8
10.9 10.910.9
E B
LOC
K
TRU
BA
IND
O
8.68.6 8.6JOR
ON
G
10.011.9 14.1 13.4 13.5
11.78.6 8.6
12.511.2
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
8.610.5
26Note: *Output figures are 100% basis
**CV figures are air-dried basis
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12e
Indonesia Coal: key development projects
DEVELOPMENTS Bontang Port ExpansionIPCC Systems*
PIT
SPREADER STOCKPILE
Bunyut Port Expansion
100 m
50 m
BENCHES
BACKHOEEXCAVATOR
TRUCK
IN-PITCRUSHER
IN-PITCONVEYORS 100 m
50 m
Conducted an external study to expand existing port capacity and mine-stock capacity at Bontang
On process of importing the crusher and conveyer unit and expected to be completed by end of the year
Prospective consultants submitted ‘Expression of Interest’ for the study phase
CAPEX TIMELINES (INDICATIVE ONLY) PROJECT NAME PROGRESS
Total CAPEX 2012 – 15 only
(c.US$m)2012 2013 2014 2015
p y gy
(c.US$m)
Bharinto Production stage [100]
IMM - East block IPCC System
FeasibilityStudy [85]
CAPEX PLANSSystem Study
BoCT expansion to 30 Mtpa
FeasibilityStudy [40]
Bunyut port expansion FeasibilityStudy [20]
CAPEX PLANS CURRENTLY UNDER
REVIEW
27Note: IPCC System = In Pit Coal Crusher and Conveyor System
Study [ ]
DISCLAIMER: ALL CAPEX FIGURES ARE INDICATIVE ONLY AND ARE SUBJECT TO CHANGE.
2. Coal divisions2. Coal operations
(a) Australia Coal
(b) Indonesia Coal
(c) China Coal
(d) Mongolia Coal
28
China Coal: operational and financial summaryCHINA COAL 2012 PRODUCTION TARGETS* OPERATIONAL UPDATES
GAOHE
All i ht i d i ti d t G h i 2Q● All eight required inspections passed at Gaohe in 2Q.
● Opening Ceremony was held on the morning of June 28th
following the Final Acceptance Inspection on June 27th.
● The Official Approval Document for the Final Acceptance BEIJING
Gaohe(45%),Shanxi
from the NDRC was received and submitted to ChangzhiCoal Mine Safety Administration in order to apply for the Safety and Production Licenses.
● Gaohe has finished the preliminary design of railway spur about 8 km and worked on land acquisition
Hebi(40%),
3.8 Mt
about 8 km and worked on land acquisition.
● Gaohe began to build another 6 raw coal silos (Phase 2), capacity of 10,000 tonnes each.
2012 COAL OUTPUT (Mt ROM)
( ),Henan1.2 Mt
OperationProjectOperationProject
POWERCOAL
Summary 1Q12 2Q12Pre-production stage
1.01.2 0.9
0.6
0.2 0.3 0.40.30.4 0.5 0.5 0.5
ySales (Mt) 1.0 1.0ASP (RMB/t) 669 628Revenue (US$ M) 101 101COGS (RMB/t) 377 400EBITDA (US$ M) 50 40
GaoheCV: 6500-8000 Kcal/kg**
HebiCV: 5300-6800 Kcal/kg**
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12HEBI
● Continue to drill 10 exploration drill holes in a new mining area, to check geology and coal quality.
29Note: *Output figures are ROM output (equity basis)
**CV figures are air-dried basis
2. Coal divisions2. Coal operations
(a) Australia Coal
(b) Indonesia Coal
(c) China Coal
(d) Mongolia Coal
30
Mongolia Coal: project developmentTSANT UUL PROJECT UPDATE
● Exploration area: 69,000 hectares
MONGOLIA COAL
● Resources (JORC as of August 2011) for Tsant Uul hectares
● Location: South Gobi (approximately 200 km from Gants Mod border checkpoint)
August 2011) for Tsant Uulonly:
Measured: 40.9 MtI di t d 52 9 Mt p )
● Status: Mining license granted until 2041
Indicated: 52.9 MtInferred: 73.3 MtTotal: 167.1 Mt
CAPEX TIMELINE
● Coal type: Thermal coal, CV 6,000 - 6,500 kcal/kg**
PROJECTNAME PROGRESS
CAPEX 2012 – 15 only
(US$m)2012 2013 2014 2015
Tsant Uul Productionstage
[100]
CAPEX PLANSstage
Altai Nuurs Exploration and early stage dev.
[100]Tsant UulCV: 6,000 - 6,500 kcal/kg **
(INDICATIVE ONLY)
CAPEX PLANS CURRENTLY UNDER
REVIEW
31
Note: * Output figures are ROM output (100% basis)
** CV figures are NAR basis, from latest samples
*** Capex for mine development and necessary infrastructure, with own equipment
Banpu group indicative five-year plan output targets*
INDONESIA COAL (ITM): SALEABLE COAL 100% BASIS
35
AUSTRALIA COAL (CENTENNIAL): ROM EQUITY BASIS
35
25
30Bharinto Jorong
Embalut
Trubaindo
Tandung Mayan
25
30
10
15
20Trubaindo
Indominco10
15
20
Others - West
Springvale (50%)Angus Place (50%)Others - North
0
5
2011 2012 2013 2014 2015
Indominco
0
5
2011 2012 2013 2014 2015
Others - NorthNewstan Ext (100%)
Mandalong (100%)
810
CHINA COAL: ROM EQUITY BASIS MONGOLIA COAL (HUNNU): ROM 100% BASIS
810
0246
2011 2012 2013 2014 20150246
2011 2012 2013 2014 2015
Gaohe (45%)Hebi (40%)
*Disclaimer: These output targets are indicative only and are subject to change. 32
2. Coal divisions3. Coal marketing
(a) Coal market
(b) Banpu coal sales
33
2Q 2012 update - seaborne thermal coal market drivers
WEATHER CHINESE DEMAND OTHER DRIVERS
• Downward trend in sentiment, despite global coal trade expanding.
• Uncertainty impacting forecasts due to
• Indonesia normal. Stocks built up.
• Chinese winter/summer normal. Good
• GDP growth declining possibly below announced levels.
• Coal production increased beyond y p gEuropean debt concerns, and GDP and employment levels generally.
• US exports high until end 2012, then unhedged prices vs. cost will impact.
Chinese winter/summer normal. Good rains increase hydro.
• Australia nothing significant.
p ydemand increase.
• Imports in 1H 2012, double 1H 2011.
• Policy uncertainty and level of
• Gas prices support coal demand in Europe but opposite in USA which diverted coal to export.
• 2012 ld th f t 2 1%*
• USA mild 1H, reduces demand. planned stimulation affecting confidence.
• Overall impact – high stock and low domestic price.
• 2012 world growth forecast 2.1%* (Prev. 2.2%**) ; Asian growth forecast 6.0%* (Prev. 6.5%**)
• Uncertainty of rate/timing of Chinese import increase.
*Country Forecast August 2012 from The Economist Intelligence Unit Limited 2012 as of 16 July,2012**Banpu Macroeconomic Assumptions as of April 2012
34
Banpu average selling prices in 3Q10Banpu Indonesia ASPs vs thermal coal benchmark prices
BANPU ASP VS BENCHMARK PRICES COMMENTS
Unit: $/t
160
180
200
Monthly BJIQuarterly Banpu Indonesia ASP
ASP held up well in 1Q 2012, but 2Q market starts to cap and reduce prospects.
100
120
140 Continuing pressure from weaker market prices and product mix, impacts ASP and tonnage but not significantly
40
60
80 Banpu remains protected by relatively high ‘sold with price’ status (+81%) and negligible reliance of traders as buyers.
0
20
ar-0
7un
-07
ep-0
7ec
-07
ar-0
8un
-08
ep-0
8ec
-08
ar-0
9un
-09
ep-0
9ec
-09
ar-1
0un
-10
ep-1
0ec
-10
ar-1
1un
-11
ep-1
1ec
-11
ar-1
2un
-12
negligible reliance of traders as buyers.
Also protected by hedge status (+6%), and Centennial’s domestic contract t bilit ith li k f l ll tM
aJu Se
De Ma
Ju Se
De Ma
Ju Se
De Ma
Ju Se
De Ma
Ju Se
De Ma
Ju
ASP 2Q12 $94.05 (-6% QoQ)
BJI* August 9, 2012 $91.85
stability with linkage of sales usually to JPU, or GC Newcastle.
3535* Barlow Jonker Index: benchmark NSW FOB thermal coal index
China thermal coal market reviewChina thermal coal market review
Unit: RMB
CHINA DOMESTIC COAL PRICES CHINA THERMAL COAL IMPORTS/EXPORTS ANNUALIZED ACTUAL IMPORT 2Q11 - 2Q12 & 3Q12 ESTIMATE
Unit: Mt Unit: Mt
1,000
128
143
116
151
93103
> 5,800 kcal/kg
> 5,500 kcal/kg
> 5,000 kcal/kg ?
840
785800
900
,
73
104
58
93
N t
Net importc.121
700
615
685
515
600
700
18 14
Net import96 Mt
Mt ?
515
400
500
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Est
147 6
2009 2010 2011 2012
Import ExportImport Export
Source: www.sxcoal.com/cn 30 July 2012 Sources: China Coal Report July 2012, Banpu MS&L Estimates
3636
US shale gas: medium and long term trends
MEDIUM TERM TREND LONG TERM TREND
2012: year of coinciding extremes USA2012: year of coinciding extremes• Cheap shale gas creates excess coal
stocks in the US• High coal prices and very low freight
USA• Increasing share of natural gas
consumption in the local markets• Higher USA growth prospects due to• High coal prices and very low freight
rates allow US to export its coal• Most exports hedged to end 20122013: year of adjustment
• Higher USA growth prospects due to lower energy costs
• Coal industry adjusts by rationalization• Exports have higher share of high sulfur2013: year of adjustment
Atlantic• Re-adjust and cutback traditional US
exports of high quality high cost products
Exports have higher share of high sulfur products
China / Australia• More difficult to extract shale gasexports of high quality, high cost products
• More demand for Russia, Colombia, South Africa to balance sulfur
Pacific
More difficult to extract shale gas reservoirs. Early days.
• Consumption and delivery of pipeline is likely to be delayedPacific
• Significantly reduced Atlantic coal supply• Supply reduced due output cuts
• Wood Mackenzie expects shale gas in China not significant before 2020
37
US shale gas: limited threats from US coal exports to Asia
LOW US GAS PRICE IS UNSUSTAINABLE US COAL AND NATURAL GAS PRICES
US$/mmbtu• Domestic gas demand is likely to rise
from additional US petchemexpansions and NGV vehicles 12
13
14US$/mmbtu
• 2011 winter was unusually warm
• Avg breakeven price for shale gas at 8
9
10
11
• Avg. breakeven price for shale gas at $3.8 per mmbtu vs. 1Q low point of $1.9 per mmbtu
5
6
7
8
> US$4/mmbtuWoodmac
• Powder River Basin coal remains competitive to gas and less impacted by cheap gas. Delivered CV-adjusted
t t A i b di t d2
3
4
Central Appalachian coal
Henry Hub natural gas
$by 2013
cost to Asia above discounted Indonesian sub bituminous product. 0
1
2014201320122011201020092008
Source: Wood Mackenzie, EIA, Bloomberg, AWR Lloyd estimates
Powder River Basin coal (PRB)
38
Source: Wood Mackenzie, EIA, Bloomberg, AWR Lloyd estimates
2. Coal divisions3. Coal marketing
(a) Coal market
(b) Banpu coal sales
39
Banpu group coal sales outlook analysis: 2012e
COAL SALES* BREAKDOWN BY DESTINATION 2012e (Mt) BANPU GROUP TOTAL GLOBAL COAL SALES* 2012e
2.2 22%3% 4%
China
Italy Others
S KOREA2 8 Mt
CHINA9 5 Mt
ITALY1.4 Mt
2.2
1.9
4.6
6.2 1.5
1.1 22%
19%Australia
JAPAN6.5 Mt
INDIA OTHERSHK
0.6 Mt
2.8 Mt9.5 Mt
TAIWAN3.9 Mt
1.9
1.91.70.42.0 15%
4%
5% JapanIndia
PHILIPPINES1.7 Mt
INDONESIA2 7 Mt
THAILAND1.9 Mt
INDIA2.4 Mt
OTHERS2.1 Mt
6%9%1%6%
4%4%
Taiwan
S KoreaThailand
Philippines
Indonesia
Australia CoalChina Coal
Indonesia Coal Total: 44.0Mt* (Sales from Indonesia are included on 100% basis,
sales from Australia and China are included on equity basis )
2.7 Mt
AUSTRALIA8.5Mt
TaiwanHong Kong
40
* Excluding Mongolia coal
Indicative 2012 Banpu coal sales pricing status
Unsold
AUSTRALIA COAL INDONESIA COAL
6%
13%Indexed
Unsold4%
3%IndexedUnsold
81% Fixed58%35%FixedDomestic
Fixed Export
TARGET SALES 2012 (equity basis): c.15 MtAs at 31 July 2012
TARGET SALES 2012: c. 26 MtAs at 31 July 2012As at 31 July 2012
Limited exposure to prevailing market prices
As at 31 July 2012
Mostly insulated from market weakness (including hedged tonnes 87% of sales)
New export parity domestic contracts commenced 1 July, increasing sales certainty and improving domestic (and total sales) ASP
hedged tonnes, 87% of sales)
41
* Contracted tonnage
4. Power business
42
Thailand Power: BLCP in 2Q12 (100% basis)Bt. million
Q-Q: 8%Y-Y: 3% 5,026
Q-Q: 18%
Y-Y: 1%
Q-Q: 20%Y-Y: 2%
2,334
1,9882,382
4,8584,672
635
645
548
2Q11 1Q12 2Q12
Availability Payment (AP)
Q-Q: 62%Y-Y: 9%
2Q11 1Q12 2Q12Total revenue
1 837
768696
FX gain
122
Q-Q: -0.1%Y-Y: 8%
2,245 2,420 2,418
Y Y: 9%1,688
1,137
1,837
426
96% 97% 98%
2Q11 1Q12 2Q12Energy Payment (EP)
Q-Q: 42%Y Y 6%
2Q11 1Q12 2Q12
EBIT
-123FX (loss)
-61
Y-Y: 6%2,218
1,659
2,352
Based on Banpu’s 50% interest
2Q11 1Q12 2Q12
Equity income
2Q11 1Q12 2Q12
Dispatch (%)2Q11 1Q12 2Q12
EBITDA 43
p
Thailand Power: Hongsa Project in LaosHONGSA PROJECT PROJECT PROGRESS UPDATES 2Q12
● Construction progress at end 2Q was approx. 20% MAIN ROAD FROM THAI BORDERPOWER PLANT – BOILER
STRUCTURE p g pp(slightly ahead of the schedule)
● Main road from Thai border to the project site was completed since May 2012.
STRUCTURE
● Activities in Power Plant area are focusing on boiler structure and stack construction
● Resettlement houses completed
● Pipeline from water reservoirs to power plant is in progress and will be completed in 2013
POWER PLANT – STACK CONSTRUCTION
PIPELINE FROM WATER RESERVIORS TO POWER PLANT
CAPEX TIMELINE
● COD of first unit will be on June 2015.
PROJECT NAME
CONSTRUCTION PROGRESS
CAPEX ($m)
CAPEX TIMELINE
2012 2013 2014 2015 2016
HongsaPower 19.7% 340* 85 168 87
44
Note: *Banpu’s equity injection
China Power: BIC* in 2Q12 (100% basis)
Sales**
(USD m)
EBITDA
(USD m)
Utilization
(hours)
Power tariff
(RMB/kwh)
Coal price***
(RMB/t)BIC* 2Q11 1Q12 2Q12
LuannanHebei Province
Power 100MW;
Steam 128tph
Lower sales and EBITDA due to decrease in residential h ti i
0.44
6751,75814.510.3
2.61.5
1,361
6771,500
0.44 0.4466710.5
1 4Steam 128tph
(Banpu 100% )heating revenue in non heating season.
ZhengdingL l d
1,981
1.4
Hebei Province
Power 48MW;
Steam 180tph
(Banpu 100%)
Lower sales and EBITDA due to decrease in residential heating revenue in non heating season.
0.40
13.5
3.96809.3
1.8
1,874657
0.38
1,655
6530.417.6
1.3( p ) g
ZoupingShandong Province
Reduction in sales due to lower steam demand has been offset by the
22.8
1 532
939
8861,834 1,726
22.821.4
Power 100MW;
Steam 430tph
(Banpu 70%)
has been offset by the lower coal cost due to drop in coal price, that led the growth in EBITDA.
3.7
1,5320.434.4 0.37
886 8450.45
3.3
Note: *BIC = Banpu Investment China (formerly BPIC), **Unaudited figures, *** Including transportation45
5. Financial summary
46
Key external and corporate events
Downgrade 9 Greece passes austerity plan China’sT
Moody’s downgrades of ECB president
EVEN
TS
euro zone nations
BoT cuts interest rate
to 3%
austerity plan China s disappointing Q1 GDP growth
European elections shockwave
IND
IRE
CT downgrades of
German bank credit ratings
Fears of Greek exit from Euro recede
EU Summit held
ECB president supportive comments for Euro
EXTE
RN
AL
Indonesia exportEC
T
EU Summit held in BrusselChina’s
inflation eases, room for stimulus
Indonesia foreign
ownership limit
Indonesia export tax on minerals
Request for contract review
DIR
E
Australian MRRT and carbon tax commenced
EVEN
TS
18 Jan 11 May
Aug’ 121Q12
10 Aug
Jul’ 122Q12
24 Jul
OR
POR
ATE
Announcement of special Bt 3 dividend to be paid on 10 Feb
• Banpu 2011 results• 2H11 Bt 9 dividend
to be paid on 30 Apr• R&R upgrades
24 Feb
Banpu AGM 2012
Banpu 1Q12 results
5 Apr
Banpu 2Q12 results
Banpu announced cost and capexreduction plan
47
CO
Approved Annual Dividend of 21 Baht/share (incl. special dividend 3 Baht/share)
Approved bond issue Bt20 billion
Banpu group revenue analysis: coal operationsIndonesia Coal (ITM)
SALES (Mt)
China Coal
SALES (Mt)DomesticExport
Equity basis100% basis DomesticExport
Australia Coal (Centennial)
SALES (Mt) Equity basisDomesticExport
2.3 2.7 2.1 2.1 1.5
3.7 4.1 3.4 3.5 3.3
2Q11 3Q11 4Q11 1Q12 2Q12
4.7 6.1 6.5 5.2 5.8
5.26.9 7.1
5.8 6.6
2Q11 3Q11 4Q11 1Q12 2Q12
0.4 0.4 0.4 0.5 0.6
2Q11 3Q11 4Q11 1Q12 2Q122Q11 3Q11 4Q11 1Q12 2Q122Q11 3Q11 4Q11 1Q12 2Q12
AVERAGE SELLING PRICE (US$/t)
NE
X*
AVERAGE SELLING PRICE (US$/t) excl. VAT
2Q11 3Q11 4Q11 1Q12 2Q12
118 122110 110 N
EX
* 118 122110 110
AVERAGE SELLING PRICE (A$/t)**
NE
X* 118 122
110 110NA
SP
97
97 98 103 101 95
2Q11 3Q11 4Q11 1Q12 2Q12
AS
P
91 96 92107 94
2Q11 3Q11 4Q11 1Q12 2Q12
N
97
AS
P73 70 77 78 82
2Q11 3Q11 4Q11 1Q12 2Q12
N
97
REVENUE ($M)
500675 729
575 626
REVENUE ($M)100% basis 100% basisREVENUE (A$M) Equity basis
Note: ITM revenue is consolidated in Banpu income
500
2Q11 3Q11 4Q11 1Q12 2Q12
Note: Hebi and Gaohe revenues are not consolidated in
77 92 81 123 123
2Q11 3Q11 4Q11 1Q12 2Q12
266 287 261 273 269
2Q11 3Q11 4Q11 1Q12 2Q12
48
o e e e ue s co so da ed a pu co estatement.
Note: ‘$’ in this presentation denotes US dollar only, otherwise stated *NEX = Newcastle Export Index (formerly Barlow Jonker Index or BJI)
It is relevant but not linked to China Coal’s ASP**Australian GAAP
o e eb a d Gao e e e ues a e o co so da edBanpu income statement.
Banpu consolidated sales revenues
Bt. millionUSD
USD 947 m
1 281 Power
Bt 28,310 M Bt 29,644 M
913 m
USD 822 m
+5% Q Q
8,3528,2351,239
1,573 1,281
+19% Y –Y Power-19% Q – Q+3% Y - Y
Bt 24,888 M
Coal Australia-1% Q- Q
*Australian GAAP (AUD Million)
273 269
+5% Q – Q
7,918
C l I d i
+4% Y - Y18 * Gain from
forward
8
255255
15,73018,385 20,127
Coal Indonesia
+9% Q – Q+28% Y - YPower
Coal Australia
1Q12 2Q12
2Q11 1Q12 2Q12
Coal Indonesia
49
2Q11 1Q12 2Q12
Note: USD exchange rate is the average exchange rate of the corresponding period, Revenue from other is included in Coal.* Under Thai GAAP, this is not included in the revenue.
Banpu consolidated coal gross margin 2Q12 : 39%
AUSTRALIA COAL INDONESIA COAL
Indonesia CoalBt million
Indonesia Coal gross margin: 44%
20,000
A t li i 30%
Bt million
A t li i 28%
Thai GAAP Australian GAAPAUD million
0,000
18,268
15,662 Australia gross margin: 30%Australia gross margin: 28%
8,5758 3527,918 8,5758,352
266 26927344%49%
50%
2Q11 1Q12 2Q12
28%33%28%
2Q11 1Q12 2Q12
30%37%33%
2Q11 1Q12 2Q12
50Note: AUD exchange rate – Bt32.87/A$ (as of 30 June 2012)
Coal sales Gross margin
Banpu consolidated EBITDA and NPATUnit: Bt. million
EBITDA NET PROFIT AFTER TAX
+1% Q – Q
657 477 848
7,109 7,174 7,227 Power
+78% Q-Q+29% Y-YCoal Australia
% Q Q
-2% Q - Q
+2% Y – Y
629
444306 660
2,7853,161
2,734146 187 239
1,502 1,671 1,245Coal - Australia -25% Q-Q-17% Y-Y
2% Q Q-14% Y - Y
Power Coal - China +116% Q-Q-30% Y-Y
+28% Q-Q+64% Y-Y
1,9421,464
1,966
146187
238629
828
Coal - Indonesia +34% Q-Q
+28% Q-Q+63% Y-Y4,804 4,839 4,895
Coal - Indonesia +2% Q-Q+2% Y-Y
Coal - China
-130
2Q11 1Q12 2Q12
34% Q Q+1% Y-Y
Coal - Australia
2Q11 1Q12 2Q12
Coal - China
51Power Coal - Australia Coal - China Coal - Indonesia
Banpu gearing and foreign exchange structure
DEBT FX STRUCTURE GEARING RATIOS
1.06Net debt / Equity1 (x)
0.140.36
0.16
0.74 0.77
USD Float
THB Fixed19%
2007 2008 2009 2010 2011 2Q12
51%42% 44%
Net market gearing2 (%)
USD Float49%
AUD Fixed
5%
THB Float9% 12%
26%14%
USD Fixed17%
AUD Float2%
5% 2007 2008 2009 2010 2011 2Q12
3.35
2.06
Net debt / EBITDA (x)
0.500.86
0.38
2007 2008 2009 2010 2011 2Q12
TOTAL DEBT: $3 BillionAs of 7 July 2012
2Q12
52Note: 1 Net debt to book value of shareholders' equity
2 Net debt to enterprise value (enterprise value = net debt + market capitalization as at 30 June 2012)
Appendices
53
Indonesia Coal gross margin 2Q12 : 44%
20,00018,268
15 66215,662
44%49%50%
8,8909,792
8,661
5 3566,6216,400
50%
46%50% 39% 52%50% 45%
5,356
53%53%
52%747 576 62339% 36% 43%
53%53%
52%6681,250 843
52% 46% 44%
1,380 2,121
65%61%
1Q11 1Q12 2Q122Q11 1Q12 2Q12
Indonesia CoalIndominco
2Q11 1Q12 2Q12
Trubaindo
2Q11 1Q12 2Q12
Jorong
39% 36% 43%
2Q11 1Q12 2Q12
52%
Kitadin
1Q12 2Q12
TandungM
54Coal sales Gross margin
Indonesia CoalIndominco Trubaindo Jorong Kitadin Mayang
Banpu group EBITDA breakdown
& holding companies
Unit: $M
3Q11 4Q11 1Q12 2Q12
318 267 233 231
233 235 184 168
Power & New energy65%
AACI OVERHEAD
-7 -2 -5 -4
100%
86 82 78 43 -1 -2 -7Began consolidated in 4Q11
Unit: AUD Mil
66 15 54 75
25-7
50 40151 126 93 79
50%
45%
Gaohe
BLCP
Indominco
3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12
3Q11 4Q11 1Q12 2Q12
Began consolidated in 4Q11
All figures are 100% basis except for Centennial which is
-4 -4 -1 -2
5 -17 -7 461 65 66 49
40%
40%
Hebi
HONGSA
Trubaindo
3Q11 4Q11 1Q12 2Q12
3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12equity basis
16 44 35 40
BIC*Kitadin
3Q11 4Q11 1Q12 2Q12
3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12
4 5 9 3
4 4 3 4
70%
Zouping
2 3 3 3
Zhengding
1 2 3 1
Luannan
1 3 4 1
Jorong
3Q Q Q Q3Q11 4Q11 1Q12 2Q12
55Note: all ownership 100% unless otherwise shown.*BIC = Banpu Investment China (formerly BPIC) Consolidated NOT consolidated
3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12
Banpu group net debt breakdown
& holding
2,051 2,403 2,419 2,572 Unit: $M
companies
3Q11 4Q11 1Q12 2Q12
AUSTRALIA COAL INDONESIA COAL CHINA COAL MONGOLIA COAL
Gaohe Hebi
100% 65% 45% 40% 100%
254 269 265 251
3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12
379 323 415 353-579 -612 -771 -532
-38 -29 -9 -1 -3 -9 -16Unit: AUD Mil
THAILAND POWER LAOS POWER CHINA POWER
HONGSABLCP BIC*
50% 40% 100%
460 538 609 703
Consolidated
NOT consolidated
Net debt
Net cash3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12 3Q11 4Q11 1Q12 2Q12
680 700 510 422 -3
21
-11 -5
56Note: all ownership 100% unless otherwise shown.*BIC = Banpu Investment China (formerly BPIC)
Net cash
Banpu consolidated : operating profit
Units: Bt. million 2Q12 QoQ% YoY%
5% 19%Total sales revenues*
1Q12
28,310
2Q11
24,88829,644
Sales revenues – Power (BIC)Cost of sales
Sales revenues – Coal 6% 20%-19% 3%1,573
(16,314)
26,6231,239
(14,735)
23,5871,281
(18,359)
28,256
Gross profit* -6% 11%Gross profit - Coal -5% 11%Gross profit – Power (BIC) -33% 45%
11,99611,689
277
10,15210,004
127
11,28511,070
185
GPMGross profit Power (BIC)
GPM P (BIC)GPM - Coal
33% 45%42%277
%44%
41%
%42%
38%85
%39%
GPM – Power (BIC) 18% 10%14%
Note: * Including other business 57
Banpu consolidated: operating profit
Units: Bt. million
Gross profit -6% 11%GPM
2Q12 QoQ% YoY%
11,99642%
1Q12
10,15241%
2Q11
11,28538%GPM
SG&ARoyaltyIncome from associates
42%(3,421)(2,753)
567
41%(2,769)(2,428)
800
38%(3,539)(2,964)1 052
Other income
EBIT -1% 2%Other expenses - Operations
272
5,764
567
(898)279
5,614
800
(421)297
5,724
1,052
(406)1% 2%
EBITDA 1% 2%
EBIT - Coal -8% -2%EBIT - Power 111% 39%
5,764
7,174
5,400364
5,614
7,109
5,063551
5,724
7,227
4,957767
EBITDA 1% 2%EBITDA - Coal -5% -1%EBITDA - Power 78% 29%
7,1746,697
477
7,1096,452
657
7,2276,379
848
58
Banpu consolidated : net profit
Q 1Q12Units: Bt. million
EBITInterest expenses
YoY%2Q12 QoQ%
-1% 2%(824)
1Q12
5,764(770)
2Q11
5,614(860)
5,724Interest expensesFinancial expensesIncome tax (core business)Minorities
(824)(88)
(1,724)(1 193)
(770)(82)
(1,216)(1 180)
(860)(85)
(1,649)(1 688)Minorities
Net profit before extra items
Non-recurring items*
-39%-25%(1,193)1,934
282
(1,180)2,365(110)
(1,688)1,4421,103
Net profit before FX 13%
FX translationsNet profit -14%
15%
-2%
2,216569
2,785
2,255906
3,161
2,545189
2,734Net profit 14%
EPS (Bt/share)
2%2,78510.25
3,16111.63
2,73410.06
Note: * Income from non-core assets and other non-operating expenses
59
Centennial : Income Statement
Units: Bt million (THAI GAAP) 2Q12 QoQ% YoY%1Q12 2Q11
Cost of sales
-6%Sales revenue
Sales volume (k tonnes)
-1%-11%
4%(5,593)
3,4968,352
(5,693)
3,6607,918
(5,899)
3,2748,235
Gross profit -15%GPM SG&A 5%
5%
24%
( )
2,75933%
(1,439)
( )
2,22528%
(1,223)
( )
2,33628%
(1,518)RoyaltySG&A 5%
0%
-60%EBITOther income 20%
24%6%
-39%17%
(577)(1,439)
81067
(542)(1,223)
52969
(576)(1,518)
32381
60%EBITInterest expensesFinancial expensesGain (loss) on exchange rate
39%810(202)(39)113
529(171)(34)66
323(188)(38)
(111)Gain (loss) on exchange rate
Corporate income tax
N t fit
Gain (loss) on derivative 113
-582
66
(38)640
(111)
-246
60
Net profit -82% -77%1,264 992233
Banpu group coal sales 2Q12
COAL SALES BREAKDOWN BY DESTINATION 2Q12 (Mt) BANPU GROUP TOTAL GLOBAL COAL SALES 2Q12
%14%3%
2%Australia China
ItalyOthers
21%14%
S KOREA1 1 Mt
CHINA2.2 Mt
ITALY0.3 Mt
0.6
1 0
1.60.60.5
0.6
15%
5%
4%
8%
JapanPhilippines
IndiaJAPAN1.6 Mt
INDIA OTHERSHK
0.2 Mt
1.1 Mt
TAIWAN0.8 Mt
1.0
0.40.4
10%7%2%
7%
5%
S Korea
Thailand
Indonesia
PHILIPPINES0.5 Mt
THAILAND0.5 Mt
INDIA0.9 Mt
OTHERS0.2 Mt
INDONESIA0 8 Mt
Total: 10.4Mt (Sales from Indonesia are included on 100% basis,
sales from Australia and China are included on equity basis )Australia CoalChina Coal
Indonesia Coal
TaiwanHong Kong
AUSTRALIA1.5 Mt
0.8 Mt
61
Centennial: quarterly equity ROM output
3.9
4.6
3.9 4.13 7 3.9
4 04.55.0
Total equity ROM (Mt)ACTUAL PLANNED (INDICATIVE ONLY)
2.41.1
2.3
2.2 1.62.2 1.6 1.9
2.93.5 3.7
2.02.53.03.54.0
NO
RTH
ER
N
1.5 1.82.3
1.7 1.9 1.9 2.1 2.0
0.00.51.01.5
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
WE
STE
RN
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13
5 wks
10 wks
6 wks 7 wks 3 2
Normal production Bolt-up/commissioning LW relocation
62Note: Bar width is indicative of the equity production contributions to Centennial
US shale gas: limited threats from US coal exports to Asia
US COAL EXPORTS TO ASIA IS LIMITED US COAL EXPORT BREAKDOWN (Mt)
• Majority of additional export went to Europe and North America.
335
34
40
1Q12YoY• In 1Q12, YoY growth for coal exports
to Asia actually declined
• Challenging economics for export to2
23Others
7
YoY-0.3 Mt (-1.2 Mt)**QoQ+0.5 Mt(+2.0 Mt)**
• Challenging economics for export to Asia over LT
• High FOB cost – c.U$70/t for Powder 262
7
1
20
AfricaAsia 1
** annualised
High FOB cost c.U$70/t for Powder River Basin coal (5,000 kcal/kg with low sulfur)
139 8
18
26
4
1
1 1
Asia
Europe
• But some Illinois Basin + Pittsburg 8 seam coals competitive, depending on freight and options in Atlantic
201020092008 1Q12 annualised
2011
Source: Wood Mackenzie, EIA, Bloomberg, AWR Lloyd estimates
63
US shale gas: limited threats from US coal exports to Asia
Port capacity
155149141
TOTAL US COAL PORT CAPACITY(Mt)
• Future expansions need to also address political and permit issuesPort capacity
201320122011141414Port capacity
WEST COAST (Mt)
Northern LigniteLow sulfur
address political and permit issues
22 24 25Baltimore919088
201320122011EAST COAST(Mt)
• Potential coal export route to Asia
3,333 – 3,889 kcal/kgNorth PRBLow sulfur4,833 – 5,278 kcal/kg
S. WyomingLow-Mid sulfur
South PRBVery low sulfur4,333 – 4,889 kcal/kg
Illinois basin
Hamton Road
2013
66
2012
66
2011
66route to Asia Low-Mid sulfur
5,000 – 6,667 kcal/kg
Rocky mountain regionLow sulfur4,444 – 6,667 kcal/kg
Central AppalachianLow to Mid6,667+ kcal/kg
High sulfur6,111+ kcal/kg
Four cornersLow to mid sulfur
Gulf ligniteLow to mid sulfur3,333 – 4,444 kcal/kg
4,722 – 6,667 kcal/kg
14 164616
39
OthMobile
50
34
US GULF (Mt)OperatingOperating w/ planned expansionPl d
642012
30
2011
25 Others
2013
34Planned
Source: Platts, AWR Lloyd estimates
Focus: reducing costs in Indonesia in 2012 (cont’d)
ILLUSTRATIVE MINE PLAN CHANGE (INDOMINCO)
• At Indominco mine plan can be changed to reduce strip
ORIGINAL PLANSR 13.2
NEW PLANSR 12.6
At Indominco mine plan can be changed to reduce strip ratio without affecting output target and coal quality
• Tonnage can be made up from mining other sections of existing pits with lower strip ratios
• Limited reserves impact within next two years
OVERBURDEN
OVERBURDEN
COAL SEAM COAL SEAM
65
Hongsa: target revenue and EBITDA structure
6%Viable O&M
13 yrs 25 yrsREVENUE
STRUCTURE
I di ti t t d
Energy Payment
38%Fuel payment
O&M Indicative targeted revenue range (nominal)
Indicative targeted EBITDA range (nominal)
Availability Payment 56%
NOTE: FIGURES SHOWN ARE ON 100% BASIS
66ILLUSTRATIVE & INDICATIVE ONLY