portiga - final report phase i

Strictly Limited and Confidential

Project Portiga (Phase 1)Strategic Review on Financing Strategy of Pelindo III23 December 2015

DISCLAIMER

This confidential Report (the “document”) has been exclusively prepared by PT Bahana Securities (“Bahana”) for PT Pelabuhan Indonesia III (Persero) (“Pelindo III”), in relation to

Strategic Review on Financing Strategy of Pelindo III (the “Assignment”). The information contained in this report has been taken from sources which we deem reliable. However,

none of PT Bahana Securities and/or its affiliated companies and/or their respective employees and/or agents makes any representation or warranty (express or implied) or accepts

any responsibility or liability as to, or in relation to, the accuracy or completeness of the information and opinions contained in this report or as to any information contained in this

report or any other such information or opinions remaining unchanged after the issue thereof.

Certain statements in this document may constitute “forward-looking statements”. All statements other than statements of historical facts including in this document, including, without

limitation, financial position, business strategy, plans and objectives of the managements of Pelindo III on future operations, are forward-looking statements. Such forward-looking

statements involve known and unknown risks, uncertainties and other important factors that could cause actual results, performance or achievements to be materially different from

future results, performance or achievements expresses or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions

regarding Pelindo III, present and future business strategies of Pelindo III and the environment in which Pelindo III will operate in the future.

We expressly disclaim any responsibility or liability (express or implied) of PT Bahana Securities, its affiliated companies and their respective employees and agents whatsoever and

howsoever arising (including, without limitation for any claims, proceedings, action, suits, losses, expenses, damages or costs) which may be brought against or suffered by any

person as a results of acting in reliance upon the whole or any part of the contents of this report and neither PT Bahana Securities, its affiliated companies or their respective

employees or agents accepts liability for any errors, omissions or mis-statements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy

therein or omission there from which might otherwise arise is hereby expresses disclaimed.

The information contained in this report is not be taken as the sole information and recommendation to enter into any agreement with regard to any corporate actions mentioned in this

document. This report is prepared for informational purposes only. This Report is strictly confidential and (save to the extent required by the applicable laws and/or regulations) must

not be released to any third party without our express written consent, which is at our sole discretion.

FINAL REPORT | STRATEGIC REVIEW ON FINANCING STRATEGY OF PELINDO III | 23 DESEMBER 2015

Executive Summary• In line with the Government of Republic of Indonesia plan to promote Indonesia as the Poros Maritim Dunia in 2045 with the Tol Laut Initiatives, PT

Pelabuhan Indonesia III (Persero) (“Pelindo III” or “the Company”) plans to further elevate the quality and capacity of its service through the

improvement of existing ports and development of new ports, which would require a total of IDR 23 trillion throughout 2015 to 2019. According

to the Long Term Corporate Plan (2015 – 2019), the total investment has included Pelindo III’s obligation as one of nation’s agents of development to

establish five terminals in Eastern Indonesia i.e. Maumere, Lembar, Kupang, Bima and Kumai.

• To execute the masterplan, Pelindo III is obliged to conduct proper planning and preparation, including a through and comprehensive study on

financing options feasibility, to ensure governance and optimality of the process and results that are in accordance with the prevailing rules and

regulations.

• Therefore, based on Perjanjian Pemborongan (P2) No. HK.0502/518.1/P.III-2015, Pelindo III has appointed PT Bahana Securities (“Bahana”), along

with PricewaterhouseCoopers Indonesia and BMT Asia Pacific, to act as independent consultants for the Company to the aforementioned study to

assist Pelindo III in achieving its objectives.

• In this report, we performed a comparative analysis between financing options and strategies with regards to the capital expenditure plan, financial

projections and overall conditions of the Company, of which we measure the cost of capital accross various financing instruments, as well as their

corresponding characteristics.

• Pelindo III has been mandated to execute several PSO projects, which may bring low returns to the firm.

• Based on qualitative and quantitative analysis:

• Compared to its global port operator peers, Pelindo III’s financials indicated an overleveraged capital structure of Debt to Equity level of

1.31(x) vs 0.57(x) industry average, and Net Debt to EBITDA level of 2.84(x) vs 1.92(x) industry average.

• Quantitave figures from Financial Covenants Ratio Analysis, shown that under debt financing scenarios, Pelindo III will breach Net

debt/EBITDA covenant of 3.00(x) during FY 2016 due to additional funds required for the capex, hence Pelindo III needs an equity injection for

the total of needed funds or renegotiation of covenants (including obtaining waiver) with loan issuer.

• Equity financing may be obtained through various sources such as shareholder’s equity injection through Penyertaan Modal Negara (PMN), IPO and

extension of existing Joint-Operating Agreement in one of its subsidiaries (PT Terminal Petikemas Surabaya). From the available options, extension

of existing JOA in TPS resulted in moderate level of return to equity holders, considerably low credit risks, immediate availability of funding

and short processing time required.

• Based on incremental FCFE analysis, Joint operate scenario contributes higher NPV than the Self operate scenario.


1Chapter 1

Background & Objective

Chapter 2

Scope of Work2

Chapter 3

Methodology3

4Chapter 4

Economic & Industry Overview

Chapter 5

Pelindo III Existing and Strategic Plan Overview 5

Chapter 6

Financing Alternatives Analysis6

Chapter 7

Equity Financing - Strategic Option of Joint-Operating

Agreement Extension

7

Chapter 8

Financial Analysis – TPS Valuation8

Chapter 9

Conclusion9

Appendix A

BMT ReportA

Appendix B

PwC ReportB

5

7

9

13

27

33

46

51

57

Chapter IBackground and Objectives


• In line with the Government of Republic of Indonesia plan to promote Indonesia as the World Maritime Axis in 2045 with the Sea Toll Initiatives,

PT Pelabuhan Indonesia III (Persero) (“Pelindo III” or “the Company”) plans to further elevate the quality and capacity of its service through the

improvement of existing ports and development of new ports, which would require a total of IDR 23 trillion throughout 2015 to 2019. According

to the Long Term Corporate Plan (2015 – 2019), the total investment has included Pelindo III’s obligation as one of nation’s agents of

development to establish five terminals in Eastern Indonesia i.e. Maumere, Lembar, Kupang, Bima and Kumai.

• To execute the masterplan, Pelindo III is obliged to conduct proper planning and preparation, including a through and comprehensive study on

financing options feasibility, to ensure governance and optimality of the process and results that are in accordance with the prevailing rules and

regulations.

• Therefore, based on Perjanjian Pemborongan (P2) No. HK.0502/518.1/P.III-2015, Pelindo III has appointed PT Bahana Securities (“Bahana”),

along with PricewaterhouseCoopers Indonesia (“PwC”) and BMT Asia Pacific (“BMT”), to act as independent consultants for the Company to the

aforementioned study to assist Pelindo III in achieving its objectives.

Background

6

Chapter IIScope of Work


Scope of Work

8

Strategic Review on Financing Strategy of Pelindo III

Bahana, supported by PwC and BMT, will conduct preliminary study to determine feasible financing alternatives for Pelindo III strategic business plan

2015 – 2019

• To analyze the most optimum financing alternatives in relation with Pelindo III’s capex plan to align with Pelindo III’s strategic objectives

• To perform qualitative analysis among financing alternatives

• To provide analysis on economic outlook, industry and market overview, competitiveness and competition landscape

• To perform technical review in TPS Level including cargo forcast, productivity review; commercial and costing review

• To perform financial modeling in TPS Level

Chapter IIIMethodology


Workflow Overview

10

Qualitative Analysis

Approach Methodology

TPS Financial Analysis

Pelindo III Strategic Rationals

Assumptions used to determine existing condition vs alternative scenarios, including, but not limited to:• Operational Aspect• Technical Aspect• Macro economy,

Industry and Market Aspects

• Strategic Masterplan(2015 – 2019)

• Financial Proforma• Capex requirement• Funding cost &

alternatives• Cost vs Benefits

Analysis

Market overview, competitiveness &

competition landscape

Key technical evaluation points that we will be focusing on :

Cargo Forecasts

What are the current market conditions, existing demand and competitiveness that support the vision of TPS?

What will be the prospective container market potential (throughputs) at TPS in the next Joint-Operating Agreement period?

MasterplanReview

Are the Masterplans proposed by Pelindo III suitable and sufficient for TPS?

Commercial & Costing

What will be the expected tariffs and costs associated with the proposed development and their implications for the Joint-Operating Agreement ?

Equity Debt

SUITABILITYTo Cash Flow Model for Pelindo III

What are the main objectives and issues for Pelindo III?

What is the most optimum financing alternative? Equity or Debt?

• Efficient Cost of Capital• Lower Risk • Improve Firm’s Value

.

VALUE GAPFor Pelindo III

Pelindo III Main Objectives

Financing Alternatives

A

B

Output

Firm Value for Self-Operate

Scenario

Firm Value for Joint-Operate

Scenario


Evaluation Methodology

11

What is the most optimum financing alternative?

What are the current Pelindo III conditions, future growth and expansion

• Review of Existing & Future Financial Conditon Review of Capex Planning How to finance the capex : Debt and Equity (PMN, Bonds,

Loan, IPO, Extension of existing agreement) Financial analysis including industry benchmarking and

financial covenants• Technical Benefits

Productivity Improvement Skill and knowledge sharing Operation Risk sharing

Pelindo III Strategic Rationales

Financial & technical evaluation

• Technical Review Economic Outlook Industry Market overview, competitiveness & competition

landscape Cargo Forecast Commercial & Costing

• Pro’s & Con’s Analysis Termination Cost Posibility Financial & Non Financial Benefit Operation Risk sharing

• Incremental Free Cash Flow Analysis

Equity Financing Requirement and

Feasibility

Debt Financing Requirement and

Feasibility

A B

Financing Alternatives

Self-OperateI

Joint-OperateII

Note :

1. Each scenarios should be covered with legal opinion from independent

legal counsel.

Alternatives:

Our approaches will be consider :

A

B


Evaluation Methodology

12

TPS Financial Analysis TPS Firm Value

Market overview, competitiveness & competition landscape Cargo Forecasts

What are the current market conditions, existing demand and competitiveness that support the vision of TPS?

What will be the prospective container market potential (throughputs) at TPS in the next Joint-Operating Agreement period?

Masterplan Review

Are the Masterplans proposed by Pelindo III suitable and sufficient for TPS

Commercial & Costing

What will be the expected tariffs and costs associated with the proposed development and their implications for the Joint-Operating Agreement ?

• Review of Market Situation Analyze macro-economic conditions Historical review of cargo base volume growth trend Identification of demand drivers and trend

• Port Competitiveness Analysis Strategic Positioning

• Productivity & Capacity Analysis Benchmarking to other local and global container ports

• Review of Forecast Volume The reasonableness of container traffic forecasting provided

by the Joint-Operating Agreement • Propose Alternative Scenarios• Forecasting Modeling & Analysis

• Review of Masterplan Feasibility of the plan – layout, phasing schedule and

development program Capex projection Throughput projection

• Masterplan optimization• Additional development options

• Tariff Review and Forecast• Costs Review and Forecast

B

Chapter IVEconomic & Industry Overview


Global economic outlook – Improving Developed Markets

14

Interest rate expectations in some Asian countries, 2014-16F

Source : Drewry Maritime Research, 2015

• IMF indicates that the developed markets should slightly recover in

2016 while developing-market growth momentum is quite low on weak

commodity prices and expectations of US monetary tightening.

• A slowdown in emerging markets could be tackled by performing

stimulus on both the fiscal and monetary sides. Some countries are

expected to continue monetary easing in 2016, with Indonesia seeing a

75bp cut in its policy rate, based on our forecasts.

• From a trade perspective, sluggish global trade growth may see a slight

improvement next year.

IMF global economic outlook, 2015-2017

Source : Bloomberg, Bahana estimates

Global trade growth, Jan 2007-July 2015

Source : IMF, Bloomberg, Bahana estimates

22.6

-24.6

21.4

-10.0

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15

(%)

CountriesReal GDP CPI C. A. Balance

Old 2015F 2016F Old 2015F 2016F Old 2015F 2016F

World Output 3.3 3.1 3.6 - - - - - -

United States 2.4 2.6 2.8 1.6 0.1 1.1 (2.2) (2.6) (2.9)

Canada 2.4 1.0 1.7 1.9 1.0 1.6 (2.1) (2.9) (2.3)

Euro Area 1.6 1.9 2.0 1.2 0.7 1.5 1.7 2.2 2.0

Germany 1.6 1.2 1.5 0.6 0.2 1.2 (0.9) 8.5 8.0

Japan (0.1) 0.6 1.0 2.7 0.7 0.4 0.5 3.0 3.0

France 0.2 1.2 1.5 0.6 0.1 1.0 (0.9) (0.2) (0.4)

Italy (0.4) 0.8 1.3 0.2 0.2 0.7 1.9 2.0 2.3UK 3.0 2.5 2.2 1.5 0.1 1.5 (5.9) (4.7) (4.3)

Spain 1.4 3.1 2.5 (0.2) (0.3) 0.9 0.8 0.9 1.1

BrazilMexico

0.12.1

(3.0)2.3

(1.0)2.8

6.34.0

8.92.8

6.33.0

(4.4)(1.9)

(4.0)(2.4)

(3.8)(2.0)

China 7.3 6.8 6.3 2.0 1.5 1.8 2.1 3.1 2.8

India 7.3 7.3 7.5 5.9 5.4 5.5 (1.3) (1.4) (1.6)

Indonesia 5.0 4.7 5.1 6.4 6.8 5.4 (3.0) (2.2) (2.1)

Source : Bloomberg, Bahana estimates


Indonesia – Still one of the fastest-growing economies

15

2015F GDP comparison in BRICS-MINT countries


• In line with the central bank’s forecast, we expect 4Q15 GDP growth to

come in at 4.78% (3Q15: 4.73%), and is expected to remain flat in 1Q16.

• Bahana expects 2015 GDP growth at 4.72% in 2015, compared to

consensus projections of 5.0% and the government’s estimate of 5.2%.

Looking at 2016, we expect GDP growth to rise slightly to 5.1%, slightly

lower than the government’s and central bank’s forecasts ranging

between 5.2-5.6%.

• However, even at 5.1% economic growth, Indonesia would still remain as

the third highest next to India’s 7.6% and China’s 6.5%. Growth drivers

include expected government infrastructure project realizations and solid

direct investments.

Forecast of regional GDP growth rates

Source: Bloomberg, Bahana estimates, *Actual; for India 2015-17F = FY16-18F (March year end)

Real GDP growth, 2010-2016F

Source: Statistics Indonesia, Bahana estimatesSource : Bloomberg, Cinsensus Bahana estimates

7.4

6.9

6.2

4.8 4.7

3.5 3.4

2.92.7

2.5

0

1

2

3

4

5

6

7

8

India China Philippines Malaysia Indonesia Taiwan Thailand South Korea Singapore Hong Kong

(%)

Countries1Q15 2Q15 3Q15 4Q15F 1Q16F 2015F 2016F2017F

(%) (%) (%) (%) (%) (%) (%) (%)

India 7.5 7.0 7.4 7.5 7.8 7.4 7.6 8.0

China 7.0 7.0 6.9 6.8 6.7 6.9 6.5 6.3

Philippines 5.2 6.0 7.3 5.9 6.5 6.2 6.3 6.2

Indonesia 4.7 4.7 4.7* 4.8 4.8 4.7 5.1 5.2

Malaysia 5.6 4.6 5.0 4.4 3.9 4.8 5.1 4.8

Thailand 3.0 3.3 3.3 2.9 2.6 3.4 4.0 3.9

Taiwan 3.4 0.6* 3.2 3.5 1.1 3.5 3.5 3.2

South Korea 2.5 2.2* 2.9 3.5 2.8 2.9 3.4 3.4

Singapore 2.8 1.7* 3.0 3.1 2.7 2.7 3.1 3.2

Hong Kong 2.1 2.6 2.3 2.6 2.3 2.5 3.0 2.8

6,8647,288

7,7278,158

8,5688,972

9,4306.22

6.17

6.03

5.58

5.02

4.72

5.10

4.00

4.20

4.40

4.60

4.80

5.00

5.20

5.40

5.60

5.80

6.00

6.20

6.40

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

2010 2011 2012 2013 2014 2015F 2016F

(%)(IDRtn)

Real GDP (LHS) GDP growth (RHS)


International trade: The changing exposure

16

Indonesia’s export-product mix, 2014 vs. 9M15

• Given China’s economic slowdown, Indonesia’s trade structure is

experiencing a change as the country’s exposure to the US is increasing,

while its exposure to Japan and China continues to drop.

• Indonesia’s commodity exports dropped with 9M15 exports of coal as a

percentage of total exports falling to 12.3% (2014: 14.2%) and 11.5% for

CPO (2014: 11.9%). Meanwhile, the mix of textile and textile-export

products rose to 9.3% in 9M15 (2014: 8.8%).

• Imports of electric components and processed foods continued to

increase, while imports of metal-based products continued to drop amid

lower investment growth in 2015. Going forward, we expect this change

in trade structure to remain.

Change in trade partners, indexed, Jan 2013–Sept 2015

Source: Bloomberg

Indonesia’s import product mix, 2014 vs. 9M15

Source: Bloomberg, Bahana estimatesSource : Bloomberg, Bahana estimates

12.3%

11.5%

9.3%

7.8%

6.6%5.8%

4.5%

4.5%

3.3%2.8%

31.5%

Coal

Palm oils

Textile and textile products

Other manufacture products

Electrical apparatus, measuringinstruments and optical

Base metal products

Processed rubber

Processed food

Footwear

Processed wood products

Others

9M15

14.2%

11.9%

8.8%

8.6%

6.9%6.2%

4.3%

4.8%2.8%

1.4%

30.0%

Coal

Palm oils


Other manufacture products

Electrical apparatus, measuringinstruments and optical

Base metal products

Processed food

Processed rubber

Footwear

Articles of gold

Others

2014

76.8

111.9

93.8

94.5

75

80

85

90

95

100

105

110

115

(%)

China Japan United States EU Singapore

14.4%

12.7%

6.9%

6.2%

6.1%

5.4%3.3%2.8%

2.4%2.1%

37.7%

Electrical apparatus, measuring instruments and optical

Base metal products

Chemicals

Artificial resin, plastic materials


Other agricultural products

Processed food

Parts of vehicles

Cattle fodder

Motor vehicle 4 wheels and more

Others

9M15

14.1%

13.6%

7.2%

6.2%

5.6%

5.5%3.4%

2.8%

2.6%

2.6%

36.5%

Electrical apparatus, measuring instrumentsand optical

Base metal products

Chemicals




Processed food

Parts of vehicles

Cattle fodder


others

2014

14.4%

12.7%

6.9%

6.2%

6.1%

5.4%3.3%2.8%

2.4%2.1%

37.7%

Electrical apparatus, measuring instruments and optical

Base metal products

Chemicals




Processed food

Parts of vehicles

Cattle fodder


Others

9M15

14.1%

13.6%

7.2%

6.2%

5.6%

5.5%3.4%

2.8%

2.6%

2.6%

36.5%

Electrical apparatus, measuring instrumentsand optical

Base metal products

Chemicals




Processed food

Parts of vehicles

Cattle fodder


others

2014


Overview of the global port sector

17

Global Container Throughput 2004 - 2014


Global container throughput increased at a 6.4% CAGR in the last decade (2004-2014). It has been growing steadily barring in 2009, when the global economy crashed.

• A strong correlation exists between economic development and growth

and contrainer traffic growth. Throughout the years, the growth in

container traffic has consistently outperformed economic growth, more

so in the developing economy, as indicated by the historical relationship

between real GDP and global container shipping volume.

• In the past decade, global trade has expanded substantially with CAGR

growth of 3.8% throughout 2005 – 2013.

• Asia accounts for the largest proportion of global maritime trade, mainly

contributed from rapid increase in China and Southeast asia as the new

and alternate manufacturing centers.

Global trade (in million tonnes; CAGR 2005 – 2013)

Source : UCTAD 2013, Drewry Maritime Advisors

Global container trade increased at 5.8% CAGR during 2005 – 2013.

Global maritime trade market share

Asia accounts for 38.7% of exports and 49.4% of imports in the global maritime trade share.



Regional sea transport industry

18

Logistic Costs – GDP Ratio in 2014

South East Asia Container Port Utilization, 2011 - 2017

Source : www.pp3.co.id

Source : Drewry Maritime Advisor

South East Asia Container Port Demand

Source : Drewry Maritime Advisor

• South East Asia container port demand is expected to grow with CAGR

5.7% from 2012 to 2017.

• In line with demand growth, container port utilization is also projected to

increase from around 100,000 to 120,000 thousand TEU (reach almost

90% capacity) which indicates requirement for new capacity in 2017.

• Logistic costs to GDP ratio in Indonesia is the highest (27%) among

regional countries, due to long turn around, inefficient handling and

small scale ships that connect domestic hubs which cause higher

working capital.

South East Asia Container Port Demand


Indonesia sea transport positioning

19

Indonesian port logistics competence (2014)

Source: Worldbank

• Indonesia improved its connectivity index in the Global Competitiveness

Index from 104th rank in 2012 from 77th rank in 2014.

• Indonesia ranked 53rd in Worldbank 2014 Logistics Performance Index,

far below its peers with Singapore, Malaysia and Thailand ranked 5th,

25th and 35th consecutively. Indonesia is still lacking in terms of

Infrastructure, Customs, International Shipments, Tracking & tracing,

and Timeliness. However, in terms of Logistics competence, Indonesia

is almost on-par with Thailand and Malaysia.

• Growth of container trade in Indonesia outpaced that of Southeast Asia

and the rest of the world with share of container port throughput in

Southeast Asia increased from 12.6% in 2004 to 15.3% in 2014.

Improving Sea Transport Position in Global Competitiveness Index

Source: Worldbank

Comparative position of Indonesia in SEA (2004 – 2014)

Source: Drewry Maritime Research


Indonesia sea transport industry

20

Indonesian container port throughput, 2004 - 2014

Indonesia vs region and the world

Source : Drewry Maritime Research

Loading Unloading of International Cargo at Indonesian Ports

25,000

125,000

225,000

325,000

425,000

525,000

625,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Internasional Unloaded Internasional Loaded

Source : Sea Transportation Statistics 2014

Thousand

of Tons

Source : Drewry Maritime Research

• International cargo unloaded at Indonesian Ports growth remained flat

for the past years, while cargo loaded experienced steep growth

during 2010 – 2013 before it declined in 2014.

• The combined container port throughput increased at CAGR of 8%

from 6.6 mteu in 2004 to 14.2 mteu in 2014. It had been steadily

increasing before slowing down in 2014, for both domestic and

international volume on the back of cut in fuel subsidy that drives down

domestic demand and slowing world economies.

• The Indonesian container throughput of 14.2 mteu in 2014 was mainly

generated by two ports: Tanjung Priok in Jakarta (Pelindo II) and

Tanjung Perak in Surabaya (Pelindo III).


Indonesia strategic ports traffic

21

• The loading volume of inter-island cargo in 25 strategic ports in 2014

increased by 16.8% compared to the year 2013 while unloading

volume increased by 13.74% in the same year.

• Average growth rate per year 2010 -1014 production of

loading unloading in quay managed by Indonesia Ports Corporation I –

IV for unit decreased by -9.8%. (2014 without IPC II due to unavalable

data).

• Eventough for production of container tend to decrease over 2010

– 2014 by –8,23%, Pelindo III had experienced positive growth from 2.6

Mio Teus in 2010 to 4.3 Mio Teus in 2014.

Loading Unloading of Inter-Island Cargo at Indonesian Ports

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Inter-Island Unloaded Inter-Island Loaded

Thousand

of Tons

Source : Sea Transportation Statistics 2014

Production of Loading/Unloading in Quay Managed by IPC I - IV

Production of Container Handling by Terminal Yard on IPC I - IV

2012 2013 2014

Source : Ministry of Transportation Statistic 2014

Thousand

of Tons/m3

Thousand

of TEUS

119.630 133.170 133.393 152.075

103.830 92.092 73.29176.819

132.199 124.844

72.780

96.754 80.643

73.808

69.817

129.638

94.691

138.210

93.894

2011

456.433

2010

452.413

-9,86%

Pelindo IV

Pelindo II

353.272

Pelindo III

430.749

298.711

Pelindo I

Pelindo III

Pelindo IV

3.940

1.305

2011

11.164

1.335

2012 2013 2014

Source : Ministry of Transportation Statistic 2014

11.747

1.590

8.927

1.733

4.131

1.7285.3904.911

1.794

Pelindo I

-8,23%

7.552

1.350

4.338

1.421

2.950

Pelindo II

1.474

2010

10.651

1.280

2.666

5.229

1.474


Pelindo III - Tanjung Perak terminals

22

• Throughput of Tanjung Perak is expected to reach 4.2 million TEUs in

2020 and 9.7 million TEUs in 2030. on the back of growing domestic

demand

• There are 5 key container terminals of Tanjung Perak, namely:

TPS (international and domestic; international concentrated)

BJTI (international and domestic; domestic concentrated)

Jamrud & Mirah (solely domestic)

Nilam (solely domestic), and

Lamong (international and domestic).

• Currently, TPS is the dominant container terminal at Tanjung Perak,

accounting for a steady 90% of total international container throughput

of Tanjung Perak. With the new Lamong Terminal into operation in

2017, the market share of TPS is expected to be diluted.

Shares of International Trade at Key Terminals of Tanjung Perak

Shares of Domestic Trade at Key Terminals of Tanjung Perak

2012 2013 2014

Source : DPW Traffic Data for 2007 to 2014, BMT Analysis

Source : DPW Traffic Data for 2007 to 2014, BMT Analysis

TanTanjung Perak Throughput Forecast

Source : BMT Estimates


TPS productivity benchmarking

23

Terminal Area Productivity of Global Ports

Yard Crane Productivity of Global Ports

Source : BMT Analysis

TanQuay Crane Productivity of Global Ports

Berth Length Productivity of Global Ports



The productivity of TPS is considered above average by international standards, and can be ranked as “2nd Tier” among the

global container ports. TPS is less productive compared to the “1st Tier” ports / terminals located in the world-class container

ports.



National Port Development Plan 2015 - 2019

24

National Development Plan 2015 – 201924 Seaports Capacity Development

Source: Ministry of Transportation 2015, Indonesia Port Development and Expansion Plans 2015

Port development by operator

• Within the National Port Development Plan

2015-2019, as part of the Sea Toll Road

Program Initiative, Pelindo III is mandated

to develop 4 out of 24 seaports

development: Tanjung Perak, Tanjung

Emas, Banjarmasin and Tenau Kupang


In line with Jokowi‟s priority agenda, Nawa Cita, sea

connectivity initiatives is a key in responding to

challenges of economic globalization and moving the

strategic sectors of domestic economy (point 6 and 7).

President Joko “Jokowi” Widodo‟s vision to develop a

modern transport system, known as “maritime highways”,

is beginning to materialize in Indonesia. New freight

transport services are being introduced and existing

services are being intensified and improved. Also the

national port system is being improved.

The Government‟s programme for the development of 24

commercial ports, over 1,000 non-commercial ports and

the procurement of vessels between 2015 and 2019

requires US$55.4 billion.

The integrated programme of the Government is expected

to reduce logistics costs from 23.5 percent of the Gross

Domestic Product (GDP) in 2014 to 19.2 percent in 2019.

Source : State of Logistics Indonesia 2015, kpu.go.id

1. Protect the nation and provide security to all citizens, through free and active foreign policy,

trusted national security and development of integrated national defense Tri Matra and

strengthen its identity as a maritime nation.

2. Building a fine, effective, democratic and reliable governance, by giving priority to restoration

of public confidence in democratic institutions by continuing the consolidation of democracy

through party system reformation, elections, and representative institutions.

3. Building Indonesia from the periphery to strengthen the regions within the framework of a

unitary state.

4. Rejecting weak states by reforming the system as well as corruption-free, dignified, and

reliable law enforcement.

5. Improve the quality of human life in Indonesia by enhancing the quality of education and

training programs named "Indonesia Pintar"; as well as the improvement of social welfare

programs "Indonesia Work" and "Prosperous Indonesia" by promoting land reform and land

ownership program covering 9 hectares, the village home program or a series of affordable

subsidized flats and social security for citizens in 2019.

6. Improve citizens’ productivity and competitiveness in international market, thus

Indonesian can move forward and rise together with other Asian nations.

7. Realization of economic independence by moving the strategic sectors of the

domestic economy.

8. Revolutionizing the character of the nation, through realignment policy of national education

curriculum with advanced civic education, which proportionally puts education aspects, such

as education regarding the history of the nation formation, the values of patriotism and love

of the country, the spirit of defending the country and the character in Indonesia educational

curriculum.

9. Strengthen diversity and Indonesia social restoration through the policy of strengthening

education for diversity and create spaces of dialogue between citizens.

President Jokowi’s 9 Priority Agenda : Nawa Cita

Nawa Cita

26


Coast River

Train

Sea Connectivity InitiativesSea Toll Concept Shipping Industry

Shipping Industry

• Maritime Education• Ship Design• Specialized Ship

Yards• Advanced Ship

Equipment• Ports and Terminals• Shipping

Management• Shipping Brokers• Maritime IT• Maritime R&D

• Offshore Oil and Gas Industry

• Maritime Policies• Human Resources

Services• Logistics Systems• Environmental

Standards• Shipping

Classification Services

• Shipping Insurance• Shipping Finance• Efficient Fisheries

Effective Inland Access

Land Pipe

Sea Toll is the effective sea connectivity in the form of ships that sail regularly and scheduled

from west to east Indonesia

Passengerand Cruise

Sea Toll

Specialty Services

Cruise : Traveling

and Leisure

IntegratedTransport

TouristsDestinations

and Commercial

Container Sea Toll

Reliable PortRoutine and Scheduled Shipping

Shipping Industry

Effective InlandAccess

Load Adequacy

(west to east – east to

west)

Installed Capacity

Productivity

Effective Documentation

Data and System Information

Water Entrance – Inland Transport

Supporting Institution

Route

Size

Window System

Inaport Net

Reliable Port Routine and Scheduled Shipping

27

Source : Company

Chapter VPelindo III Existing and Strategic Plan Overview


Key growth strategies

28

• Configuration of the port to enable each

terminal to handle specialised cargo

− Eliminated the needs to change

equipment when servicing different

cargo types

− Dedicated terminals concentrating

expertise of different cargo types

• Clustering focused on the larger ports

− Tanjung Perak – in progress

− Tanjung Emas – in progress

− Banjarmasin – in progress

− Benoa – in progress

− Kupang – planned

• Modernization of port equipment

increases the handling capacity and

efficiency, improve turn around time and

safety of the terminals

− Modern equipment by means of

automation is being introduced at key

ports, including European environmental

friendly technology

− Existing types of equipment used to

increase capacity of smaller ports and

test demand in new markets

• Renovation / upgrading of existing ports

− Upgrading of Benoa, Bali cruise terminal

− Upgrading of Tanjung Wangi, Marina

Boom

• Services at existing branches

− Providing containers, liquid and dry bulk

services at each branch

− Establishing LNG terminals – started in

Benoa, December 2015

• New facilities

− JIIPE industrial and residential estate /

Manyar multipurpose terminal – in

operation January, 2016

− Expanding existing terminals and

container yards

− Gilimas Cruise Terminal in Lombok, West

Nusa Tenggara

Clustering of Services Port Modernization Expansion

Source : Company


Pelindo III Operational Area

29

Pelindo III

operates the 2nd, 5th

and 6th out of the 6

biggest ports in

Indonesia

Port (TEUs

millions)

Tanjung Priok PII 5,7

Tanjung Perak PIII 3,1

Belawan PI 0,9

Makassar PIV 0,6

Tanjung Emas PIII 0,5

Banjarmasin PIII 0,4

2

5

6

Tanjung Perak Tanjung Emas BanjarmasinA B C

Including TPS / Berlian / Nilam / Teluk Lamong

[73%]

[63%]

Including TPKS / Nusantara / Samudra

[12%]

[13%]

Including TPKB / Martapura / Trisakti

[10%]

[8%]

Terminals:

% of 2014 container traffic:

% of 2014 net revenue:

Main and major branches

5

6

3

Source : Company


Port Modernization: immediate improvements

30

Capacity Improvement

Handling Efficiency

Improvement

Turn Around Time

Improvement

1

2

3

• Dredging the harbor pool

• Shipping channel and route revitalization

• Container yard expansion (CY)

• Automated Rubber Tyred Gantry (RTG), Container Crane and

Reach Stacker units addition

• Interconnectivity with railway system

• Extension of pier/jetty length

• Reclamation and rezoning

• Development of Pier and Terminal

• 24/7 operational service

• Readiness of assistance service facility (scouting and delay)

• Priority bollard provision for window ships

How much

does it cost

to increase

capacity ?

Fundamental Focus Areas Immediate Improvements

Source : Company


No Company 2015 2016 2017 2018 2019TOTAL

INVESTMENT2015 - 2019

A. Holding Company

1 Kantor Pusat 514.548 1.265.260 979.800 10.250 4.500 2.774.358

Proyek Teluk Lamong 998.300 1.217.350 372.044 123.044 510.777 3.221.516

Proyek APBS 721.600 103.200 - - - 824.800

2 Tanjung Perak 307.826 570.944 463.900 298.300 94.000 1.734.970

3 Banjarmasin 381.057 97.895 69.238 72.013 74.300 694.502

4 Tanjung Emas 87.370 80.490 23.000 32.550 298.700 522.110

5 Gresik 49.657 14.825 4.000 4.000 20.000 92.482

6 Kotabaru 45.713 98.200 91.600 24.000 28.500 288.013

7 Tanjung Intan 18.158 93.800 54.500 54.900 44.500 265.858

8 Tenau Kupang* 33.730 164.560 232.800 23.800 52.000 506.890

9 Benoa 86.475 103.715 497.956 753.985 811.280 2.253.411

10 Sampit 22.740 30.500 112.158 40.750 50.750 256.898

11 Tanjung Wangi 37.400 132.350 97.800 72.500 30.000 370.050

12 Kumai* 31.200 28.345 47.500 42.500 42.500 192.045

13 Lembar* 58.150 75.052 266.544 155.875 152.750 708.371

14 Probolinggo 2.224 1.475 50.000 36.000 27.003 116.702

15 Bima* 14.050 50.625 71.600 17.255 6.650 160.180

16 Celukan Bawang 61.668 75.775 264.000 274.000 343.500 1.018.943

17 Maumere* 28.600 111.750 50.377 12.328 13.374 216.429

18 TPKS 658.742 359.015 197.000 270.000 270.000 1.754.757 Total Investment –Holding Company

4.159.206 4.675.126 3.945.816 2.318.050 2.875.084 17.973.283

B. Subsidiary

1 TTL 26.398 12.015 - - - 38.413

2 PHC 19.722 13.494 25.500 28.250 37.250 124.216

3 TPS 313.217 547.271 786.084 663.028 742.105 3.051.705

4 BJTI 738.630 381.285 322.011 234.180 249.340 1.925.445

5 PMS 56.736 34.280 47.500 44.500 56.500 239.516

6 PDS 698 1.000 1.000 1.000 1.000 4.698 Totak Investment -

Subsidiary1.155.400 989.345 1.182.095 970.958 1.086.195 5.383.993

GRAND TOTAL INVESTMENT

5.314.606 5.664.472 5.127.911 3.289.008 3.961.279 23.357.276

Capex Plan

31

Investment Costs

Source: RJPP Pelindo III (2015 – 2019)

• By 2019, Pelindo III targeted IDR 23,35 trillion total

investment attributable to the development of ports

under both holding company and subsidiaries.

• In line with the Government’s National Development

Port Plan and the Tol Laut initiative, Pelindo III is set

to develop 4 ports out of the 24 planned ports i.e.

Tanjung Perak, Tanjung Emas, Banjarmasin and

Tenau Kupang.

Eastern Indonesia Development

• Pelindo III was tasked to develop five terminals*

namely Maumere, Lembar, Kupang, Bima and Kumai

– in the effort to support the development of transport

infrastructure in eastern Indonesia, which would

require a total of IDR 1,8 trillion financing

arrangement to finance the development.

In million IDR

Financing ArrangementIn order to get the most optimum financing arrangement

to finance the capex requirement, Pelindo III shall

ensure the following:

• Efficient cost of capital

• Lower risk

• Firm’s value improvement


Existing Capital Structure

32

Optimal capital structure will create maximum

firm value

Industry mapping (x) 2014

Source: Aswath Damodaran

• Higher level of debt creates higher risk exposure and increases

firm’s cost of capital, which drives down firm’s value

• However, lower level of debt creates higher portion of equity

(cost of equity = cost of capital) hence firm’s value also tends to

decrease

• Pelindo III Debt to Equity ratio of 1.31x is well above the industry

average level of 0.57x which indicates overlevered capital

structure of the firm

• “The ‘safest’ place for any firm to be is close to the industry

average” – Aswath Damodaran, 2015

Underlevered OverleveredSource: Bloomberg, Pelindo III Audited FS 2014

*estimated figures Q1 2015

ICT INTL CONTAINER TERM SVCS INC

ATI ASIAN TERMINALS INC

NWS NWS HOLDINGS

NP NINGBO PORT CO LTD-A

SCW SHENZHEN CHIWAN WHARF HLDG-B

JP JINZHOU PORT CO LTD-B

AP ADANI PORTS AND SPECIAL ECON

CP COSCO PACIFIC LTD

HPH HUTCHISON WHAMPOA LTD

POT PORT OF TAURANGA LTD

HHL HAMBURGER HAFEN UND LOGISTIK

DPW DP WORLD LTD

WS WILSON SONS LTD-BDR

PSI MPA SINGAPORE

P II* PELINDO II

P III* PELINDO III

ICT INTL CONTAINER TERM SVCS INC

ATI ASIAN TERMINALS INC

NWS NWS HOLDINGS

NP NINGBO PORT CO LTD-A

SCW SHENZHEN CHIWAN WHARF HLDG-B

JP JINZHOU PORT CO LTD-B

AP ADANI PORTS AND SPECIAL ECON

CP COSCO PACIFIC LTD

HPH HUTCHISON WHAMPOA LTD

POT PORT OF TAURANGA LTD

HHL HAMBURGER HAFEN UND LOGISTIK

DPW DP WORLD LTD

WS WILSON SONS LTD-BDR

PSI MPA SINGAPORE

P II* PELINDO II

P III* PELINDO III

Chapter VIFinancing Alternatives Analysis


Financing method: Debt vs EquityAdvantages Disadvantages

Debt

Equity

• Tax Benefit: Interest expenses on debt are tax deductible but cash flows

to equity are generally not

Implication: The higher the marginal tax rate, the greater the benefits of

debt

• Added Discipline: Borrowing money may force managers to think about

the consequences of the investments decisions a little more carefully and

reduce bad investments.

• Relatively low and limited control via restrictions from lenders / debt

holders

• Controllable period: Debt can be short term or long term and business

relationship ends once repayment is made.

• Higher cash flow exposure for debt service

• Currency risk

• Collateral requirement

• Expected Bankruptcy Cost: The expected cost of going bankrupt is a

product of the probability of going bankrupt and the cost of going bankrupt.

The probability will be higher in businesses with more volatile earnings.

• Agency Costs: Actions that benefit equity investors may hurt lenders. The

greater the potential for this conflict of interest, the greater the cost borne by

the borrower (as higher interest rates or more covenants)

• Loss of Flexibility of using up available debt capacity today vs in the future.

Implication: (i) Firms that can forecast future funding needs better should be

able to borrow more (ii) Firms with better access to capital markets should be

more willing to borrow more today.

• Less risk exposures to cash flow for debt service, currency, collateral

• Lower bankruptcy risk: No requirement to pay back the investment

• Added credibility: taping into Investor’s networks (public/private and

strategic)

• Synergical value integration from strategic equity investor

• No Tax Benefit from the tax deductible interest expenses of debt

instruments

• Lost of ownership control (voting rights): equity investor will have

voting rights in the firm’s decision making process

• Lost of percentage of profits

35


Comparison among instruments

• Capacity • Allows large issuance

size (capacity quite high,

USD500 mn – 1bn)

• Up to 100% of the debt

• Limited capacity

• up to 100% of the debt,

subject to eligibility criteria

• Unlimited, depending on

negotiation and ownership

portion threshold

• Unlimited, depending on capital structure

goals & control appetite of existing

shareholders

• minimum 20% free float

• Tenor • Longer tenors, allows

Issuer to strengthen capital

• Unlikely > 10 yr

• Payment of Principal is done

throughout the life of the loan

• Max repayment of 10 years

following OECD guidelines

• No maximum period, unless

otherwise agreed e.g. Period

of Joint-cooperating

agreement

• No maximum period

• Terms &

Pricing

• 5Y rate: ~3.6%*

10Y rate: ~4.9%*

20Y rate: ~6.5%*

• Depend on benchmark with

same tenor (US treasury)

• Fixed Coupon rate, no

provision costs

• 7Y rate: ~5%

• Relatively hard to secure

fixed interest rate level

• During rising inflation levels,

loan interest rates tend to be

more expensive than bond

coupon payments

• Better terms & pricing of

financing compared with

traditional financing

• Varied, depending on

negotiation and agreement

between parties

• Price may depend upon equity

premium level of the strategic

investor

• Based on bookbuilding (market’s appetite

and sentiment)

• Processing

time

• Around 3-4 months for

Bonds, using audited

financial statement

• Complicated procedure and

documentatons

• Relatively faster process

(Decision on size of loan and

interest rate charged is done

internally within the Bank)

• Easier negotiation on

structure (with 1 Party)

• Around 3-5 months

• Relatively less complicated

compared to bond issuance

• Less complicated,

depending on parties involved

in the financing structures

• Around 3-4 months, using audited financial

statement

• Complicated procedure and documentatons

• Covenants • In general does not

required complicated and

restrictive Covenants

• Complicated and restrictive

loan covenants

• Tailor-made covenants • Tailor-made covenants • N/A, but several initial requirements need

to be fulfilled prior to listing

• Other Benefit • Increase of Pelindo III

credibility towards capital

market investors

• New funding source from

Banks

• Match of capex funding

diversification against foreign

funding sources

• No debt service obligations

(interest and repayment)

• Increase of Pelindo III credibility towards

capital market investors

• Other

Consideration

• Costs related to Issuance

of Instruments (professional

supporting parties, etc)

• Not all banks would have

appetite for port and

infrastructure financing

• Need to match sourcing • Synergical values from

strategic partner

• Depending on the structure,

may cause less ownership

control

• Less ownership control - shifting from

Gov control of nation’s strategic area to

Public control

• Dividend policy

• Mandatory disclosure, listing and

maintenance costs, accounting reporting

adjustments, and other capital market

requirements

• Costs related to Issuance of Instruments

(professional supporting parties, etc)

Global Bond Commercial Bank Loan ECA General Equity Financing IPO

36

* Bloomberg as of December 2015Debt Financing Alternative

Equity Financing Alternative


Framework for structuring financing instrument

36

Source: Aswath Damodaran, 2015

* subject to prevailing corporate law and other binding agreements (e.g. Shareholders Agreement)

The suitable financing

instrument will:

• Satisfy the optimal

capital structure

level

• Have all of the tax

advantages of debt

• While preserving

the flexibility

offered by equity

Cash flow on asset/project and firm’s financial capacity analysis

DurationCurrency

Risk Exposure

Effect on Inflation /

Uncertainties

Business Cyclicality

Internal financial

and operational

Debt financing characteristics

Equity financing characteristics

CertainTenor/

Maturity

Currency Mix

Fixed or Floating Rate Sensitive

Match Match*Match

• We can narrow down the suitable financing instrument by considering aspects of currency risk

exposure, duration, effect on uncertainties, growth pattern and internal financial and operational

capacity.

Specific covenants

Match Match

Existing Capital

Structure


Cost of Capital Benchmarking

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

2006 20122000 2016F 2018F2010 20142004 2020F1998 2002 2008

Debt Holder Return 4,72%

+12,43%

Bond Holder Return 5,55%

Equity Return 7,44%

Historical Cost of Equity (1999 – 2019F) Vs Cost of Debt

USD 000

IHSG

Global Bond

Commercial Loan

Equity

• To conduct comparative cost of capital analysis, we

use historical data transaction ( USD 173 Mio Up

Front Fee paid by strategic investor) in 1999 and

actual dividends paid by TPS until 2014 and

estimated dividends paid 2015 through 2019.

• Furthermore, we analyze the amount of Up-front

Fee if funded by commercial loans and bonds.

• Then we calculate investor’s returns by taking into

account the time value of money over 20 years.

• These returns are then compared with the average

return of IHSG over 17 years to see the possibility

of Capital Market Investor.

• Equity financing showed more flexibility to

business condition and has moderate cost of

capital in between of debt financing and

expected return of capital market investors

which reflected in IHSG.

• Considering overleveraged condition of Pelindo

III, equity financing is a reasonable option to

finance Pelindo III capex plan in addition to

share the risk operation in TPS.

Equity Financing : Termination Cost Payment

Debt Financing (Bond) : Principle Payment

Source: Bank Indonesia publication, RJPP 2015-2019 and IPC global bond.

INDEX

38

Type of Financing Interest Rate USD Return/Yield/IRR

Commercial Loan (Tenor 10 Yr) 5.00% 4.72%

Bond (Tenor 20 Yr) 6.50% 6.72%

Equity Financing (Paid Up Up Front Fee in 1999) n/a 7.44%

IHSG Benchmarking n/a 12.43%


Optimal capital structure waterfall

38

Source: Aswath Damodaran, 2015

* We do not perform analysis on Pelindo III’s projects feasibility

Is the actual debt ratio greater than or lesser than the optimal debt ratio?

Actual > Optimal

Overlevered

Actual < Optimal

Underlevered

Actual Pelindo III = D/E 1.3x

Debt/EBITDA 2.84x

Optimal (industry) = D/E 0.57x

Debt/EBITDA 1.92x

Is the firm under bankrupty threat?

Yes No

Reduce Debt Quickly

1. Debt/equity swap

2. Sell Assets; use cash to

pay off debt

3. Renegotiate with lenders

Feasibility of firm’s

projects? Are the:

1. ROE > Cost of Equity?

2. IRR > Cost of Capital?

Is the firm a takeover target?

Yes No

Increase Leverage Quickly

1. Debt/equity swap

2. Borrow money & buy

shares

Feasibility of firm’s

projects? Are the:

1. ROE > Cost of Equity?

2. IRR > Cost of Capital?

Yes

Take feasible projects

with new equity or with

retained earnings

No

1. Pay off debt with retained earnings

2. Reduce or eliminate dividens

3. Issue new equity (via PMN or

Strategic Partnership)

Yes

Take feasible projects

with new equity or with

retained earnings

No

Do your stockholders like

dividends?

Yes

Pay dividends

No

Buyback stock

Pelindo III has been mandated to serve

several Public Service Obligations

(PSO), which may not always bring

positive return to the firm*


Pelindo III Debt vs Equity Analysis – General Assumptions

39

• During 2014 – 2019, Management of Pelindo III viewed that the

company requires a total of IDR 23.4 trillion investment for the

development of Pelindo III and its subsidiaries, including PT Terminal

Petikemas Surabaya (“TPS”), which splits into USD and IDR with

proportion of 47.1% and 52.9% respectively. This proportion is

calculated from capex data in the company’s 2016 annual budget plan

(RKAP) and we use this as a proportion reference for the remaining

projected years.

• In its approved 5 years long term plan, Management of Pelindo III

forecasts the need of a total of additional IDR 8.5 trillion in order to

finance the capex until the end of contract period in 2019. Pelindo III

then divided the financing into two phases:

• We performed financial covenants analysis based on RJPP for Pelindo

III provided by Management until FY2019 to analyse whether the

covenants will be breached if the additional financing is derived from

bank loan or bond. We did not perform any review on projection

assumption in RJPP.

Financial Ratio Covenants Analysis in Pelindo III

2015 F 2016 F 2017 F 2018 F 2019 F

Loan withdrawn

(IDR million) - 4,000,000 4,500,000 - -

Ref: Appendix B - page 24-25

• Below are the four financing alternatives based on the source

of financing with their respective currencies as follows:

• The total additional loan raised for all scenarios is IDR 8.5

trillion.

• Below are the details of interest rate we assume for each

source of financing:

• Following RJPP, no loan repayment is assumed in all scenarios

for period 2015-2019.


Scenarios USD IDR

Scenario 1 Global Bond Corporate Bond

Scenario 2 Global Bond Commercial loan

Scenario 3 Commercial Loan Corporate Bond

Scenario 4 Commercial Loan Commercial loan

Interest rates USD IDR Source

1 . Corporate Bond N.A. 1 0.0%Av erage interest from

comparable companies bond

2. Global Bond 5.4% N.A.Pelindo II Global Bond interest

benchmark

3 . Commercial Loan 4.99% 1 1 .5%Av erage interest from

commercial banks


Financial Sustainability

40

List of existing interest bearing liabilities at

Pelindo III level according Management and

RJPP 2015-2019

− Export Credit Agency (“ECA”)

• Facility A: USD 62,913,953

• Facility B: USD 58,327,918

• Total facility of USD 121,241,871

− Global bond


− Leverage: Net debt/EBITDA

• maximum of 3.00 x (refer to ECA agreement page 52 and

ECA amendment page 4)

− Gearing: Net debt/equity

• maximum of 2.00 x (refer to ECA agreement page 53)

− Interest coverage: EBITDA/Debt service

• minimum of 3.00 x (refer to ECA agreement page 52)

− Debt service coverage: EBITDA/Finance charges

and scheduled repayments of borrowings


Pelindo III’s current global bond does not have financial

ratio covenants.

In order to maintain financial sustainability and resilient balance sheet, Pelindo III needs to manage its debt on

a healthy level in accordance with the existing financial policy and covenants.

ECA Financial Covenants

Global bond Financial Covenants

Ref: Appendix B - page 26


Financial Covenants

41

Scenario 1: Global bond (USD) and Corporate bond (IDR)



Financial Covenants

42

Scenario 2: Global bond (USD) and Commercial loan (IDR)



Financial Covenants

43

Scenario 3: Commercial loan (USD) and Corporate bond (IDR)



Financial Covenants

44

Scenario 4: Commercial loan (USD and IDR)



Covenants Summary – Debt Financing Scenario

45

ECA financial covenants breach summary

Leverage:

Net Debt/

EBITDA

Gearing:

Net Debt/

Equity

Interest

coverage

Debt service

coverage

Scenario 1: Global bond (USD) and Corporate bond

(IDR) Yes No No No

Scenario 2: Global bond (USD) and Commercial loan

(IDR) Yes No No No

Scenario 3: Commercial loan (USD) and Corporate

bond (IDR) Yes No No No

Scenario 4: Commercial loan (USD and IDR) Yes No No No

Source: RJPP and PwC analysis

• It is evident from the table above that under all debt fnancing

scenarios, Pelindo III will breach Net debt/EBITDA covenant during

FY 2016 due to additional funds required for the capex.

• As we have not done a monthly calculation, we do not analyse the

date or month when the covenants will be breached. If

Management could not raise the financing timely, Management

needs to manage the cash flow (e.g. by delaying capex, cost

efficiency, etc.).

• This covenant will also be breached if no additional debt is

raised and capex is reduced. Net debt/EBITDA ratio also

indicates the financial performance of the company. The high level

of Net debt/EBITDA of Pelindo III shows the company has weak

financial performance, thus it is important for Pelindo III to be able

to manage this ratio.


• This indicates that, in the debt financing scenario, Pelindo III

needs an equity injection (e.g. through Penyertaan Modal

Negara/PMN/ Government equity injection) for the total of

needed funds or renegotiation of covenants (including

obtaining waiver) with loan issuer.

• Other possible scenario to raise financing (partly) is by continuing

the joint operation agreement which assumed the upfront fee to be

received in 2016.

Chapter VIIEquity Financing -Strategic Option of Joint-Operating Agreement Extension


47

A B

Pelindo III will not

continue the existing

agreement with DPW

and operate themselves

from 2019 onwards.

Self operate Joint operate

Pelindo III will have a

new agreement from

2019 onwards.

• These scenarios have not considered managing political and/or regulatory

approvals aspects, but strictly on commercial basis.

• Each scenarios should be covered with legal opinion from independent legal

counsel.

2015 2019 2039

Self-Operate

ASelf Operate

TPS

(joint-operate with DPW)

2015 2019

Joint-Operate

B

2039

Existing / New Agreement(joint-operate with existing / new

partner)

Strategic OptionsWe examine two strategic options: Self Operate and Joint Operate scenarios. In Self Operate, it is assumed that Pelindo III will not

extend its JOA of TPS with Dubai Port World (“DPW”) which is to expire in 2019. In Joint Operate, Pelindo III will continue to joint

operate in 2019.


Option A: Self Operate

48

Pros

• Avoid paying equity returns to

international operator after 2019 (but

this only applies if Pelindo III believes

international operator would not

deliver better financial performance);

• Full control of dividend disbursement.

Cons

• High transaction costs (repurchase of

fixed assets from TPS);

• No external investor to fund the

capex. Issues whether Pelindo III’s

own cash flow enough to finance the

capex or Pelindo III need to find

external source of fund, such as loans

or bonds (involves interest payment);

• Possible debt covenant issues of raise

financing from third parties (subject to

bank loan, bond agreements and

other contractual agreements

• Pelindo III remains exposed to full

commercial risk.



Option B: Joint-Operate (1/2)

49

Pros

• Avoid buyback costs (repurchase of

fixed assets from TPS);

• Financial commitment to ensure

strong financial capacity of Pelindo III

to fulfil capex plan requirement;

• Benefit of a contract with a global

operator;

• Availability of fund: obtain the upfront

fee to finance the capex;

• Pelindo III is partly protected from

commercial risk;

• Preserve debt capacity.

Benefits which Management sees of a

cooperation with a global operator

• Access to international best practices

and knowledge transfer;

• Relationships with global shipping

companies;

• Accountability and monitoring of

terminal management by global board

with more experience and an ability to

benchmark performance around the

world;

• Financial discipline and controls

imposed by international investors

and global banks

• Financial transparency due to due

diligence carried out at time of bidding

for/signing contract;

• Education for safety and security of

business process (international

standards/best practice).

Cons

• Dividend payment to operator will still

exist after 2019;

• Less flexibility in dividend

disbursement.



Option B: Joint-Operate (2/2)

50

Potential benefits in the future of a

cooperation with a global operator

• Use of latest technology and systems;

• Better global market knowledge;

• Purchasing power with suppliers.


Chapter VIIIIncremental CashflowAnalysis


52

Scenario Comparison (1/3)

SELF OPERATE JOINT OPERATE

Notes:

- This assumes continuation of joint operation agreement with

similar terms

- Also pays transaction costsRef: Appendix B - page 11

Bank

Partner

Pelindo III

TPS

Partner

Pelindo III

TPS

Royalty,

annual payment,

and dividend

Royalty,

annual payment,

and dividend


53


Upfront fee

(“UPF”)

Royalty and

annual payment

“Asset Buyback”

Transaction Cost

Capex

“Share Buyback”

Option A –

Self operation

Option B –

Continue joint operation*

Indicative (USD 250mn

equivalent pre-tax), proposed

by Pelindo III Management*

Authorization Agreement and

DPW proposal

Calculated payment for

shares based on the

Authorization Agreement

Benchmark of the similar

transaction

TPS, reviewed by BMT

Shareholder Agreement

Source of information

Management fee

to partner

Management information

(indicative)

Finance for Pelindo

III Capex

Debt amount to follow upfront

fees amount. Interest rates

based on benchmarking.

N.A.Nil because the

agreement has run full

term in 2019

1.0% of the upfront

feeN.A.

N.A. IDR 2.9 trillion (post

tax)

IDR 834,979 million

in 2019

Funded from upfront

fee + interest saving

IDR 2.9 trillion debt raised

(post tax UPF) + interest

payment

USD 31,200 fixed per month

until 2019 and N.A. after 2019

Notes:

• N.A = Not applicable

• For the purpose of calculation

assumptions for option B, we

assume DPW will continue the joint

operation.

• Tax impact has been provisionally

estimated in the financial model,

but proper tax review needs to

occur.

• The amount of debt raised for Self

operate scenario is assumed equal

to post-tax upfront fee received in

Joint operate scenario to ensure

comparability.

• The interest rates assumed are

4.99% for USD commercial loan

and 11.5% for IDR commercial

loan. 5 years repayment is

assumed.

• Upfront fee may changes subject to

further negotiation and tender

process. Any deviation from this

amount will impact our analysis.

• All figures are indicative, subject

to further review, discussion,

negotiation and all required

process and approvals.

USD 2.8 mil + 10% of gross

revenue. Net off within

consolidated cash flow.

Same for both scenarios Same for both scenarios

USD 31,200 fixed

per month

Dividend to

partner

TPS Management proposal

based on average historical

formula

49% of 80% of net income of

TPS, or the available free cash

flow whichever is lower until 2040,

plus 49% of the remaining cash

balance at the end of 2040.

-

+

-

-

-49% of 80% of net income of

TPS, or the available free cash

flow, whichever is lower until

2019, plus 49% of the remaining

cash balance at the end of 2019.

-

USD 2.8 mil + 10% of gross

revenue. Net off within

consolidated cash flow.

IDR 652,827 million

in 2040-



54


Capex of Pelindo III is funded by the upfront fee

which gives interest savings to the company, as

the company reduces its USD loan. For

simplicity purposes, interest saving is only for

one year. We have not calculated the monthly

calculation for interest saving.

In Self Operate scenario, the company needs

additional financing to fund the capex of

Pelindo III.1,513,167 1,369,833

-1,513,167 -1,369,833

-

-51,040 -134,389 -140,976 -92,869 -46,311 -11,419

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2015 2016 2017 2018 2019 2020 2021

Cash

flo

w (

IDR

Millio

n)

Period

Self Operate

Cash inflow from borrowings Capex Interest payment

2,883,000

-1,513,167 -1,369,833

57,756

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2015 2016 2017 2018 2019 2020 2021

Cash

flo

w(I

DR

Millio

n)

Period

Continue Joint Operate

Cash inflow from upfront fee Capex Interest savings



55

Net Present Value Sensitivity Analysis

• NPV is shown as a range for each sensitivity

case due to the use of discount rates range

(low and high)

• From the sensitivity analysis, joint operation

contributes higher NPV compared to self

operation in most scenarios.

• This is principally contributed by upfront fee

received in 2016. If the upfront fee is lower

than assumed, it will affect the analysis

result. In our current analysis for sensitivity 1

and 2, any upfront fee less than USD 203

million or IDR 3.1 trillion will result in NPV of

joint operate scenario to be lower than self

operate scenario.

• The major NPV difference for scenario 3 to 4

is due to the assumption of the same upfront

fee as other joint operate scenarios, with

lower dividend paid due to lower net income.

• The NPV difference from scenario 1 to 5 will

be much higher than the delta from 2 to 6 in

the case of greater revenue shortfall and

cost increment. This is due to joint

operations scenario which have the same

upfront fee even when revenue is reduced or

cost is increased. But in self operate

scenario, Pelindo III loses a lot more

dividend income if revenue is reduced or

cost is increased.

• BMT revenue and capex

• Projected operating expenses based on

average historical % from revenue,

overhead expense based on inflationhead

expense based on inflation






• BMT revenue, capex and cost calculation

(higher cost than no. 1)



• Revenue is lower by 2% than no. 1

• Overhead cost is higher by 2% than no. 1



• Long term throughput of 2.5 million TEUs

(enabling higher net income)

• Other follows no. 1




Joint OperateSelf Operate

1

3

5

7

2

4

6

8

4,418

5,006

3,053

4,233

4,293

4,948

4,679

5,129

3,053

4,233

4,946

5,334

3,416

4,462

4,803

5,267

5,248

5,478

5,248

5,478

2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000

1

2

3

4

5

6

7

8

Overall self operate range

Overall joint operaterange

NPV (IDR in billion)

Se

ns

itiv

ity

NPV of incremental cash flow to Pelindo III comparison

Legend:

Self operate

Joint operate



Incremental FCF Analysis - Conclusion

56

• Based on incremental FCFE analysis, Joint operate scenario

contributes higher NPV than the Self operate scenario.

• In the Self operate scenario, the Government owns 100% of

the risk in Pelindo III’s investment projects. In the Joint operate

scenario, TPS will have access to DPW or other partner’s

global experience of delivering many such projects.

• In the Joint operate scenario, Pelindo III has less flexibility in

setting the dividend policy as it must be agreed by both parties,

however, it will be more flexible for Self operate scenario.

• Moreover, Pelindo III is protected from commercial risk in Joint

operate scenario by having the risk shared to both parties.

• For self operate scenario, the possibility to raise capex finance

from bank loan or bond could be prohibited by ECA covenant

breach unless consent/waiver is received from Deutsche Bank

London.

Disclaimer:

1. We did not perform any review on BMT or Management

assumptions;

2. We assume average loan balance to calculate interest

expense;

3. Working capital is calculated based on accounts receivable,

accounts payable and inventory calculated by Management in

RJPP. We did not perform any review on those accounts;

4. Upfront fee is assumed to be received in 2016. The amount of

upfront fee is uncertain, however, Management estimates an

upfront fee of USD 250 million (indicative);

5. The free cash flow from TPS PTD 2015-FY 2019 is not

summed in the incremental cash flow in Pelindo III as

according to Management this refers to the previous

cooperation period;

6. Our working model and analysis are based on data and

assumption as of now and still subject to change upon receipt

of additional information and assumption, as well as further

review, discussion, negotiation and required approvals.


Chapter IXConclusion


Conclusion: Debt vs Equity Financing for Pelindo III

58

• Strategic

Expansion Plan

• Pelindo III requires a total of targeted IDR 23,35 trillion to execute its strategic

expansion plan and immediately address its fundamental issues • Yes • Yes

• Operational

Risks

Management

• In order to manage operational risks, Pelindo III requires both funding and

strong partner. • Not possible • Yes

• Execution of PSO • As an SOE, Pelindo III is also part of the “agent of development” and has

been mandated to execute several PSO projects, which may bring low returns

to the firm.• Yes • Yes, via PMN

• Financial

Sustainability

• In order to maintain resilient balance sheet, Pelindo III needs to sustain its

debt management on a healthy level. Under all Debt Financing scenarios,

Pelindo III will breach Net debt/EBITDA covenant by raising additional debt. • Not possible • Yes

• Currency

Mismatch

• While capex and interest services require USD funding, revenue stream of the

firm is still mainly IDR denominated. In addition, BI regulation restricts Pelindo

III to purchase USD• Yes, in USD • Yes, in USD

Equity Financing

Requirement and Feasibility

Debt Financing Requirement

and Feasibility

Equity financing, from PMN or continuation of existing joint-operating agreement, is the

more feasible alternative to satisfy Pelindo III financing requirements

Requirement Feasibility Requirement Feasibility

We did not perform any legal due diligence / review in the making of this report. This report does not consider any legal analysis and

implications that may otherwise impact the above conclusion.


Conclusion: Self-Operate vs Joint-Operate for Pelindo III

59

• Availability of fund• With regard to improvement and expansion plan, Pelindo III requires

immediate fund inflows to meet the funding requirements

• Asset Buyback

• Based on the Authorization Agreement for the Operation and Maintenance

of TPS between Pelindo III and TPS, Pelindo III is obligated to repurchase

asset from TPS

• Benefits from

Partnerhip with

Global Operator

• Access to international best practices and knowledge transfer;

Relationships with global shipping companies; Better global market

knowledge; Purchasing power with suppliers

• Operational Control • Pelindo III retains control over TPS operations

• Ownership &

Dividend Control• Pelindo III obtains full dividend payment portion

Joint-OperateSelf-Operate

Equity financing via continuation of existing joint-operating agreement is the more

favorable alternative to satisfy Pelindo III financing requirements

Favorability Favorability

We did not perform any legal due diligence / review in the making of this report. This report does not consider any legal analysis and

implications that may otherwise impact the above conclusion.

Appendix ABMT Report

1 Technical Commercial Assessments of TPS Concession Date: 22 Dec 2015

Technical Commercial Assessments of the TPS

Concession, Indonesia

Final Report

Date: 22 Dec 2015

Technical Commercial Assessments of TPS Concession Date: 22 Dec 2015 2 Date: 22 Dec 2015 2

Contents

0 Introduction

1 Throughput Forecast

2 Alternative Option

2.1 Productivity Analysis I

2.2 Productivity Analysis II

3 Capacity Plan Assessment

4 Tariff and Cost Estimates

5 Conclusion

Appendix A – DPW Forecast Review

http://www.google.com.hk/url?sa=i&rct=j&q=container+boxes&source=images&cd=&docid=I5XWlLSqXq4eBM&tbnid=-gdMi6RTgF2TgM:&ved=0CAUQjRw&url=http://www.joc.com/maritime-news/container-lines/esc-floats-alternative-container-weighing_20130225.html&ei=JdTsUYLaDc-fiQetq4HwCg&psig=AFQjCNE9LZu2TXW5nOs-2Thv1n8lR7kn_g&ust=1374561476740997

Technical Commercial Assessments of TPS Concession Date: 22 Dec 2015 3

Objective

Background

Located on the northern shore of eastern Java, TPS is currently the main container terminal of Surabaya Port. The Port is the

gateway to eastern Java, and it plays a critical role in serving the trade flows within Surabaya and beyond.

0. Introduction

Project Objective

To support in the process of considering the

potential renewal of the TPS concession,

emphasising the commercial and technical

aspects.

Focuses of the Study include:

• Market Potential and Competition

• Traffic Forecasting

• Productivity and Capacity

• Development and Expansion Plans

• Tariffs and Costs

TPS (within Surabaya Port)


Report Structure

This report contains five key sections structured as follows:

0. Introduction

3. Capacity Plan

Assessment

• Infrastructure & Facilities

• Appropriateness

• Timeline

1. Throughput Forecast

• Historical Throughput

Review

• Market Growth Drivers

• Regional Port Competition

• Intra Terminals and

Shares

• Expansion Plan and

Implications

• Forecast Assumptions and

Results

2. Productivity Analysis

• TPS vs. International &

Regional Ports

- Benchmarking Portfolio

- Productivity

Comparison

• TPS vs. Pelindo III Self

Operated Ports

- Productivity

Comparison

- Summary

4. Tariff and Cost

Estimates

• References

• Costing Review 5. Conclusion

• Reasonability?

• Best interest for PP3?

Cargo Demand

Forecast Alternative Option

Concession Plan

Review Conclusion


Throughput Forecast



The forecast was conducted using “Top-down” approach through assessing the demand trends of Tanjung Perak and then its

subordinate terminals.

Approach


Throughput Forecast Flow

Tanjung Perak

Throughput Forecast

TPS shares

estimation

TPS Throughput

Forecast

.

Figure 1.1 Review Approach Key steps in the forecast review include:

• Review the historical throughput of Tanjung Perak

• Analyse hinterland economy and growth trends

• Review the historical throughput and shares of

TPS and other terminals

• Assess the development / expansion plans

• Compare the throughput projections of Tanjung

Perak and TPS

The study approach is shown in Figure 1.1.

Literature Review

Data and information applied in the study are mainly from PP3 documents and public sources. These includes:

• Pelindo III Masterplan (Tanjung Perak Port throughput forecast 2015~2030), referred as PP3 Masterplan / PP3 Forecast

• DPW throughput forecast by terminals (2015~2040), referred as DPW Proposal / DPW Forecast

• Port capacity plan (2015~2019), prepared by DPW

• BPS Statistics for Indonesia and East Java

• IMF forecast for Indonesia Economy

• Hinterland economy

• Growth drivers and

trends

• Terminal

Capacity

• Expansion plan

BMT Forecasts


Current Status of Tanjung Perak

Robust Throughput Growths

Tanjung Perak is currently the 2nd largest port in

Indonesia. The Port handled more than 2.9 million

TEUs in 2014, with a CAGR (Compound Annual

Growth Rates) of 6% from 2006.

The port recorded a rapid growth of domestic

container throughput (i.e., 8% p.a. in the past

eight years). The growth of international container

throughput was comparatively moderate at 4%

growth p.a..

As a result, in 2014 around 54% of total container

throughput was domestic containers, leaving the

other 46% for international trades of containers.

The majority of foreign trade was direct shipment,

i.e., import / export cargoes.

Tanjung Perak covers two tiers of hinterland:

• Direct hinterland: East Java

• Indirect hinterland: East Indonesia and central

Java.


Figure 1.2 Historical Container Throughput and Annual Growths for

Port of Tanjung Perak, 2006-2014

Source: Pelindo III (PP3)

Figure 1.3 Hinterland of Tanjung Perak

Source: BMT


Hinterland Economy Overview

Economic Conditions

In 2013, East Java had the a Gross Regional

Domestic Product (GRDP) of IDR 1,136 trillion, the

2nd highest in Indonesia. The Province kept a high

speed growth in the last 5 years with an average

growth rate of 6.5% p.a., slightly above the national

average level of 0.5% p.a..

Kota Surabaya, where Tanjung Perak locates in,

is the economic and industrial centre of East Java.

The city contributed a steady 30% to East Java

GRDP.

Agricultural and chemical industries accounted for

90% of the production value in East Java. Metals,

machines, textiles and miscellaneous industries

made up 9% of the production output.

The industry structure of East Java is relatively

concentrated on lower value-added industries,

leading to a comparatively low container

generation level at present. However, with the

industrialisation and urbanisation, more high value-

added industries and containerised cargo are

expected.


Figure 1.4 GRDP by Provinces (Current Prices), 2013

Figure 1.5 East Java Share of Production Value by Industry, 2013

Source: BPS Indonesia


Economic Growth Leads to Increasing Cargo Trade Demand

GDP vs TEU

It is widely acknowledged that the growth of cargo

trade is mainly driven by the urbanisation and

economic developments.

To measure the relationship of generated traffic

and the hinterland economy, an indicator called

Traffic to GDP Growth Ratio was introduced. This

indicator represents a multiplier effect that for 1%

GDP growth how much percent of container traffic

growth can be triggered.

With adequate logistics infrastructure (incl. both

water and land sides) provided, the Traffic to GDP

Growth Ratio could be around 2.0 to 2.5 times (for

world top 20 container ports), as shown in Figure

1.6. As a reference, the existing ratio of JICT is

around 1.5 times.

In the case of Tanjung Perak, this ratio was about

1.1 times, much lower than the international and

regional standard. This may be due to a plausible

shortage of logistics infrastructures. It also implies

that provided with more handling capacity, Tanjung

Perak could embrace a steadily increasing

cargo demand in the future.


Sources: BPS Indonesia & PP3

Figure 1.7 Traffic to GDP Growth Ratio at Tanjung Perak

Figure 1.6 Traffic to GDP Growth Ratio at World Top 20 Container Ports


BMT’s Throughput Forecast of Tanjung Perak

Forecast Approach

A top-down approach is adopted for the throughput

forecast of Tanjung Perak (See Figure 1.8).

For the purpose of long-term forecasting it is necessary

to use simplified relationships, as many of the causal

variables are harder to predict than throughput itself. Of

all the economic indicators that can be used for

forecasting container throughput, GDP is considered

most suitable.

The future growth of container throughput can be

estimated by hinterland economic growth

(represented by GDP) multiplied by the projected

Traffic to GDP Growth Ratio.

The rationale to apply this approach is to capture not

only the trend of economic growth, but also the

potential implications of industrialisation, port

competition, and logistics maturity. This includes the

upcoming full operation of Teluk Lamong (Lamong)

and connectivity enhancement initiatives / projects (incl.

“maritime highway”) in the future.


Hinterland Economic Growth

Indonesian Economy

East Java Economy

GDP Growth Rate

• Existing and future national GDP

forecasted by macro-economic think

tanks such as IMF.

• East Java GDP derived based on its

elasticity with national GDP.

• GDP growth in East Java is

estimated to be 5.5% to 7.0% p.a..

Traffic to GDP Growth Ratio

Existing Traffic to

GDP Growth Ratio

• Based on historical traffic of

Tanjung Perak and East Java

GDP data.

Expanded Capacity

of Port Infrastructure

• New ports / terminals established

lower the logistics costs and hence

cost for cargo trade in the hinterland

Figure 1.8 Forecast Approach


BMT’s Throughput Forecast of Tanjung Perak (cont.)

Adjustments for Non-economic Factors

Pendulum Nusantara (also referred as “Hub &

Spoke”) is being developed with the aim to increase

the shipping flow from East to West and vice-versa by

connecting the six economic corridors identified in

MP3EI (2011). For this Pendulum to be successful, the

Government planned to improve channel accessibility,

terminal capacity and related infrastructure for all

gateway ports identified. In Surabaya,

• physical conditions of the water channel will be

improved by dredging

• terminal infrastructure and capacity will be

increased

• infrastructure network will be improved which will

expand the handling capacity, and hence lower the

logistics costs of trading in East Java.


Surabaya is already the major gateway of East Java and having the Pendulum policy will further strengthen the strong position of

Surabaya as a whole. As a result, the cargo trade in the hinterland will be further stimulated, boosting the Traffic to GDP growth level.

With references to regional ports, it is assumed that the traffic to GDP ratio at Tanjung Perak will start from the existing 1.1 times and

gradually grow to about 1.5 times in five years. And the growth will be stabilised when it approach its capacity.

Figure 1.9 Pendulum Network

Source: World Bank


BMT’s Throughput Forecast of Tanjung Perak (cont.)


Forecast Results

Based on the IMF forecast and historical GDP

growth of East Java, a 5.5% to 7.0% of annual

GDP growth rate is applied in the forecast.

In line with the historical trend, domestic cargo is

expected to grow faster than international cargo.

Based on the above-mentioned market trends and

assumptions, the results market demand forecast at

Tanjung Perak are:

• The throughput of Tanjung Perak is expected to

reach 4.6 million TEUs in 2020 and 9.3 million

TEUs in 2030.

• Growth rates of Tanjung Perak container

throughput are expected to range from 5.0% to

9.0% during 2015 to 2040.

• Domestic trade is expected to continue to be

the major contributor to Tanjung Perak’s

throughput.

Throughput

(mn TEUs) 2015 2020 2025 2030 2040

International 1.3 1.6 2.0 2.4 3.3

Domestic 1.8 3.0 4.7 6.9 14.9

Total 3.1 4.6 6.7 9.3 18.3

Figure 1.10 Tanjung Perak Throughput Forecast Results

Source: BMT

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

20

31

20

32

20

33

20

34

20

35

20

36

20

37

20

38

20

39

20

40

mn

TEU

s

International Domestic


Historical Throughput by Terminals

Key Container Terminals

There are 5 key container terminals of Tanjung

Perak, namely:

• TPS (international and domestic; international

concentrated)

• BJTI (international and domestic; became solely

domestic in 2015)

• Jamrud & Mirah (solely domestic; will be closed

by 2017)

• Nilam (solely domestic), and

• Lamong (international and domestic).

Currently, TPS is the dominant container terminal at

Tanjung Perak, accounting for a steady 90% of total

international container throughput of Tanjung Perak.

The share of TPS’s domestic trades was declining

from 16% in 2007 to 12% in 2014, mainly due to the

development of other terminals such as Nilam.


Figure 1.11 Shares of International Trade at Key Terminals of Tanjung Perak

Source: DPW Traffic Data for 2007 to 2014

Figure 1.12 Shares of Domestic Trade at Key Terminals of Tanjung Perak

68% 64%57% 54% 49% 50% 51% 49%

16% 19%26% 25%

19% 18% 18% 16%

16% 16% 18% 18%

13% 14% 13%12%

3%19% 18% 18%

18%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014

BJTI Mirah/Jamrud TPS Nilam Lamong


Demand Supply Balance

Terminal Development Plans

To understand future demand and supply

situation of Tanjung Perak, the existing and future

handling capacity of TPS and other key terminals of

Tanjung Perak have been assessed.

In particular, the commencement of Lamong

terminal and new terminals is expected to be the

supporting terminals to TPS and absorb additional

cargo demand spilled over from TPS.

The PP3 Master Plan shows the capacity plan up to

2030. In summary,

• TPS capacity will only have marginal increase, if

any, due to the land issue.

• Lamong will become another key terminal with

capacity increasing from 0.75 million TEUs in

2020 to 4.5 million TEUs in 2030.

• New terminals such as Manyar may be

established in the medium to long term.


Capacity Plan

(mn TEUs) Existing 2016 2018 2020 2030

TPS 1.8 1.8 1.8 2.2 2.5

BJTI 1.1 1.1 1.1 1.1 1.8

Lamong 0.75 0.75 1.5 1.5 4.5

Others, e.g., Manyar 0.4 0.4 0.4 0.9 0.9

Total 4.1 4.1 4.8 5.7 9.7

Figure 1.13 Capacity Plan at Key Terminals of Tanjung Perak

Source: The Master Plan of Tanjung Perak Port, DPW Proposal

* Note: The capacity of container cargo at Manyar is not shown in PP3 Masterplan. For the sake of

analysis, around half of the quay length and hence capacity is assumed for container cargo.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2015 2016 2017 2018 2019 2020 2030

mn

TE

Us

TPS BJTI Lamong Others BMT Forecasted Throughput


BMT Initial Throughput Forecast of TPS

Forecast Approach

The forecast of TPS container throughput considers

(see Figure 1.14):

• Existing market share and volume of

international and domestic cargo respectively

• Expansion plans of TPS and other terminals

• Utilisation level of TPS and other terminals

The derived throughput at TPS will then be brought

forward to compare against its design capacity.

With no further expansion in the medium to long

term, the throughput at TPS will be stablised.


Capacity Plan Historical market

shares of terminals

Forecast of TPS Market Share

Domestic Cargo International Cargo

Market Share and Capacity Plan

Tanjung Perak Throughput Forecast

TPS Throughput

Figure 1.14 Forecast Approach


0.00

0.50

1.00

1.50

2.00

2.50

TPS Throughput Forecast

BMT Throughput Forecast of TPS (cont.)

Key Assumptions and Forecast Results

The following assumptions are applied in the TPS

forecast.

It is assumed that the existing cargo of TPS will

sustain and grow with the hinterland economy,

additional demand will be spilled over to new

terminals when TPS faces capacity constraints.

Growth rate for international and domestic

throughput of TPS is in line with that of Tanjung

Perak throughput forecast.

Due to port operation efficiency and yard

constraints, it is assumed that utilisation of TPS

cannot reach 100%.

Taking references from JICT and other world

leading terminals, it is assumed that TPS can

reach 85% to 90% utilisation in the long term.

The results show that TPS is expected to handle 1.7

million TEUs in 2020, which is expected to reach

2.2 million TEUs in the long term.


Figure 1.15 Throughput Forecast of TPS, mn TEUs

Source: BMT Estimate

• Throughput at TPS

stablises in the long term.

• The existing cargo of

TPS will sustain and

grow.

• Lamong will realise 1.6

million TEU of capacity in

2023, when TPS reaches

high utilisation (~90%).

Therefore, it is expected that

Lamong will dilute some

shares in 2023.


Summary

Forecast of Tanjung Perak

Throughput

The throughput of Tanjung Perak is

expected to reach 4.6 million TEUs in

2020 and 9.3 million TEUs in 2030.

The growth rates of Tanjung Perak

container throughput are expected to

range from 5.0% to 9.0% during 2015 to

2040.

Forecast of TPS Throughput

TPS is expected to handle 1.7 million

TEUs in 2020, which is expected to

reach 2.2 million TEUs in the long

term.

The growth rate for international and

domestic throughput of TPS is in line

with that of Tanjung Perak throughput

forecast.



Alternative Option (Self-operation vs. Joint Operation)


TPS vs. Pelindo III Self Operation

The technical assessment of whether TPS should be self or jointly operated (with strategic partners) has been reviewed from the port

productivity perspective.


Productivity Analysis (I) – TPS vs. International & Regional Ports



Figure 2.1 General Layout of Tanjung Perak

TPS in Tanjung Perak

Key Container Terminals

As stated in Chapter 1, containers at

Tanjung Perak are mainly handled by:

• TPS;

• BJTI;

• Various terminals of conventional

terminals (i.e., Jamrud, Nilam and Mirah);

and,

• Lamong (newly launched deep water

terminal).

Due to the increasing cargoes in Tanjung

Perak over the past years, Pelindo III

decided to build Lamong; and to cluster

terminals based on cargo types.

Since 2015, BJTI has become a dedicated

terminal for domestic containers. The

international containers are handled at TPS

or Lamong.


TPS BJTI Conventional Lamong

(Phase II)

Length (m) 1,450 1,620 3,780 1,000

Width (m) 45-50 15 15 30-50

Depth (m ) 8-11 7-10 6-9 13-14


Figure 2.2 DPW’s Global Port Portfolio

Productivity Benchmarking To assess the productivity of TPS, we took references of the port portfolios of DPW, HPH and PSA.

DPW’s Global Portfolio

DP World (DPW) is one the world’s major container terminal operators. It operates over 65 terminals spanning across 6

continents. In 2014, DP World handled 60 million TEUs, much of this was realised at its home base terminals in Middle East e.g.

Jebel Ali. With its continued developments and expansions, DPW’s capacity has been growing significantly in key emerging markets,

including India and China.


Source: DPW official website (as of March 2015)

Benchmarking

TPS’ port terminal performance

including berth, yard and crane

productivity will be benchmarked

against other DPW’s terminals in

Asia, in view of their similarity of

geographical location, capacity,

container traffic, infrastructure and

facilities, etc.

Reference from the performance of

other world leading ports

operated by Hutchison Port

Holdings (HPH) and Port of

Singapore Authority (PSA) are

also reviewed.


Productivity Benchmarking Approach

Approach

A container terminal consists of at least 2 major operational areas,

as shown in the Figure:

• Quay – operational area between quay wall and container yard

(apron or the area just behind the berth front), and

• Container yard – terminal storage/stacking area.

Amongst others, infrastructure and equipment representing high

capital investment for a container port / terminal. BMT assessed

TPS’s port capability and handling efficiency based on the

infrastructure and equipment on both quay side and yard side.


Infrastructure Equipment

Yard Size of terminal area affects the

stacking height, spacing between

the container row, as well as the

types and number of handling

equipment

Yard crane – for container

transport and stacking within

the yard

Quay Berths length and draft

determines the maximum size of

vessel berthing

Quay crane – for ship to

shore operations (loading

and discharging of vessels)

Figure 2.3 Illustration of a Container Terminal

Source: BMT


Productivity Benchmarking Approach (cont.)

Benchmarking Indicators

Port performance is commonly measured in terms of throughput.

In general, how berth, yard and crane efficiency relate to port’s

throughput can be expressed by the following productivity

indicators:

• Berth Productivity – throughput per metre of berth, i.e., TEUs

handled at berth divided by total length of berths

• Terminal Area Productivity – throughput per area, i.e., TEUs

handled per hectare of yard

• Quay Crane Productivity – crane moves per hour, i.e.,

containers moved to / from a vessel per hour

• Yard Crane Productivity – throughput per yard crane.


The benchmarking study was done by reviewing productivity for TPS against DPW’s terminals in Asia, the global port portfolio of

HPH and PSA’s terminals based on secondary and publicly available data including:

• Reported/published annual throughputs

• Ports’ websites and publications with port facts and figures


Berth Productivity of TPS Compared with World Leading Ports

Berth Length Productivity

The berth length productivity is defined as

throughput handled per metre of berth. This

indicator measures the overall productivity of a

terminal to transfer containers between land and

vessel. A high figure suggests that the terminal can

accommodate large vessels and TEU loads on

each vessel or it has a high number of calls per

berth.

The berth length productivity of TPS is about ~900

TEU/m. TPS currently accommodates ships with

size of ~2,500 TEU, which is relatively small

comparing with DPW’s Asian ports. As illustrated in

the Figure, TPS’s productivity is below DPW’s

Asian average (~1,500 TEU/m).

Implications

This number implies TPS is limited by the physical

conditions (such as water depth), the average size

of vessel the terminal can handle is small compared

with other Asian ports.


Figure 2.4 Berth Length Productivity of DPW’s Asian Ports

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Throughput per Berth Length ('000 TEU/m)

Note: 14 major Asian container terminals operated by DPW have been selected for comparison and

ranked by their throughput handled, per metre berth length.

Source: Terminals’ official websites, China Ports Yearbook, Containerisation International Yearbook


Berth Productivity of TPS Compared with World Leading Ports (cont.)

Berth Length Productivity

TPS is further compared with global container terminals operated by HPH, as well as PSA in Singapore. TPS is ranked ~top 60%,

which is among the lower end of 2nd Tier ports.


Figure 2.5 Berth Length Productivity of Global Ports

Note: 14 major Asian container terminals operated by DPW, 33 major ports operated by HPH, and PSA, have been selected for

comparison and ranked by their throughput handled, per metre berth length.


0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

QQ

CT,

Chin

a

CT3,

Ho

ng

Ko

ng

HIT

, H

ong

Ko

ng

SP

ICT,

Chin

a

NB

CT,

Chin

a

SIC

T,

Chin

a

PS

A, S

ing

ap

ore

PN

IT,

So

uth

Ko

rea

YIC

TL,

Chin

a

NS

ICT,

Ind

ia

Neth

erland

s

CH

T,

Ho

ng

Ko

ng

MIC

T,

Ind

ia

YIC

T,

Chin

a

LC

IT,

Thailand

SM

CT,

Chin

a

KO

JA

, In

do

nesia

CC

T,

Ind

ia

TO

CT,

Chin

a

Mexic

o

Baham

as

JIC

T,

Ind

onesia

Mala

ysia

XIC

T,

Chin

a

TP

S

Saud

i A

rab

ia

Pakis

tan

ATI, P

hilip

pin

es

Ko

rea

Eg

yp

t

Panam

a

UK

SP

CT,

Vie

tnam

Po

land

QIC

T,

Pakis

tan

ICTT,

Ind

ia

Tanzania

VC

TP

L,

Ind

ia

Thailand

Arg

entina

Om

an

Italy

Vie

tnam

Throughput per Berth Length ('000 TEU/m)

2nd Tier(~top 20-60%)

Top Tier(~top 20%)

3rd Tier(~last 40%)

Implications

Consistently, TPS is not as

productive as the average of

world’s leading ports (1st Tier),

in terms of berth length

productivity.

The “1st Tier” terminals are

mainly located in the world’s

busiest container ports, i.e.,

Hong Kong Port, Shanghai

Port and Singapore Port.


Terminal Area Productivity of TPS Compared with World Leading Ports

Terminal Area Productivity

Throughput per terminal area is a measure of how

productively a terminal (or yard) is used, indicating

how intensely the yard infrastructure is used in

processing the throughput.

TPS’s terminal area is relatively productive as

compared with other Asian terminals. Its terminal

area productivity is ~35,000 TEU/Ha which is ~13%

more productive than that of DPW’s Asian

average.

Implications

The higher than Asian average throughput/area

ratio indicates TPS is in relatively more effectively

use of available terminal area.

It is noted that Hong Kong Port is particularly

productive in terms of yard area productivity. This is

mainly due to the constrained land provision and

high land costs in the area which force significant

investment in terminal systems to best use limited

land assets.


Figure 2.6 Terminal Area Productivity of DPW’s Asian Ports

Note: 14 major Asian container ports operated by DPW have been selected for comparison and

ranked by their throughput handled, per terminal area.


0

10

20

30

40

50

60

70

80

90

100

Throughput per Terminal Area ('000 TEU/Ha)


0

10

20

30

40

50

60

70

80

90

100

HIT

, H

ong

Ko

ng

CT3,

Ho

ng

Ko

ng

CH

T,

Ho

ng

Ko

ng

PS

A, S

ing

ap

ore

CC

T,

Ind

ia

YIC

TL,

Chin

a

SP

ICT,

Chin

a

QQ

CT,

Chin

a

MIC

T,

Ind

ia

TP

S

NS

ICT,

Ind

ia

Pakis

tan

PN

IT,

So

uth

Ko

rea

LC

IT,

Thailand

TO

CT,

Chin

a

YIC

T,

Chin

a

NB

CT,

Chin

a

KO

JA

, In

do

nesia

Neth

erland

s

ATI, P

hilip

pin

es

Baham

as

SIC

T,

Chin

a

JIC

T,

Ind

onesia

Saud

i A

rab

ia

Tanzania

Eg

yp

t

Mexic

o

Ko

rea

QIC

T,

Pakis

tan

Arg

entina

Po

land

SM

CT,

Chin

a

SP

CT,

Vie

tnam

Panam

a

XIC

T,

Chin

a

Mala

ysia

Thailand

VC

TP

L,

Ind

ia

UK

Om

an

Italy

ICTT,

Ind

ia

Vie

tnam

Throughput per Terminal Area ('000 TEU/Ha)

2nd Tier(~top 20-60%)

Top Tier(~top 20%)

3rd Tier(~last 40%)

Terminal Area Productivity of TPS Compared with World Leading Ports (cont.)

Terminal Area Productivity

TPS is further compared with global container terminals operated by HPH, as well as PSA in Singapore. The result shows that TPS

is ranked among the higher end of 2nd Tier ports.


Figure 2.7 Terminal Area Productivity of Global Ports

Note: 14 major Asian container terminals operated by DPW, 33 major ports operated by HPH, and PSA, have been selected for

comparison and ranked by their throughput handled, per terminal area.


Implications:

When compared with PSA

and HPH’s global assets, TPS

is in the top 23%.

TPS also performs

better than the major

container terminals in

Tanjung Priok (i.e.,

JICT and KOJA).


Quay Crane Productivity of TPS Compared with World Leading Ports

Quay Crane Productivity

In terms of port performance, the type of

cranes deployed for quayside operation

are important in demining how efficient a

port handles containers for shorter port

stay of the ship, by number of move per

hour (mph). Generally crane efficiency can

reduce vessel turnaround time, and

increase overall terminal productivity and

throughput.

On quayside, TPS is currently serviced by

11 single-lift cranes, with an average

performance of ~ 25 mph.

Implications

TPS performs the normal standard for a

traditional container terminal with

conventional single-lift quayside cranes

(20-25 mph), but has not reached the

premium performance (over 35 mph,

normally associated with post panamax

quay cranes).


Figure 2.8 Quay Crane Productivity of International Ports (2006-2015)

Note: As far as data were made available, 37 key international ports have been selected for comparison and ranked

by their quay crane productivity.

Source: Container productivity at New Zealand ports, Ministry of Transport of New Zealand, Port Benchmarking for

Assessing Hong Kong’s Maritime Services and Associated Costs with other Major International Ports, Terminals’

official websites

0

5

10

15

20

25

30

35

40

45

Crane Productivity (mph)

“Standard”

Performance

“Premium”

Performance


Yard Crane Productivity of TPS Compared with World Leading Ports

Yard Crane Productivity

Yard crane productivity may be

defined by the volume of throughput

over the number of gantry cranes.

The benchmark value (50,000 TEUs

per crane) was taken with reference to

the average of global network, while

the world’s more highly efficient

terminals, such as the major ports in

China and Hong Kong, are operating

at over 100,000 TEUs per crane.

TPS has 30 RTGs with an average

performance of ~ 46,000 TEUs per

crane.

Implications

TPS performs close to the standard

crane performance. This may be

influenced by the size of yard, and

size and number of vessels handled.


Figure 2.9 Yard Crane Productivity of International Ports

Note: 14 major Asian container terminals operated by DPW, 33 major ports operated by HPH, and PSA, have been

selected for comparison and ranked by their throughput handled, per yard crane.


0

20

40

60

80

100

120

140

160

180

200

Throughput per Yard Crane ('000/yard crane)

“Standard”

Performance

“Premium”

Performance


Summary of Comments

The results of analysis have shown that the

productivity of TPS is considered above average

by international standards, and can be ranked as

“2nd Tier” among the global container ports. TPS

is less productive compared to the “1st Tier” ports

/ terminals located in the world-class container

ports.

The analysis also reveals that TPS has

performed better than the major container

terminals in Tanjung Priok (e.g., JICT and

KOJA), which implies that DPW is a good

partner for Pelindo III to jointly operate TPS

with continuously.

Meanwhile, TPS needs a significant jump (about

+120%) in berth productivity to become Top Tier

terminals; it requires around 40% increase in

area and quay crane productivity to match the

most highly efficient terminals; only 9% increase

in yard crane is needed to reach the normal

standard for a similar sized terminal.

This suggests any major improvement that

increases the handling ability of TPS is best

focused on upgrading / purchasing of cranes.

The improved overall productivity will help

attract and handle more vessel calls and

cargo volume.


Figure 2.10 Productivity Benchmarking

Note: Numbers in the arrows indicate the percentage growth TPS required in proceeding into the next

tier.

Berth Productivity Area Productivity Quay Crane Productivity Yard Crane Productivity

3rd Tier (Last 40%) 2nd Tier (Top 20-60%) Top Tier (Top 20%) TPS

12

1%

38

%

40

%

9%


Figure 2.11 Pelindo III’s Key Container Terminals

Productivity Analysis (II) – TPS vs. Pelindo III Self Operated Ports

TPS vs. Pelindo III Self Operated Ports

Among all of the terminals operated by Pelindo III, the majority of container throughput handled are at Tanjung Perak (mainly

contributed by TPS and BJTI), followed by TPKS, Banjarmasin and Tenau Kupang. TPKS has been selected and benchmarked

against TPS, considering the comparative container traffic, trade pattern, capacity, infrastructure and facilities, etc.


1. TPS

2. Terminal

Petikemas

Semarang

(TPKS) 1 2

Source: Pelindo III, BMT

Throughput in 2014 (mn TEU)

1.2

0.6 0.60.4 0.1

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.31.2

0.6 0.6

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

TPS BJTI TG. PERAK

TPKS


Berth Productivity of TPS Compared with Pelindo III’s Container Terminals

Berth Productivity

In terms of berth productivity, TPKS

is ~ 7% more efficient than that of

TPS, indicating the berth

operational conditions of TPS

may have room for improvement

compared with Pelindo III’s

terminals.

Implication

This suggests that TPS’ berth

productivity could be improved if

self-operated.


Figure 2.12 Berth Productivity of TPS vs. TPKS

Source: Pelindo III

0.0

0.2

0.4

0.6

0.8

1.0

1.2

TPKS TPS

Th

rou

gh

put p

er B

ert

h L

en

gth

('

000 T

EU

/m)


Figure 2.13 Throughput per Quay Crane of TPS vs. TPKS

Throughput per Quay Crane of TPS Compared with Pelindo III’s Container

Terminals


Throughput per Quay Crane

The quay crane productivity was

compared in terms of:

1. the volume of throughput over

the number of quay crane; and

2. the number of moves per crane

per hour (mph).

TPS’ average throughput handled

per crane is about 125,000 TEU.

TPS is more efficient than TPKS

(~20% difference).

Implication

This implies a better utilisation of

quay cranes at TPS/DPW has

existed compared with the other

Pelindo III’s terminals.

Source: Pelindo III

0

20

40

60

80

100

120

140

TPS TPKS

Th

rou

gh

put p

er Q

uay C

ran

e('

000/q

uay c

ran

e)


Figure 2.14 Quay Crane Move per Hour of TPS vs. TPKS

Quay Crane Productivity of TPS Compared with Pelindo III’s Container

Terminals


Crane Move per Hour (mph)

The quay cranes of TPS and TPKS

are operating at the same

productivity level (~25 mph). They

both reach the “Standard”

performance of a container terminal.

Implication

Quay cranes used by Pelindo III self-

operated terminals could be as

efficient as those in TPS.

Source: Pelindo III

0

5

10

15

20

25

30

TPS TPKS

Cra

ne P

rod

ucti

vit

y (m

ph

)


Summary


There is about 10-20% difference in productivity

between TPS and Pelindo III self-operated terminal,

TPKS. TPKS performs better than TPS (in terms of

berth productivity) or at the same level as TPS'

standard (in terms of crane productivity).

The productivity difference if TPS is self operated by

Pelindo III is considered minimal.

However, due to the difference in volume and the

cargo mix and trade patterns, as well as the existing

constraints faced at the terminal, TPS may not be

comparable with other local terminals.

Despite of that the analysis does not pre-empt the

possibility that Pelindo III, if operating alone at TPS,

could achieve a productivity similar to that of jointly

operating with DPW.

Nonetheless, one should also consider the non-

technical benefits (e.g., international branding,

technology application, management experience,

financial soundness, etc) of jointly operating

with international players.

Besides, TPS has performed better than other

terminals operated jointly by international

terminal operators in Indonesia (see the previous

section).

Figure 2.15 Productivity Benchmark (Self-operated vs. Jointly-operated)

Berth Productivity Throughput per Quay Crane Crane Productivity

TPKS TPS

7%

20%


Conclusion

TPS vs. International & Regional

ports

The analysis reveals that TPS has

performed better than the major

container terminals in Tanjung Priok

(e.g., JICT and KOJA), which implies

that DPW has been a good partner for

Pelindo III to jointly operate TPS

continuously with.

TPS vs. Pelindo III Self Operated

Ports

The analysis does not pre-empt the

possibility that Pelindo III, if operating

alone at TPS, could achieve a

productivity similar to that of jointly

operating with DPW. Despite of this, it is

worth noting that due to the difference in

volume and the cargo mix and trade

patterns, as well as the existing

constraints faced at the terminal, TPS

and other local terminals may not be

comparable.


Non-technical Benefits

One should also consider the non-

technical benefits (e.g., international

branding, technology application,

management experience, financial

soundness, etc) of jointly operating with

international player.


Capacity Plan Assessment

3. Capacity Plan Assessment


Investment Plan by DPW / TPS


As of 10th Dec 2015, the documents relating to the TPS Investment Plan by TPS/DPW received are summarised as below:

• 20150907_TPS Extension Scenario.pdf, received on 12 Oct 2015. This file outlines the key investment items of TPS for the

next concession period, including:

Quay crane replacement / purchase at benchmarking years

Yard crane replacement / purchase at benchmarking years

CAPEX (Capital Expenditure) Plan from 2013 to 2018

• Based on the discussion with the TPS team on 8th Dec 2015, it is confirmed that dredging work at TPS will be conducted to

deepen the channel from the existing 10.5 m to 13 m by 2017.

Regarding the relating Capital Costs, Pelindo III has yet received the updated CAPEX breakdown data to be provided by

TPS/DPW. To facilitate the work, the Pelindo III team provided the following documents:

• COST INPUT TEMPLATE 8 DEC v1 sent 091215.xlsx and CAPEX_TPS rev_101215.xlsx, received on 9 Dec 2015 and 10

Dec 2015 respectively based on the required cost template drafted by BMT.

• Historical cost items and data in 2013 as compiled in the Financial Model TPS Final (24 Dec 12) Master copy FINAL (to P3)

(DPW base case).xlsx prepared by PT Bahana Securities.

Based on the preceding findings and received data, BMT make the best effort to provide the assessment and the independent

estimations for the TPS Investment Plan.


Dredging Requirement

Berth Improvement

As acknowledged from PP3 masterplan,

TPS also aims to dredge from the

existing draft of 10.5 m to 13 m by 2017.

Together with the facility purchase /

replace plan, TPS intends to enhance

the terminal conditions to be “fit” for the

accommodation of larger container

vessels, mainly 4th generation vessels.

Normally, the minimum water depth

required to accommodate 4th generation

or up vessels is 13 m at least. Therefore,

dredging to -13 m is reasonable and

conservative.



DPW’s Quay Crane and Yard Crane Supply Plan


Quay STS Crane Plan 2015 2020 2025 2030 2040

Int’l twin-lift nos. 0 5 6 9 10

Int’l single-lift nos. 9 4 4 1 0

Domestic single-lift nos. 2 4 4 4 4

Total Numbers 11 13 14 14 14

Yard RTG Crane Plan 2015 2020 2025 2030 2040

RTG Numbers 30 33 38 38 38

Target Capacity 2015 2020 2025 2030 2040

(mn TEUs) 1.8 2.18 2.38 2.47 2.5

Notes: STS crane – Ship-to-shore quay crane; RTG crane – Rubber-tyred gantry crane

Based on the throughput forecast, DPW proposed to expand existing capacity to 2.5 m TEUs by 2040, making the utilisation at

around 80% to 85%. This is considered reasonable.

The capacity expansion plan and the associated facility investments in DPW proposal are summarised as below:

The key investment plan of TPS tie with the upgrade / replacement of Quay Cranes and Yard Cranes. The appropriateness of

required cranes to meet the capacity plan will be assessed.


References of Quay Cranes Capacity


Reference

Implication

Equipment Type Each Capacity Equivalent

(M TEUs p.a.)

• Rotterdam, APM Terminals, capacity of 2.7mn TEUs, 13 Post-Panamax

STS cranes all with a twin lift capability PP (twin-lift) 0.20

• Alabama APM Terminal Mobile, capacity of 350,000 TEUs with 2 Post-

Panamax cranes now in service. PP 0.17

• Colon Container Terminal, capacity of 1.3mn TEUs, 5 Post-Panamax STS

cranes and 5 Panamax STS ones.

PP Crane

Panamax Crane

0.18

0.08

• Port of Balboa, 4 Super Post-Panamax cranes, 10 Post-Panamax cranes

and 8 Panamax cranes, capable of handling 3.2mn TEUs in 2014.

SPP

PP

Panamax Crane

0.22

0.18

0.08

• South Asia Gateway Terminals, capacity of ~ 2 M TEUs pa, 6 SPP QC and

3 PP quay cranes.

SPP

PP

0.22

0.18

Notes: PP – Post-Panamax; SPP – Super Post-Panamax;

To determined the appropriateness of cranes in need, research on recent reference of quay cranes and yard cranes in the port

industry has been conducted in order to inform the additional handling capacity to be brought in by the installation of quay cranes.

Research shows that Post-Panamax STS quay cranes is able to provide ~ 0.18 mn TEUs p.a. for single-lift type and ~

0.2 mn TEUs p.a. for twin-lift type.


Review of Quay Crane Capacity

Capacity Review

• Applying the estimated ratio of capacity TEUs per

quay crane on DPW’s proposed number of quay

crane, Figure 3.1 shows the BMT estimations of

handling capacity, which is compared with the

handling capacity proposed by DPW.

• BMT’s estimates show that according to DPW’s

proposed quay crane investment plan, its handling

capacity should be able to handle 2.68 mn TEUs in

the medium to long term, whereas DPW ‘s estimated

handling capacity is ~ 7-8% lower.

• The under-estimated capacity by DPW’s investment

plan is roughly equals to one single-lift Post-

Panamax crane.

Comments

• Hence, it is considered that DPW’s proposal on quay

crane investment can be reduced by 1 crane, which

will help reduce the capital cost required and

generate potential cost saving.


Figure 3.1 QC Capacity by BMT Estimate

comparing with DPW Target


References of Yard Crane Capacity


To evaluate the capacity created by yard cranes, benchmark ratio of single yard crane’s Capacity TEUs per Yard Hectare is

researched through DPW’s ports in the region, and world average by Dewry Research is also considered.

References

• Based on the reference research the capacity TEUs

per yard hectare is about 1,500 TEUs/ha*.

• Further review on DPW’s port portfolio was

conducted, which shows that this ratio for DPW Asia

ports is 1,780 TEUs/ha on average..

• TPS existing yard crane capacity is about 1,600

TEUs/ha, which is applied in the analysis.

Source: *Drewry Research and BMT analysis

Figure 3.2 Yard Crane Capacity Benchmarks


Review of Yard Crane Capacity Supply


Capacity Review

• Similarly, by applying the estimated ratio of capacity

TEUs per yard hectare with DPW’s proposed

number of yard crane, the capacity of yard crane is

estimated. The results are shown in Figure 3.3.

• Throughout the project period, the difference of BMT

and DPW estimated yard carne handling capacity is

in the range of 3-7%, which is considered

reasonable.

• The small difference may be caused partially by the

different timing of installing the RTG.

Comments

• In summary, the proposed yard crane investment by

DPW is considered reasonable.

Figure 3.3 Yard Crane Capacity by BMT Estimate

comparing with DPW Target


Summary of Crane Capacity Plan Review


5 WL

7 SL

6 WL

7 SL

9 WL

4 SL

10 WL

3 SL

Figure 3.4 Quay Crane Capacity Review

35

RTG

30

RTG

33

RTG

38

RTG

38

RTG

38

RTG

38

RTG

Figure 3.5 Yard Crane Capacity Review

It is considered that the quay crane investment plan proposed by DPW may provide higher handling capacity (~ 0.18mn

TEUs p.a.) than what is anticipated by DPW, equivalent to a saving of one single-lift Post-Panamax crane.; meanwhile, the

yard crane investment plan is considered to be within a reasonable range (~ 3%) of difference.

11 SL 5 WL

8 SL

6 WL

8 SL

9 WL

5 SL

10 WL

4 SL

Number of QCs as proposed by DPW

Number of QCs as advised by BMT

11 SL

Number of RTGs as proposed by DPW

Number of RTGs as advised by BMT

30

RTG

38

RTG

38

RTG


Tariff and Cost Estimates

4. Tariff and Cost Estimates

As stated in Chapter 3, Pelindo III has yet received the updated CAPEX breakdown data to be provided by TPS/DPW. However, the assessment is

conducted based on the preceding findings and the data / files received.

The revenue and cost estimations at various benchmarking years are shown in this Chapter. Yearly figures are included in a separate excel file of

“TPS Revenue and Cost Estimations”.


Tariff Review


Historical Data at TPS

• Port stevedoring tariff of TPS in 2005, 2008, 2011, 2013 and 2014 were reviewed based on “HISTORI TARIF” received on 08 Dec

2015.

• The stevedoring tariffs are categories in International / Domestic, Laden / Empty and 20’ / 40’ / 45’.

• It is worth noting that the tariff for international containers is charged in USD; while the tariff for domestic is charged in Indonesian

Rupiah.

• Other revenue items mainly include yard storage services, lift on / off services and ancillary services.

Container loading service -

International (USD/Box) TPS JICT

Laden

20' FCL 82 83

40' FCL 123 125

45' FCL 154 156

20' LCL 155 157

40' LCL 233 235

45' LCL 291 293

Empty

20' 62 62

40' 92 93

45' 115 117

Table 4.1 Comparison of Tariff between TPS and JICT Growing Trend of Port Tariff

To estimate the future trend of tariff at TPS, the following

aspects are reviewed.

• Historical trend shows an around 2% CAGR of tariff for

international container handling from 2005 to 2014.

• For domestic container handling, the CAGR was

around 7%. This higher CAGR mainly reflected a high

local inflation rate of 6.5% in the past several years.

• Tariffs at benchmarking ports such as Tanjung Priok

were reviewed. TPS is now charging at a similar level

to Tanjung Priok.

Source: Pelindo III and BMT



Expected Revenue

Tariff and Revenue Forecast

The tariff at TPS is expected to continue its growing

trend mainly because:

• New ports / terminals coming into market may pose

some pressure on tariff setting.

• Improved physical conditions at TPS (mainly through

deepened draft and upgraded cranes) may level up

the attractiveness of TPS.

Hence, tariff at TPS is assumed as follows:

• For international container cargo, stevedoring tariff

for container stevedoring (in USD) is expected to

grow at 2% p.a..

• For domestic container cargo, stevedoring tariff for

container stevedoring (in IDR) is expected to grow at

5% - 6% p.a. reflecting a lowered inflation level of 4%

to 5% p.a. in the future.

• For Storage and Lift on/off, the tariff is expected to

grow at 2% p.a..

The forecast result of revenue at TPS is summarised in

the Figure and Table on the RHS.

million USD 2015 2020 2025 2030 2035 2040

Revenue 145 201 273 322 361 405

Figure 4.1 Revenue Forecast of Handling International and

Domestic Container Cargo at TPS

Note: assume 11% ancillary revenues generated from other revenue sources such as other cargo

services based on TPS historical data.

It is notable that some container cargo are handled by vessel crane and there will be a discounted tariff

for stevedoring service. Based on historical revenue and throughput data, a 9% discount on tariff is

applied in the revenue projection.

According to the local transportation regulation, the increase of tariffs occurs at every 2~3 years, for the

ease of analysis, BMT applied an annual compound growth rate for tariffs.

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

2015 2020 2025 2030 2035 2040

‘000 U

SD


Key CAPEX Items


Civil works:

▪ Dredging

▪ Fender replacement

▪ Wharf repair

▪ Miscellaneous civil &

installation maintenance

Capital Expenditure (CAPEX)

Equipments:

▪ Quay cranes *

▪ Rail mounted gantry cranes

▪ Head truck

▪ Dollies

▪ Chassis/Spreader *

▪ Empty handler

▪ Research Stacker

Others:

▪ IT systems

▪ Other miscellaneous capex

▪ Refurbishment QC

▪ Electrification

▪ Refurbishment RTG

▪ Ordinary Refurbishment

▪ Base on “CAPEX_TPS rev_101215.xlsx” received on 10 Dec 2015, the key capital cost items in the TPS improvement plan

are summarised as below:

▪ As analysed in Chapter 3, the number of quay cranes purchase in TPS plan may be ~ 7-8% higher (equivalent to 1 single lift

crane) than what is required. This has been subsequently considered in the cost estimation.

▪ In addition, the purchase of chassis/spreaders, a minor item, is also considered over-estimated. This is also adjusted in the

cost estimation.


Key CAPEX Assumptions


Key Cost Items Unit Unit Cost Total Number

(as of 2040)

Quay Cranes (QC) 000 USD/pcs 6,600~10,700 13

Rubber Tyred Gantry Cranes

(RTGC) 000 USD/pcs 1,240 38

Reach Stacker 000 USD/pcs 580 3

Empty Handler 000 USD/pcs 300 5

Headtrucks 000 USD/pcs 125 99

Dollies 000 USD/pcs 25 83

Chassis 000 USD/pcs 44 155

Unit Cost

As summarised in the Table on the RHS,

unit costs of the key CAPEX items are

based on references of:

• Past BMT port development projects;

• International port dredging contracts;

• International equipment suppliers.

Key Assumptions

• Total number required has considered

the results of the Capacity Plan

Assessment in Chapter 3;

• Purchase and installation of quay

canes are assumed to last for 3 years;

while RTGCs will last for 2 years.

• The replacement of equipments is

based on asset lifespan.

• It is assumed that the inflation rate for

equipment and capital expenses is

2% p.a..

Table 4.2 Unit Cost and Total Number Estimated by BMT

Source: BMT


CAPEX Estimations


Summary

The accumulated CAPEX from 2015 to

2020 is expected to be around US$ 212 M;

it is expected to reach US$ 590 M in 2040.

The procurement of equipment accounts

for above 50% of the total CAPEX. Civil

work and facilities maintenance accounts

for about 19% of the total CAPEX.

Quay crane, RTGC, Refurbishment QC

are key cost items which account for 24%,

16% and 11% respectively in the total

CAPEX.

Accumulated

CAPEX

(mn USD)

2015 2020 2025 2030 2035 2040

Civil works 7 49 68 82 101 115

Equipment 21 115 174 223 265 299

Others 3 48 72 105 145 176

Total 31 212 313 410 511 590

Figure 4.2 Capital Expenditure

0

100

200

300

400

500

600

700

2015 2020 2025 2030 2035 2040 m

n U

SD

Civil works and Facilities Maintenance Equipment Procurement Others


• Employee costs, estimated based on the scale of

port operation and calculated using unit cost per

TEU multiplied by port throughput.

• Material costs, mainly refers to the utility / energy

consumed for TPS operation. Estimation is mainly

based on the growth of port throughput.

• Maintenance costs, relates to the purchased and

installed CAPEX items. Historical data were

referenced.

• Depreciation and amortization, a range of 2% to

10% depreciation rate are applied subject to asset

life cycle.

• Rental costs, as explained by TPS/DPW, refers

to the insurance cost which is linked with CAPEX

items.

Operating Expenditure (OPEX)

• Biaya Sewa, as explained by TPS/DPW, refers to

cost of port facility, construction & equipment rent,

vehicle rent and labour rent. Estimated to increase

with port throughput growth.

• Cost community development, refers to the cost for

social activity allocation from 1% of net profit.

• Cost Contributions, equals to about 10% from total

revenue.

• Income Tax, accounts for 25% of Net Income (before

tax).

• Other costs, such as administration costs, general

costs, etc..


Key OPEX Items and Assumptions

▪ Base on the “COST INPUT TEMPLATE 8 DEC v1.xlsx” received on 9 Dec 2015, the key OPEX items of TPS improvement

plan are shown below. The OPEX estimations are mainly referenced to the historical data of 2013~2015. Key assumptions

are elaborated in the following figure.

Note: assume 4% to 6% inflation rate based on IMF forecast.


OPEX Estimations


Summary

• Overall OPEX is expected to steadily

increase at a CAGR of around 5% p.a.; from

IDR 886 billion in 2015 to IDR 3,863 billion in

2040.

• Upon completion of the improvement phase,

Biaya Sewa, employee and maintenance

costs will become the dominant cost items in

OPEX, which are around 22%, 15% and 13%

respectively.

• Depreciation costs is estimated to account for

around 7% of the total OPEX.

• As Maintenance, Rental Costs (i.e., insurance

costs) and Depreciation costs are mainly

linked with capital cost items, it is more likely

that these items will be settled in USD rather

than Indonesian Rupiah. These three items

generally account for 20% to 25% of the total

OPEX.

Billion IDR 2015 2020 2025 2030 2035 2040

OPEX 886 1,420 2,030 2,597 3,175 3,863

Figure 4.3 Operating Expenditure

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2015 2020 2025 2030 2035 2040

Bn ID

R

Employee costs Material costs Maintenance costs

Depreciation expense Rental costs Biaya Sewa

Cost Community Development Cost Contributions Other Costs


Summary

Tariff and Revenue Forecast

Tariff for international container handling

(in USD) is expected to grow by 2% p.a..

For domestic container cargo, port tariff

(in IDR) is expected to grow at 5% - 6%

p.a. reflecting a lowered inflation level of

4% to 5% p.a. in the future. For Storage

and Lift on/off, the tariff is expected to

grow at 2% p.a..

Total revenue of TPS is expected to

reach IDR 405 billion in 2040.

CAPEX Estimations

The accumulated CAPEX from 2015

to 2020 is expected to be around US$

212 million and US$ 590 million from

2015 to 2040.

The procurement of equipment

accounts for above 50% of the total

CAPEX. Civil work and facilities

maintenance accounts for about 19%

of the total CAPEX.


OPEX Estimations

Overall OPEX is expected to steadily

increase at a CAGR of around 5% p.a.;

from IDR 886 billion in 2015 to IDR 3,863

billion in 2040.

Upon completion of the improvement

phase, Biaya Sewa, employee and

maintenance costs will become the

dominant cost items in OPEX, which are

around 22%, 15% and 13% respectively.


Conclusion

5. Conclusion


Key Aspects to Review

6. Conclusion

• Cargo Demand Forecast

• Alternative Option

• The throughput of Tanjung Perak is expected to reach 4.6 million TEUs in

2020 and 9.3 million TEUs in 2030, with an growth rate of 5%-9% during 2015

to 2040.

• TPS is expected to handle 1.7 million TEUs in 2020, which is expected to

reach 2.2 million TEUs and stabilise in the long term.

• Concession Plan Review

• TPS has performed better than the major container terminals in Tanjung Priok,

which implies that DPW has been a good partner for Pelindo III to jointly

operate TPS continuously with.

• The analysis does not pre-empt the possibility that Pelindo III, if operating

alone at TPS, could achieve a productivity similar to that of jointly operating

with DPW. One should also consider the non-technical benefits of jointly

operating with international player.

• The overall improvement plan is reasonable in terms of crane upgrading /

purchasing. However, it is identified that there exist some opportunities for less

facilities to be required - the cost equivalent to one single-lift crane may be

saved.

• The CAPEX investment mainly arise from purchase / replacement of cranes.

Accumulated CAPEX from 2015 to 2040 is expected to be US$ 590 million.

57 Technical Commercial Assessments of TPS Concession Date: 22 Dec 2015

Thank You


DPW Forecast Review



Comparison of Tanjung Perak Forecasts The throughput forecast of DPW proposal was then compared against BMT’s forecast.


Comparison of the Throughput Forecasts for

Tanjung Perak

DPW’s forecast (updated version received on

18.12.2015) and PP3’s forecast in Masterplan

were reviewed and compared against BMT’s

forecast (2015~2040), it shows:

• PP3’s forecast of Tanjung Perak is generally in

line with BMT’s forecast results.

• The throughput forecast of Tanjung Perak in the

DPW Proposal is close to BMT’s forecast in the

short term (2015~2020), the difference is within

5%.

• In the medium to long term, DPW’s forecast is

around 14% lower than BMT forecast.

In short, DPW’s forecast for Tanjung Perak Port is

considered reasonable in the short term, but a

little conservative in the medium to long term.

Source: The Master Plan of Tanjung Perak Port, DPW Proposal

Comparison of

Throughput

Forecasts of

Tanjung Perak

to Year 2040

mn TEUs 2015 2020 2030 2040

BMT 3.1 4.2 9.7 19.0

DPW 3.1 4.2 7.4 12.1

PP3 3.5 5.0 9.8 --

Figure A.1 Comparison of DPW Forecast with BMT Forecast

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

mn

TE

Us

BMT DPW PP3

• In the long term, DPW’s result

is lower than BMT forecast.


0.0

0.5

1.0

1.5

2.0

2.5

2015 2020 2025 2030 2035 2040

mn

TE

Us

DPW Forecast

BMT Forecast

Comparison of TPS Forecasts The throughput forecast of DPW proposal was then compared against BMT’s forecast.

Forecast Comparison

Compare DPW’s forecast with BMT forecast of

TPS (2015~2040), the results show that:

• Throughput forecast between DPW and BMT

is very close before 2020.

• The growth of TPS throughput experienced a

slight slow down in DPW’s forecast. However,

according to the TPS capacity plan, additional

capacity is scheduled to be added in 2019.

Therefore, the terminal has capacity to handle

the growth of existing containerised cargos.

• BMT assumed that TPS can reach 85% to

90% utilisation in the long term.

• As a result, DPW’s forecast of TPS container

throughput is around 3% lower than BMT’s in

the short term (2015-2025), and about 5%

lower in the long term (2025-2040).

Overall, DPW’s throughput forecast for TPS is

considered reasonable.


Figure A.2 Comparison of DPW and BMT Forecast of TPS Throughput

Comparison of

Throughput

Forecasts of TPS

to Year 2040

mn TEUs 2015 2020 2030 2040

BMT initial forecast 1.4 1.7 2.1 2.2

DPW forecast 1.4 1.6 1.9 2.1

Growth rate of TPS

throughput is in line with

that of Tanjung Perak

throughput forecast.

it is assumed that TPS can

reach 85% to 90%

utilisation in the long term.

DPW’s forecast is 6%

lower than BMT

forecast in 2025- 2040.


Summary

Comparison of Tanjung Perak

Forecasts

The throughput forecast of Tanjung

Perak in the DPW Proposal is close to

BMT’s forecast in the short term

(2015~2025), within 5% difference.

In the medium to long term, DPW’s

forecast is around 14% lower than BMT

forecast.

DPW’s forecast for Tanjung Perak Port is

considered reasonable in the short term,

but a little conservative in the medium to

long term.

Comparison of TPS Forecasts

DPW’s forecast of TPS container

throughput is around 3% lower than

BMT’s in the short term (2015-2025),

and about 5% lower in the long term

(2025-2040).

For the whole period, the difference is

minor, about 5% lower than BMT

forecast.

Overall, DPW’s forecast for TPS is

considered reasonable.


Appendix BPwC Report

Valuation & Strategy

Project PortigaStrategic Review of Financing Strategy of Pelindo III in relation to PT Terminal PetikemasSurabaya's Joint Operating AgreementStrictly private

and confidential

22 December 2015

PwC

22 December 2015Strictly private and confidential

Draft

Triono SoedirdjoDirectorT: +62 (21) 528 91033M: +62 816 132 [email protected]

PricewaterhouseCoopers Indonesia AdvisoryPlaza 89, Jl. HR. Rasuna Said Kav. X-7 No.6, Jakarta 12940T: +62 21 5212901F: +62 21 52905555 / 52905050

Mr. Feb SumandarPT Bahana SecuritiesGedung Graha Niaga Lt. 21Jakarta

22 December 2015

Dear Sir,

This report (“Report”) has been prepared solely for PT Bahana Securities (“Bahana”) in connection with Strategic Review of Financing Strategy of Pelindo III in relation to PT Terminal Petikemas Surabaya (“TPS”)'s Joint Operating Agreement (“TPS JOA”). It has been prepared in accordance with our letter of engagement dated 24 September 2015 and the attached terms and conditions.

This Report has been prepared solely for the purposes stated herein, and should not be relied upon for any other purpose. This Report is strictly confidential and (save to the extent required by the applicable laws and/or regulations) must not be released to any third party without our express written consent, which is at our sole discretion.

Our Report is not intended to be the basis for investment decisions, and any action you take must ultimately remain a decision for you, taking into account matters outside the scope of our work of which you are aware.

To the fullest extent permitted by law, PwC accepts no duty of care to any third party in connection with the provision of this Report and/or any related information or explanation (together, the “Information”). Accordingly, regardless of the form of action, whether in contract, tort (including, without limitation, negligence) or otherwise, and to the extent permitted by the applicable law, PwC accepts no liability of any kind to any third party and disclaims all responsibility for the consequences of any third party acting or refraining to act in reliance on the Information.

2

Project Portiga

Contents

PwC


Draft 3

Project Portiga

PricewaterhouseCoopers Indonesia AdvisoryPlaza 89, Jl. HR. Rasuna Said Kav. X-7 No.6, Jakarta 12940T: +62 21 5212901F: +62 21 52905555 / 52905050

The information used by PwC in preparing this Report has been obtained from a variety of sources, as indicated within the Report. While our work has involved analysis of financial information and/or accounting records, it has not included an audit in accordance with generally accepted auditing standards. Moreover, except where otherwise stated in the Report, we have not subjected the financial information in the Report to checking or verification procedures.

Accordingly, we assume no responsibility and make no representations with respect to the accuracy or completeness of any information provided to us, except where otherwise stated herein, and no assurances are given.

Our conclusions are based upon the information available as at the date of the Report. Economic conditions, market factors and changes in the performance of the business may result in our conclusions becoming quickly outdated, and they may require updating from time to time or before any major decisions are taken based on the Report. In any event, if you intend to make any decision based on the Report more than three months from the Valuation Date, you must request our written confirmation as to the currency of our conclusions.

Our results depend on the projections for for TPS and Pelindo III. However, because events and circumstances frequently do not occur as expected, there will usually be differences between predicted and actual results, and those differences may be material. Accordingly, we express no opinion as to how closely the actual results achieved will correspond to those predicted for the TPS and Pelindo III, and we take no responsibility for the achievement of predicted results.

If you require any clarification or further information, please do not hesitate to contact myself on (+62 21 528 91033).

Yours faithfully,

Triono Soedirdjo

Director

Contents

PwC


Draft

At a glance 6

1 Incremental free cash flow analysis 10

1.1 Sensitivity analysis 14

1.2 Assumptions 15

1.3 NPV comparison 17

1.4 Qualitative analysis 18

2 Conclusion 21

3 Appendix 22

3.1 Financial covenants analysis 23

3.1.1 Self operate vs. Joint operate assumptions 24

3.1.2 Financial covenants 26

3.2 Incremental free cash flow to Pelindo III analysis 32

3.3 Discount rate calculation 65

3.4 Charts 69

3.5 Profit and loss projection of TPS 74

3.6 Balance sheet projection of TPS 139

3.7 Cash flow projection of TPS 172

Contents

4

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Contents

PwC


Status of Report

5

Project Portiga

Our work is not complete and still subject to change. As a result, this draft report may not represent our final findings or conclusion.

Contents

PwC


At a glance (1 of 4)

Background of the Engagement

You have requested PT PricewaterhouseCoopers Indonesia Advisory to provide you with assistance with Strategic Review on Financing Strategy of Pelindo III in relation to TPS-JOA. This report is intended only to you.

Scope of work

Please refer to our Engagement Letter dated 24 September 2015.

Sources of information

The information used by PwC in preparing this Report has been obtained from a variety of sources as indicated within the Report. While our work has involved analysis of financial information and/or accounting records, it has not included an audit in accordance with generally accepted auditing standards. Moreover, except where otherwise stated in the Report, we have not subjected the financial information in the Report to checking or verification procedures. Accordingly we assume no responsibility and make no representations with respect to the accuracy or completeness of any information provided to us, except where otherwise stated herein, and no assurance is given.

Approaches We have adopted the Discounted Cash Flow (“ DCF” ) specifically using the Free Cash Flow to Equity (“ FCFE” ) as the primary method which primarily draws upon cash flow forecasts from the period to date 30 September 2015 (“ PTD15” ) through to 2040.

Scenarios There are two scenarios namely the Self Operate and Joint Operate scenarios. In Self Operate, it is assumed that Pelindo III will not extend its cooperation with Dubai Port World (“ DPW” ) which is to expire in 2019. In Joint Operate, Pelindo III will extend the cooperation with a partner who may be DPW or a new partner in 2019.

Discount rate The discount rate used is 15% to 16% for all scenarios.

6

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Contents

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Key premises Our analysis was carried out on the basis of the following key premises:

• Throughput, Tariff and Capital expenditure (“ Capex” ): We refer to BMT for these assumptions. We assume Management can achieve the targeted revenue during the projected years and the capex projection is sufficient to meet the targeted revenue throughout the forecast period and committed as necessary.

• Costs: Operating expenses and overhead expenses have been estimated properly. We have not performed any technical review regarding the adequacy of the expenses.

• Margin: Management can obtain the assumed gross profit, earnings before interest, tax, depreciation and amortisation (“ EBITDA” ) margin during projections period.

• Other relevant regulations: Operations would not be impeded by regulations, the need for permits or environmental issues. There are no major changes in port regulations or any other actions made by the Government of Indonesia that could adversely affect Pelindo III and TPS’ s business. Scenario continue joint operation also assumes there will be no legal or approval issues that may deter the continuation of the joint operation.

• Upfront fees: Management can receive the indicative upfront fee of USD 250 million in 2016. Any deviation from this amount will have an impact on our analysis.

• Concession fee: Fixed and variable concession fees have been estimated properly and can be maintained throughout the projection period regardless of the amount of upfront fee.

• Agreement: Terms and conditions in all relevant agreements (i.e. Shareholder Agreement, Authorization Agreement, Loan agreements) are unchanged throughout the projection period.

• RJPP (Approved 5 years business plan): All figures have been approved. We do not perform any review on the calculation of the RJPP.

7

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Contents

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Sensitivity From these two scenarios, we have done a sensitivity analysis, they are:

NPV results From our analysis, joint operation contributes higher NPV compared to self operation in all scenarios.

8

Project Portiga



average historical % from revenue, overhead

expense based on inflationhead expense

based on inflation



average historical % from revenue, overhead

expense based on inflationhead expense

based on inflation

• BMT revenue, capex and cost calculation • BMT revenue, capex and cost calculation

• Revenue is lower by by 2% than no. 1


• Revenue is lower by by 2% than no. 1







1

3

5

7

2

4

6

8

4,418

5,006

3,053

4,233

4,293

4,948

4,679

5,129

3,053

4,233

4,946

5,334

3,416

4,462

4,803

5,267

5,248

5,478

5,248

5,478

2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000

1

2

3

4

5

6

7

8




Sen

sit

ivit

y


Legend:

Self operate

Joint operate

Contents

PwC



NPV results(cont’ d)

However, please note that for all joint operation sensitivity, the indicative upfront fee is assumed to be received in 2016 and amounted to USD 250 million. Any deviation from this upfront fee amount and timing will have an impact on our analysis.

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Contents

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Incremental free cash flow analysis

10

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1 Incremental free cash flow analysis Contents

PwC


Scenario options comparison (1 of 3)

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1 Incremental free cash flow analysis

SELF OPERATE CONTINUE JOINT OPERATE

*) This assumes continuation of joint operation agreement with similar terms

Pelindo III

TPS

Royalty and Annual Payment

Dividend and

Management fee until

2019 only

Partner

Asset Buyback in 2019

Bank

Principal and Interest

Payment

FinancingPelindo III

TPSDividend to

Partner

Partner Royalty and Annual Payment

Upfront Fee

Also pays transaction cost

Asset Buyback in 2040*

Management Fee

Contents

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12

Project Portiga


Upfront fee (“UPF”)

Royalty and annual

payment

“Asset Buyback”

Transaction Cost

Capex

“Share Buyback”

Option A –Self operation

Option B –Continue joint operation*

Indicative (USD 250mn equivalent pre-tax), proposed by Pelindo III Management*

Authorization Agreement and DPW proposal

Calculated payment for shares based on the

Authorization Agreement

Benchmark of the similar transaction

TPS, reviewed by BMT

Shareholder Agreement

Source of information

Management fee to partner

Management information(indicative)

Finance for Pelindo III Capex

Debt amount to follow upfront fees amount. Interest rates

based on benchmarking.

N.A.Nil because the agreement

has run full term in 2019

1.0% of the upfront fee

N.A.

N.A. IDR 2.9 trillion (post tax)

IDR 834,979 million in 2019

Funded from upfront fee + interest saving

IDR 2.9 trillion debt raised (post tax UPF) + interest

payment

USD 31,200 fixed per month until 2019 and N.A. after 2019

Notes:• N.A = Not applicable• For the purpose of calculation

assumptions for option B, we assume DPW will continue the joint operation.

• Tax impact has been provisionally estimated in the financial model, but proper tax review needs to occur.

• The amount of debt raised for Self operate scenario is assumed equal to post-tax upfront fee received in Joint operate scenario to ensure comparability.

• The interest rates assumed are 4.99% for USD commercial loan and 11.5% for IDR commercial loan. 5 years repayment is assumed.

• Upfront fee may changes subject to further negotiation and tender process. Any deviation from this amount will impact our analysis.

• All figures are indicative, subject to further review, discussion, negotiation and all required process and approvals.

USD 2.8 mil + 10% of gross revenue. Net off within consolidated cash flow.

Same for both scenarios Same for both scenarios

USD 31,200 fixed per month

Dividend to partner

TPS Management proposal based on average historical

formula

49% of 80% of net income of TPS, or the available free cash flow whichever is lower until 2040, plus 49% of the remaining cash

balance at the end of 2040.

-

+

-

-

-49% of 80% of net income of TPS,

or the available free cash flow, whichever is lower until 2019,

plus 49% of the remaining cash balance at the end of 2019.

-

USD 2.8 mil + 10% of gross revenue. Net off within consolidated cash flow.

IDR 652,827 million in 2040-

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13

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Capex of Pelindo III is funded by the upfront fee which gives interest savings to the company, as the company reduces its USD loan. For simplicity purposes, interest saving is only for one year. We have not calculated the monthly calculation for interest saving.

In Self Operate scenario, the company needs additional financing to fund the capex of Pelindo III.

1,513,167 1,369,833

-1,513,167 -1,369,833

-

-51,040 -134,389 -140,976 -92,869 -46,311 -11,419

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2015 2016 2017 2018 2019 2020 2021

Cash

flo

w (

IDR

Mil

lio

n)

Period

Self Operate

Cash inflow from borrowings Capex Interest payment

2,883,000

-1,513,167 -1,369,833

57,756

(2,000,000)

(1,500,000)

(1,000,000)

(500,000)

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2015 2016 2017 2018 2019 2020 2021

Cash

flo

w(I

DR

Mil

lio

n)

Period

Continue Joint Operate

Cash inflow from upfront fee Capex Interest savings

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Sensitivity analysis

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1.1 Sensitivity analysis

• We have performed several sensitivity scenarios as listed in the table below.

• In order to analyse how sensitive the revenue and cost of the company, we conducted a sensitivity analysis where the company’s revenue is lower by 2.0% and the overhead cost is higher by 2.0%

• Furthermore, we also conducted a sensitivity analysis on the forecasted long term throughput by BMT. BMT forecasted that the long term TPS throughput will be 2.2 million TEUs. We made a sensitivity as per Management’s request that TPS throughput will reach 2.5 million TEUs in the long run. We have not assumed any negative impact to TPS from the possible lost of revenues due to competition from Teluk Lamong.

• Below is the summary of the sensitivity scenarios:


























1

3

5

7

2

4

6

8

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Financial model assumption for Sensitivity 1 and 2(1 of 2)

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1.2 Assumptions

General assumptions

• Working capital: The assumption below shows Account Receivables (“AR”) and Account Payables (“AP”) days used in the model. They are normalised based on historical days, but in the long run, they are 18 and 45 days respectively.

• Dividend payout ratio: This is calculated based on 80% of net income of TPS or the available equity free cash flow, whichever is lower.

• Inflation: The IDR inflation forecast is based on EIU forecast as at 14 October 2015. The forecast is as follows:

• Exchange rate: The exchange rate forecast is based on EIU forecast as at 14 October 2015. From 2020 onwards we use Purchasing Power Parity (“PPP”) based on the relativity to inflation rate. The forecast is as follows:

• Tax rate: The Corporate Income Tax (“CIT”) is assumed at 25.0%.

• Discounting period: We have applied a mid-year discounting period for our valuation. We believe that this method is appropriate since cash flows are assumed to be received or spent throughout the year. Therefore, mid-year discounting reflects the actual conditions.

• Discount rate (Ke): The discount rates assumed are in the range of 15.0% to 16.0% for both scenarios.

• Projection period: Free cash flows are projected for 25 years until 2040 for both scenarios.

Revenue assumption

• We refer to tariff and throughput assumptions by BMT as the technical consultant.

Working Capital 2015 2016 2017 2018 2019 2020 2021 2022 2023-2040

AR terms 15 16 17 18 18 18 18 18 18

AP terms 11 12 15 18 24 30 35 40 45

Assumption 2015 2016 2017 2018 2019 2020-Onwards

Exchange Rate 13,578 15,376 14,675 13,609 13,179 PPP

Assumption 2015 2016 2017 2018 2019-Onwards

IDR Inflation rate 6.7% 6.5% 5.8% 5.6% 5.4%

USD Inflation rate 0.3% 1.7% 2.3% 2.5% 2.0%

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Financial model assumption for Sensitivity 1 and 2(2 of 2)

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1.2 Assumptions

Cost assumptions

• Management divides operational cost in the model into two categories, which are operating (“Opex”) and overhead expenses. Below are the detailed assumptions for each category.

• Opex. Based on the view of Pelindo III’s management, opex is assumed as semi-variable/variable cost. We assume all operating expenses are variable as a percentage to revenue. Below are the detailed assumption for opex based on average historical percentage to revenue.

• Overhead cost. Based on the view of Pelindo III’s Management, costs included in overhead cost are assumed fixed. The increase in the overhead cost is assumed to follow the inflation rates.

No Opex % to Revenue

1 Payroll

Sub-contracted/Outsourced Labours 5.0%

Operations 3.1%

Engineering 0.3%

2 Equipment Repairs & Maintenance 4.6%

3 Equipment Hire 0.8%

4 Fuel (Gas & Oil) 5.2%

5 Electricity & Water 1.1%

6 Security Charges 0.04%

7

Other Operation Expenses (e.g.

Cleaning, waste disposal,

consumbles etc.)

0.1%

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Net present value (“NPV”) results

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1.3 NPV comparison

• NPV is shown as a range for each sensitivity case due to the use of discount rates range (low and high)

• From the sensitivity analysis, joint operation contributes higher NPV compared to self operation in most scenarios.

• This is principally contributed by upfront fee received in 2016. If the upfront fee is lower than assumed, it will affect the analysis result. In our current analysis for sensitivity 1 and 2, any upfront fee less than USD 203 million or IDR 3.1 trillion will result in NPV of joint operate scenario to be lower than self operate scenario.

• The major NPV difference for scenario 3 to 4 is due to the assumption of the same upfront fee as other joint operate scenarios, with lower dividend paid due to lower net income.

• The NPV difference from scenario 1 to 5 will be much higher than the delta from 2 to 6 in the case of greater revenue shortfall and cost increment. This is due to joint operations scenario which have the same upfront fee even when revenue is reduced or cost is increased. But in self operate scenario, Pelindo III loses a lot more dividend income if revenue is reduced or cost is increased.


























1

3

5

7

2

4

6

8

4,418

5,006

3,053

4,233

4,293

4,948

4,679

5,129

3,053

4,233

4,946

5,334

3,416

4,462

4,803

5,267

5,248

5,478

5,248

5,478

2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000

1

2

3

4

5

6

7

8




Sen

sit

ivit

y


Legend:

Self operate

Joint operate

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Self operate qualitative analysis

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1.4 Qualitative analysis

Pros

• Avoid paying equity returns to international operator after 2019 (but this only applies if Pelindo III believes international operator would not deliver better financial performance);

• Full control of dividend disbursement.

Cons

• High transaction costs (repurchase of fixed assets from TPS);

• No external investor to fund the capex. Issues whether Pelindo III’s own cash flow enough to finance the capex or Pelindo III need to find external source of fund, such as loans or bonds (involves interest payment);

• Possible debt covenant issues of raise financing from third parties (subject to bank loan, bond agreements and other contractual agreements

• Pelindo III remains exposed to full commercial risk.

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Joint operate qualitative analysis (1 of 2)

19

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Pros

• Avoid buyback costs (repurchase of fixed assets from TPS);

• Financial commitment to ensure strong financial capacity of PelindoIII to fulfil capex plan requirement;

• Benefit of a contract with a global operator;

• Availability of fund: obtain the upfront fee to finance the capex;

• Pelindo III is partly protected from commercial risk;

• Preserve debt capacity.

Benefits which Management sees of a cooperation with a global

operator

• Access to international best practices and knowledge transfer;

• Relationships with global shipping companies;

• Accountability and monitoring of terminal management by global board with more experience and an ability to benchmark performance around the world;

• Financial discipline and controls imposed by international investors and global banks

• Financial transparency due to due diligence carried out at time of bidding for/signing contract;

• Education for safety and security of business process (international standards/best practice).

Cons

• Dividend payment to operator will still exist after 2019;

• Less flexibility in dividend disbursement.

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Joint operate qualitative analysis (2 of 2)

20

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Potential benefits in the future of a cooperation with a global

operator

• Use of latest technology and systems;

• Better global market knowledge;• Purchasing power with suppliers.

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Conclusion

21

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2 Conclusion

Incremental free cash flow analysis

• Based on incremental FCFE analysis, Joint operate scenario contributes higher NPV than the Self operate scenario.

• In the Self operate scenario, the Government owns 100% of the risk in Pelindo III’s investment projects. In the Joint operate scenario, TPS will have access to DPW or other partner’s global experience of delivering many such projects.

• In the Joint operate scenario, Pelindo III has less flexibility in setting the dividend policy as it must be agreed by both parties, however, it will be more flexible for Self operate scenario.

• Moreover, Pelindo III is protected from commercial risk in Joint operate scenario by having the risk shared to both parties.

• For self operate scenario, the possibility to raise capex finance from bank loan or bond could be prohibited by ECA covenant breach unless consent/waiver is received from Deutsche Bank London.

Disclaimer:

1. We did not perform any review on BMT or Management assumptions;

2. We assume average loan balance to calculate interest expense;

3. Working capital is calculated based on accounts receivable, accounts payable and inventory calculated by Management in RJPP. We did not perform any review on those accounts;

4. Upfront fee is assumed to be received in 2016. The amount of upfront fee is uncertain, however, Management estimates an upfront fee of USD 250 million (indicative);

5. The free cash flow from TPS PTD 2015-FY 2019 is not summed in the incremental cash flow in Pelindo III as according to Management this refers to the previous cooperation period;

6. Our working model and analysis are based on data and assumption as of now and still subject to change upon receipt of additional information and assumption, as well as further review, discussion, negotiation and required approvals.

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Appendix

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3 Appendix Contents

PwC


Financial covenants analysis

23

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3.1 Financial covenants analysis Contents

PwC


24

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3.1.1 Self operate vs. Joint operate assumptions

Financial Ratio Covenants Analysis in Pelindo III (1 of 2)

• During 2014 – 2019, Management of Pelindo III viewed that the company requires a total of IDR 23.4 trillion investment for the development of Pelindo III and its subsidiaries, including PT Terminal Petikemas Surabaya (“TPS”), which splits into USD and IDR with proportion of 47.1% and 52.9% respectively. This proportion is calculated from capex data in the company’s 2016 annual budget plan (RKAP) and we use this as a proportion reference for the remaining projected years.

• In its approved 5 years long term plan, Management of Pelindo III forecasts the need of a total of additional IDR 8.5 trillion in order to finance the capex until the end of contract period in 2019. Pelindo III then divided the financing into two phases:

• We performed financial covenants analysis based on RJPP for PelindoIII provided by Management until FY2019 to analyse whether the covenants will be breached if the additional financing is derived from bank loan or bond. We did not perform any review on projection assumption in RJPP.

2015 F 2016 F 2017 F 2018 F 2019 F

Loan withdrawn

(IDR million) - 4,000,000 4,500,000 - -

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25

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3.1.1 Self operate vs. Joint operate assumptions

Financial Ratio Covenants Analysis in Pelindo III (2 of 2)

• Below are the four financing alternatives based on the source of financing with their respective currencies as follows:

• The total additional loan raised for all scenarios is IDR 8.5 trillion.

• Below are the details of interest rate we assume for each source of financing:

• Following RJPP, no loan repayment is assumed in all scenarios for period 2015-2019.


Scenarios USD IDR

Scenario 1 Global Bond Corporate Bond

Scenario 2 Global Bond Commercial loan

Scenario 3 Commercial Loan Corporate Bond

Scenario 4 Commercial Loan Commercial loan

Interest rates USD IDR Source

1 . Corporate Bond N.A. 1 0.0%Av erage interest from

comparable companies bond

2. Global Bond 5.4% N.A.Pelindo II Global Bond interest

benchmark

3 . Commercial Loan 4.99% 1 1 .5%Av erage interest from

commercial banks

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Financial covenants

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3.1.2 Financial covenants

List of existing interest bearing liabilities at Pelindo III level according Management and RJPP 2015-2019

− Export Credit Agency (“ECA”)

• Facility A: USD 62,913,953

• Facility B: USD 58,327,918


− Global bond


ECA financial covenants

− Leverage: Net debt/EBITDA

• maximum of 3.00 x (refer to ECA agreement page 52 and ECA amendment page 4)

− Gearing: Net debt/equity

• maximum of 2.00 x (refer to ECA agreement page 53)

− Interest coverage: EBITDA/Debt service


− Debt service coverage: EBITDA/Finance charges and scheduled repayments of borrowings


Global bond financial covenants

Pelindo III’s current global bond does not have financial ratio covenants.

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27

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Financial covenantsSummary

ECA financial covenants breach summary

Leverage:

Net Debt/

EBITDA

Gearing:

Net Debt/

Equity

Interest

coverage

Debt service

coverage

Scenario 1: Global bond (USD) and Corporate bond

(IDR) Yes No No No

Scenario 2: Global bond (USD) and Commercial loan

(IDR) Yes No No No

Scenario 3: Commercial loan (USD) and Corporate

bond (IDR) Yes No No No

Scenario 4: Commercial loan (USD and IDR) Yes No No No

− It is evident from the table above that under all debt fnancingscenarios, Pelindo III will breach Net debt/EBITDA covenant during FY 2016 due to additional funds required for the capex.

− As we have not done a monthly calculation, we do not analyse the date or month when the covenants will be breached. If Management could not raise the financing timely, Management needs to manage the cash flow (e.g. by delaying capex, cost efficiency, etc.).

− This covenant will also be breached if no additional debt is raised and capex is reduced. Net debt/EBITDA ratio also indicates the financial performance of the company. The high level of Net debt/EBITDA of Pelindo III shows the company has weak financial performance, thus it is important for Pelindo III to be able to manage this ratio.


− This indicates that, in the debt financing scenario, PelindoIII needs an equity injection (e.g. through PenyertaanModal Negara/PMN/ Government equity injection) for the total of needed funds or renegotiation of covenants (including obtaining waiver) with loan issuer.

− Other possible scenario to raise financing (partly) is by continuing the joint operation agreement which assumed the upfront fee to be received in 2016.

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Financial covenantsScenario 1: Global bond (USD) and Corporate bond (IDR)

28

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Contents

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Financial covenantsScenario 2: Global bond (USD) and Commercial loan (IDR)

29

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Contents

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Financial covenantsScenario 3: Commercial loan (USD) and Corporate bond (IDR)

30

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Contents

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Financial covenantsScenario 4: Commercial loan (USD and IDR)

31

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Contents

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Incremental free cash flow to Pelindo III analysis

32

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3.2 Incremental free cash flow to Pelindo III analysis Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 1: Self operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 4)

33

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3.2 Incremental free cash flow to Pelindo III analysis

3 Months 12 Months 12 Months 12 Months 12 Months 12 Months 12 Months 12 Months

Free cash flow to Equity ("FCFE") of TPS 2015 2016 2017 2018 2019 2020 2021 2022

Net income IDR in mil 67,566 846,286 842,660 842,064 896,818 999,883 1,112,791 1,216,749

Depreciation IDR in mil 40,384 142,237 199,006 233,488 241,006 262,565 283,029 304,698

Changes in working capital IDR in mil (7,360) (12,973) (5,658) (3,010) 614 3,933 4,363 5,573

Capital expenditure IDR in mil (279,628) (603,500) (715,797) (557,920) (332,268) (361,205) (382,054) (292,795)

Net borrowings IDR in mil - - - - - - - -

FCFE IDR in mil (179,039) 372,050 320,211 514,622 806,171 905,176 1,018,128 1,234,226


Incremental cash flow to Pelindo III 2015 2016 2017 2018 2019 2020 2021 2022

FCFE of TPS 905,176 1,018,128 1,234,226

(+) Upfront fees (net off tax) - - - - - - - -

(+) Interest saving from upfront fees - - -

(+) Change in net borrowings to Pelindo - 1,210,533 799,735 (550,836) (543,065) (551,004) (365,363) -

(-) Interest (minus 25% tax shield) - (38,280) (100,792) (105,732) (69,652) (34,733) (8,564) (0)

(-) Tender cost -

(-) Dividend to partner (gross of witholding tax) (53,739) (182,305) (156,903) (252,165) (351,553) - - -

(-) Dividend contribution to partner at the end

of cooperation (gross of witholding tax) - - - (303,240) - - -

(-) Asset buyback - - - - (834,979) - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil (53,739) 989,949 542,040 (908,733) (2,102,489) 319,439 644,202 1,234,226

Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367

Present value of FCFE (52,752) 885,665 418,051 (604,194) (1,205,081) 157,838 274,403 453,214

High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389


IDR in millions Low High

NPV of incremental FCFE (2015F - 2040F) 4,417,699 4,945,627

NPV of incremental FCFE 4,417,699 4,945,627

Mid NPV of incremental FCFE 4,681,663

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34

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Net income IDR in mil 1,306,539 1,438,995 1,579,808 1,752,796 1,897,395 2,049,419 2,061,687 2,156,659


Changes in working capital IDR in mil 8,432 1,149 (5,945) (5,441) (5,708) (5,389) (234) (3,265)



FCFE IDR in mil 1,523,570 1,515,618 1,414,921 1,432,951 1,807,448 2,232,523 2,012,280 2,308,913



FCFE of TPS 1,523,570 1,515,618 1,414,921 1,432,951 1,807,448 2,232,523 2,012,280 2,308,913


(+) Interest saving from upfront fees

(+) Change in net borrowings to Pelindo - - - - - - - -

(-) Interest (minus 25% tax shield) (0) (0) (0) (0) (0) (0) (0) (0)

(-) Tender cost

(-) Dividend to partner (gross of witholding tax) - - - - - - - -


of cooperation (gross of witholding tax) - - - - - - - -

(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 1,523,570 1,515,618 1,414,921 1,432,951 1,807,448 2,232,523 2,012,280 2,308,913

Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112

Present value of FCFE 482,295 413,602 332,864 290,608 315,998 336,478 261,451 258,614

High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






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35

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Changes in working capital IDR in mil (3,422) (3,586) (3,760) (3,942) (4,134) (4,335) (4,547) (4,771)



FCFE IDR in mil 2,213,036 2,225,651 2,410,575 2,455,077 2,690,891 2,906,193 2,560,530 3,285,199



FCFE of TPS 2,213,036 2,225,651 2,410,575 2,455,077 2,690,891 2,906,193 2,560,530 3,285,199





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






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36

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12 Months 12 Months

Free cash flow to Equity ("FCFE") of TPS 2039 2040

Net income IDR in mil 3,162,958 3,334,514

Depreciation IDR in mil 473,463 453,799

Changes in working capital IDR in mil (5,006) (5,253)

Capital expenditure IDR in mil (569,179) (87,292)

Net borrowings IDR in mil - -

FCFE IDR in mil 3,062,237 3,695,767

12 Months 12 Months

Incremental cash flow to Pelindo III 2039 2040

FCFE of TPS 3,062,237 3,695,767

(+) Upfront fees (net off tax) - -


(+) Change in net borrowings to Pelindo - -

(-) Interest (minus 25% tax shield) (0) (0)

(-) Tender cost

(-) Dividend to partner (gross of witholding tax) - -


of cooperation (gross of witholding tax) - -

(-) Asset buyback - -

(-) Share buyback - -

Incremental FCFE to Pelindo III IDR in mil 3,062,237 3,695,767

Time factor 23.75 24.75

Low

Ke 16.0% 16.0%

Discount factor 0.029 0.025

Present value of FCFE 90,191 93,836

High

Ke 15.0% 15.0%







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Incremental free cash flow to Pelindo III analysisScenario 2: Joint operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 4)

37

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FCFE IDR in mil (179,039) 372,050 320,211 514,622 806,171 901,730 1,014,269 1,230,233



FCFE of TPS 901,730 1,014,269 1,230,233

(+) Upfront fees (net off tax) - 2,883,000 - - - - - -

(+) Interest saving from upfront fees - 57,756 -


(-) Interest (minus 25% tax shield) - - - - - - - -

(-) Tender cost (38,440)

(-) Dividend to partner (gross of witholding tax) (53,739) (182,305) (156,903) (252,165) (351,553) (390,455) (434,665) (475,365)


of cooperation (gross of witholding tax) - - - - - - -

(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil (53,739) 2,662,255 (99,147) (252,165) (351,553) 511,274 579,604 754,868

Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367

Present value of FCFE (52,752) 2,381,805 (76,468) (167,658) (201,499) 252,626 246,887 277,191

High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389






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FCFE IDR in mil 1,519,446 1,511,320 1,410,440 1,428,321 1,802,663 2,227,578 2,007,171 2,303,634



FCFE of TPS 1,519,446 1,511,320 1,410,440 1,428,321 1,802,663 2,227,578 2,007,171 2,303,634





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 1,008,937 948,943 792,921 743,050 1,060,770 1,426,155 1,201,003 1,460,304

Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






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FCFE IDR in mil 2,207,580 2,220,014 2,404,749 2,449,057 2,684,671 2,899,765 2,553,888 3,278,335



FCFE of TPS 2,207,580 2,220,014 2,404,749 2,449,057 2,684,671 2,899,765 2,553,888 3,278,335





(-) Tender cost

(-) Dividend to partner (gross of witholding tax) (874,998) (910,386) (949,589) (990,169) (1,034,376) (1,082,982) (1,128,427) (1,183,371)



(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






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40

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12 Months 12 Months







FCFE IDR in mil 3,055,144 3,688,439

12 Months 12 Months


FCFE of TPS 3,055,144 3,688,439




(-) Interest (minus 25% tax shield) - -

(-) Tender cost

(-) Dividend to partner (gross of witholding tax) (1,237,085) (1,304,241)


of cooperation (gross of witholding tax) - (4,689,880)

(-) Asset buyback - (652,867)


Incremental FCFE to Pelindo III IDR in mil 1,818,060 (2,958,550)


Low

Ke 16.0% 16.0%


Present value of FCFE 53,546 (75,118)

High

Ke 15.0% 15.0%







Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 3: Self operate - BMT revenue, capex and cost calculation (1 of 4)

41

Project Portiga




Net income IDR in mil (99,481) 730,213 697,768 659,853 657,055 731,242 821,975 896,456


Changes in working capital IDR in mil 3,912 (12,852) (965) 3,916 11,062 17,829 18,747 20,877



FCFE IDR in mil (357,850) 192,340 80,727 211,439 453,402 514,872 591,094 770,909



FCFE of TPS 514,872 591,094 770,909





(-) Tender cost -




(-) Asset buyback - - - - (834,979) - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil (31,835) 1,078,007 659,387 (760,173) (1,929,633) (70,865) 217,168 770,909

Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367

Present value of FCFE (31,250) 964,447 508,556 (505,421) (1,106,005) (35,015) 92,504 283,082

High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389

Present value of FCFE (31,284) 970,730 516,320 (517,599) (1,142,504) (36,485) 97,226 300,119





Contents

PwC



42

Project Portiga




Net income IDR in mil 977,454 1,090,496 1,215,753 1,324,448 1,446,866 1,614,075 1,602,268 1,697,350


Changes in working capital IDR in mil 22,075 12,175 61 767 (391) (6,628) 5,570 (1,484)



FCFE IDR in mil 1,042,064 1,002,674 865,121 866,495 1,218,732 1,663,464 1,413,345 1,705,213



FCFE of TPS 1,042,064 1,002,674 865,121 866,495 1,218,732 1,663,464 1,413,345 1,705,213





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 1,042,064 1,002,674 865,121 866,495 1,218,732 1,663,464 1,413,345 1,705,213

Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






Contents

PwC



43

Project Portiga






Changes in working capital IDR in mil (1,179) (1,418) (1,904) (742) (1,904) (2,648) (1,246) (3,387)



FCFE IDR in mil 1,601,191 1,607,687 1,790,080 1,826,972 2,059,777 2,277,915 1,924,946 2,655,645



FCFE of TPS 1,601,191 1,607,687 1,790,080 1,826,972 2,059,777 2,277,915 1,924,946 2,655,645





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






Contents

PwC



44

Project Portiga


12 Months 12 Months







FCFE IDR in mil 2,433,170 3,082,667

12 Months 12 Months


FCFE of TPS 2,433,170 3,082,667





(-) Tender cost








Low

Ke 16.0% 16.0%



High

Ke 15.0% 15.0%







Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 4: Joint operate - BMT revenue, capex and cost calculation (1 of 4)

45

Project Portiga




Net income IDR in mil (99,481) 730,213 697,768 659,853 657,055 731,242 821,975 896,456


Changes in working capital IDR in mil 3,912 (12,852) (965) 3,916 11,062 17,829 18,747 20,877



FCFE IDR in mil (357,850) 192,340 80,727 211,439 453,402 514,872 591,094 770,909



FCFE of TPS 514,872 591,094 770,909









(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil (31,835) 2,750,314 18,200 (103,605) (222,167) 262,585 301,458 419,499

Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367

Present value of FCFE (31,250) 2,460,587 14,037 (68,885) (127,339) 129,746 128,408 154,042

High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389

Present value of FCFE (31,284) 2,476,617 14,251 (70,544) (131,541) 135,193 134,963 163,313





Contents

PwC



46

Project Portiga




Net income IDR in mil 977,454 1,090,496 1,215,753 1,324,448 1,446,866 1,614,075 1,602,268 1,697,350


Changes in working capital IDR in mil 22,075 12,175 61 767 (391) (6,628) 5,570 (1,484)



FCFE IDR in mil 1,042,064 1,002,674 865,121 866,495 1,218,732 1,663,464 1,413,345 1,705,213



FCFE of TPS 1,042,064 1,002,674 865,121 866,495 1,218,732 1,663,464 1,413,345 1,705,213





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 658,902 575,199 441,211 441,912 651,561 1,030,746 785,256 1,039,852

Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






Contents

PwC



47

Project Portiga






Changes in working capital IDR in mil (1,179) (1,418) (1,904) (742) (1,904) (2,648) (1,246) (3,387)



FCFE IDR in mil 1,601,191 1,607,687 1,790,080 1,826,972 2,059,777 2,277,915 1,924,946 2,655,645



FCFE of TPS 1,601,191 1,607,687 1,790,080 1,826,972 2,059,777 2,277,915 1,924,946 2,655,645





(-) Tender cost

(-) Dividend to partner (gross of witholding tax) (702,997) (743,116) (786,671) (827,912) (875,181) (927,009) (943,224) (1,034,835)



(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 898,194 864,571 1,003,409 999,060 1,184,596 1,350,906 981,723 1,620,810

Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






Contents

PwC



48

Project Portiga


12 Months 12 Months







FCFE IDR in mil 2,433,170 3,082,667

12 Months 12 Months


FCFE of TPS 2,433,170 3,082,667





(-) Tender cost






Incremental FCFE to Pelindo III IDR in mil 1,340,554 (978,482)


Low

Ke 16.0% 16.0%



High

Ke 15.0% 15.0%







Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 5: Self operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

49

Project Portiga









FCFE IDR in mil (201,793) 345,446 292,397 485,993 775,953 872,243 982,171 1,195,353



FCFE of TPS 872,243 982,171 1,195,353





(-) Tender cost -




(-) Asset buyback - - - - (834,979) - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil (50,952) 1,002,985 555,668 (894,705) (2,087,683) 286,506 608,244 1,195,353

Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389






Contents

PwC



50

Project Portiga









FCFE IDR in mil 1,482,202 1,470,983 1,366,706 1,381,248 1,752,100 2,173,615 1,952,065 2,246,084



FCFE of TPS 1,482,202 1,470,983 1,366,706 1,381,248 1,752,100 2,173,615 1,952,065 2,246,084





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






Contents

PwC



51

Project Portiga









FCFE IDR in mil 2,147,403 2,157,076 2,338,910 2,380,168 2,612,576 2,824,301 2,474,881 3,195,603



FCFE of TPS 2,147,403 2,157,076 2,338,910 2,380,168 2,612,576 2,824,301 2,474,881 3,195,603





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






Contents

PwC



52

Project Portiga


12 Months 12 Months







FCFE IDR in mil 2,968,495 3,597,671

12 Months 12 Months


FCFE of TPS 2,968,495 3,597,671





(-) Tender cost








Low

Ke 16.0% 16.0%



High

Ke 15.0% 15.0%







Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 6: Joint operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

53

Project Portiga









FCFE IDR in mil (201,793) 345,446 292,397 485,993 775,953 868,728 978,234 1,191,280



FCFE of TPS 868,728 978,234 1,191,280









(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389






Contents

PwC



54

Project Portiga









FCFE IDR in mil 1,477,996 1,466,599 1,362,135 1,376,525 1,747,219 2,168,571 1,946,853 2,240,699



FCFE of TPS 1,477,996 1,466,599 1,362,135 1,376,525 1,747,219 2,168,571 1,946,853 2,240,699





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 983,729 921,786 763,619 711,622 1,027,128 1,390,345 1,164,357 1,422,092

Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






Contents

PwC



55

Project Portiga









FCFE IDR in mil 2,141,839 2,151,325 2,332,968 2,374,028 2,606,231 2,817,744 2,468,106 3,188,603



FCFE of TPS 2,141,839 2,151,325 2,332,968 2,374,028 2,606,231 2,817,744 2,468,106 3,188,603





(-) Tender cost

(-) Dividend to partner (gross of witholding tax) (849,172) (883,402) (921,390) (960,694) (1,003,561) (1,050,760) (1,094,727) (1,148,119)



(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






Contents

PwC



56

Project Portiga


12 Months 12 Months







FCFE IDR in mil 2,961,261 3,590,196

12 Months 12 Months


FCFE of TPS 2,961,261 3,590,196





(-) Tender cost








Low

Ke 16.0% 16.0%



High

Ke 15.0% 15.0%







Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 7: Self operate - Long term throughput of 2.5 million TEUs (1 of 4)

57

Project Portiga









FCFE IDR in mil (179,039) 372,050 320,211 514,622 806,171 905,176 1,018,128 1,234,226



FCFE of TPS 905,176 1,018,128 1,234,226





(-) Tender cost -




(-) Asset buyback - - - - (834,979) - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil (53,739) 989,949 542,040 (908,733) (2,102,489) 319,439 740,900 1,234,226

Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389






Contents

PwC



58

Project Portiga






Changes in working capital IDR in mil 8,432 1,149 (5,945) (5,441) (5,708) (5,389) (3,981) (7,417)



FCFE IDR in mil 1,523,570 1,515,618 1,414,921 1,432,951 1,807,448 2,232,523 2,095,850 2,488,825



FCFE of TPS 1,523,570 1,515,618 1,414,921 1,432,951 1,807,448 2,232,523 2,095,850 2,488,825





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






Contents

PwC



59

Project Portiga









FCFE IDR in mil 2,499,451 2,531,695 2,733,145 2,795,066 3,049,239 3,283,892 2,958,625 3,704,791



FCFE of TPS 2,499,451 2,531,695 2,733,145 2,795,066 3,049,239 3,283,892 2,958,625 3,704,791





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






Contents

PwC



60

Project Portiga


12 Months 12 Months







FCFE IDR in mil 3,504,486 4,161,898

12 Months 12 Months


FCFE of TPS 3,504,486 4,161,898





(-) Tender cost








Low

Ke 16.0% 16.0%



High

Ke 15.0% 15.0%







Contents

PwC


Incremental free cash flow to Pelindo III analysisScenario 8: Joint operate - Long term throughput of 2.5 million TEUs (1 of 4)

61

Project Portiga









FCFE IDR in mil (179,039) 372,050 320,211 514,622 806,171 901,730 1,014,269 1,230,233



FCFE of TPS 901,730 1,014,269 1,230,233









(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 0.13 0.75 1.75 2.75 3.75 4.75 5.75 6.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.982 0.895 0.771 0.665 0.573 0.494 0.426 0.367


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.983 0.900 0.783 0.681 0.592 0.515 0.448 0.389






Contents

PwC



62

Project Portiga






Changes in working capital IDR in mil 8,528 1,211 (5,921) (5,416) (5,682) (5,363) (3,954) (7,389)



FCFE IDR in mil 1,519,446 1,511,320 1,410,440 1,428,321 1,802,663 2,227,578 2,090,740 2,483,545



FCFE of TPS 1,519,446 1,511,320 1,410,440 1,428,321 1,802,663 2,227,578 2,090,740 2,483,545





(-) Tender cost




(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -

Incremental FCFE to Pelindo III IDR in mil 1,008,937 948,943 792,921 743,050 1,060,770 1,426,155 1,250,344 1,568,063

Time factor 7.75 8.75 9.75 10.75 11.75 12.75 13.75 14.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.317 0.273 0.235 0.203 0.175 0.151 0.130 0.112


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.339 0.294 0.256 0.223 0.194 0.168 0.146 0.127






Contents

PwC



63

Project Portiga









FCFE IDR in mil 2,493,995 2,526,057 2,727,319 2,789,046 3,043,019 3,277,464 2,951,983 3,697,927



FCFE of TPS 2,493,995 2,526,057 2,727,319 2,789,046 3,043,019 3,277,464 2,951,983 3,697,927





(-) Tender cost

(-) Dividend to partner (gross of witholding tax) (989,071) (1,030,619) (1,076,315) (1,123,739) (1,175,158) (1,231,366) (1,284,824) (1,348,214)



(-) Asset buyback - - - - - - - -

(-) Share buyback - - - - - - - -


Time factor 15.75 16.75 17.75 18.75 19.75 20.75 21.75 22.75

Low

Ke 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0% 16.0%

Discount factor 0.097 0.083 0.072 0.062 0.053 0.046 0.040 0.034


High

Ke 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Discount factor 0.111 0.096 0.084 0.073 0.063 0.055 0.048 0.042






Contents

PwC



64

Project Portiga


12 Months 12 Months







FCFE IDR in mil 3,497,394 4,154,570

12 Months 12 Months


FCFE of TPS 3,497,394 4,154,570





(-) Tender cost








Low

Ke 16.0% 16.0%



High

Ke 15.0% 15.0%







Contents

PwC


Discount rate calculation

65

Project Portiga

3.3 Discount rate calculation Contents

PwC


Comparable companies

66

Project Portiga

3.3 Discount rate calculation

Selected Comparables for Port

Project Portiga

No. Company Name Country Description

1 Dong Nai Port JSC Vietnam Dong Nai Port JSC is a port operator. The Company provides cargo handling, warehousing, maritime agency, and

transportation of goods.

2 Adani Ports Adani Ports and Special

Economic Zone

India Adani Ports and Special Economic Zone operates a shipping port on the west coast of India. The Company's port

provides services for bulk and container cargo, crude oil, and railway and other added services.

3 Westports Holdings Berhad Malaysia Westports Holdings Berhad provides port services. The Company offers container and cargo services, marine

services, rental services and other ancillary services. Westports provides its services to the import and export

industries.

4 Shenzhen Chiwan Wharf Holdings

Ltd

China Shenzhen Chiwan Wharf Holdings Ltd. operates the Chiwan Port in Shenzhen. The Company handles,

warehouses, and transports containers and bulk and general cargoes.

5 Gujarat Pipavav Port Ltd India Gujarat Pipavav Port Ltd. operates a marine shipping port. The port loads and unloads container, bulk, and liquid

cargo.

6 Xiamen International Port Company

Ltd

Hongkong Xiamen International Port Company Ltd. offers shipping port services. The Company loads, unloads, and stores

shipping containers, loads and unloads general cargo, and offers shipping agency, tallying, tugboat berthing and

unberthing, and other port related services. Xiamen International also manufactures building materials.

7 Asian Terminal Inc Philippines Asian Terminals, Inc. provides general service to the Philippine port terminals. The Company's services include

general cargo handling, container terminal handling, stevedoring, and storage

management services.

8 Dinh Vu Port Investment &

Development JSC

Vietnam Dinh Vu Port Investment & Development JSC owns and operates the Dinh Vu Port. The Company is involved in port

development, general cargo, container, dry bulk and combined terminals.

Source: Bloomberg

Contents

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Beta

67

Project Portiga


Comparable Companies Beta

Project Portiga

10% 20%

1 Dong Nai Port JSC Vietnam 54 0.6 0.0 17% 0.5 0.5 0.6

2 Adani Ports Adani Ports and Special Economic Zone India 60 0.9 0.2 26% 0.6 0.7 0.8

3 Westports Holdings Berhad Malaysia 23 0.2 0.0 9% 0.2 0.2 0.2

4 Shenzhen Chiwan Wharf Holdings Ltd China 55 1.0 0.7 6% 1.0 1.1 1.2

5 Gujarat Pipavav Port Ltd India 60 1.0 0.1 9% 0.9 1.0 1.1

6 Xiamen International Port Company Ltd Hongkong 60 1.5 0.3 36% 0.9 1.0 1.2

7 Asian Terminal Inc Philippines 60 0.8 0.3 0% 0.8 0.9 1.0

8 Dinh Vu Port Investment & Development JSC Vietnam 60 0.5 0.1 12% 0.5 0.5 0.6

Average 0.8 14% 0.7 0.7 0.8

Median 0.9 10% 0.7 0.8 0.9

High 1.5 36% 1.0 1.1 1.2

Low 0.2 0% 0.2 0.2 0.2

Average - normalised 17% 0.9 1.0

Median - normalised 12% 0.9 1.1

Source: Bloomberg

Note:

1 Equity betas from Bloomberg (monthly, 5 years), as at 30 September 2015)

2 Gearing ratio: [d / (d+e)]. Average gearing ratio 2011-2015

3 Equity betas have been ungeared using the Miller formula. Formula for ungearing equity beta: equity beta * (1 - [d / (d+e)])

4 Asset betas of comparable companies is regeared back using the target gearing ratio

5 Comparables are chosen on the basis of industry sector and statistically sufficient number of beta observations.

Normalised based on monthly observation lower than 60 and R2

No. Company Country

Number

of Monthly

Observations

Equity

Beta1)

R2

3 Years

Average

Gearing Asset Beta3)

Regeared Beta with Debt

Contents

PwC


Cost of equity

68

Project Portiga


Discount Rate Calculation

Project Portiga

Description Low High Notes

Rf 8.5% 8.5% Long-term Indonesian Government

Securities Yield Curve and PwC

Analysis

EMRP 7.5% 7.5% Empirical research

Beta (ß) 0.9 1.0 Equity beta selected based on an

analysis of comparable companies

Ke 15.0% 15.8% Rf + ß ( EMRP)

Selected Ke 15.0% 16.0%

• Based on the analysis of comparable companies, we arrive at the selected cost of equity of 15.0% to 16.0%.

Contents

PwC


Charts

69

Project Portiga

3.4 Charts Contents

PwC


Revenue, expenses, net income and EBITDA marginScenario 1 & 2 - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation

70

Project Portiga

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Revenue, expenses, net income and EBITDA marginScenario 3 & 4 - BMT revenue, capex and cost calculation

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Revenue, expenses, net income and EBITDA marginScenario 5 & 6 - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%

72

Project Portiga

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Revenue, expenses, net income and EBITDA marginScenario 7 & 8 - Long term throughput of 2.5 million TEUs

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PwC


Profit and loss projection of TPS

74

Project Portiga

3.5 Profit and loss projection of TPS Contents

PwC


Profit and Loss Projection of TPS analysisScenario 1: Self operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 12)

75

Project Portiga

3.5 Profit and loss projection of TPS

Profit and loss IDR in million 2015 2016 2017 2018 2019 2020 2021 2022

Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885

Domestic volume TEU'000 163 179 196 217 240 267 294 294

International volume TEU'000 1,206 1,220 1,270 1,325 1,384 1,448 1,517 1,591

Transhipment volume TEU'000 - - - - - - - -

Containerized Stevedoring Revenue 1,087,899 1,270,748 1,302,278 1,304,353 1,363,249 1,513,475 1,681,170 1,846,616

Lift-on Lift-off (LOLO) 278,761 290,379 310,619 333,009 357,852 385,506 415,349 440,766

Container Yard Storage 375,980 391,650 418,949 449,147 482,654 519,953 560,204 594,485

Ancillary Revenue 215,383 241,355 251,127 257,883 272,374 298,969 328,359 356,186

Total Revenue 1,958,023 2,194,133 2,282,973 2,344,391 2,476,129 2,717,903 2,985,082 3,238,053

Operating Expenses

Payroll 164,862 184,741 192,222 197,393 208,485 228,842 251,338 272,637

Sub-contracted/Outsourced Labours 98,469 110,343 114,811 117,900 124,525 136,684 150,121 162,842

Operations 59,983 67,216 69,938 71,820 75,855 83,262 91,447 99,197

Engineering 6,409 7,182 7,472 7,673 8,105 8,896 9,770 10,598

Others - - - - - - - -

Equipment Repairs & Maintenance 89,133 99,881 103,926 106,721 112,718 123,724 135,887 147,403

Equipment Hire 15,980 17,907 18,632 19,133 20,208 22,181 24,362 26,427

Facilities Rent - - - - - - - -

Fuel (Gas & Oil) 101,887 114,173 118,796 121,992 128,847 141,428 155,330 168,494

Electricity & Water 20,914 23,436 24,385 25,041 26,448 29,031 31,884 34,586

Transportation - - - - - - - -

Security Charges 742 831 865 888 938 1,030 1,131 1,227

Insurance - - - - - - - -

Terminal Overflow Expenses - - - - - - - -

Business/Turnover Tax - - - - - - - -

Terminal Rent & Concession - variable portion 195,802 219,413 228,297 234,439 247,613 271,790 298,508 323,805

Mgmt Fee paid to DPW - variable portion

Other Operation Expenses (e.g. Cleaning, waste disposal, consumbles etc.) 1,967 2,204 2,293 2,355 2,487 2,730 2,999 3,253

Total Operating Expenses 591,287 662,587 689,415 707,963 747,745 820,756 901,439 977,832

Contents

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76

Project Portiga



Overhead Expenses

Payroll 94,465 100,606 106,441 112,402 118,471 124,869 131,612 138,719

Mgmt/G&A 38,310 40,800 43,166 45,584 48,045 50,640 53,374 56,256

Operations 38,822 41,346 43,744 46,193 48,688 51,317 54,088 57,009

Engineering 10,099 10,756 11,379 12,017 12,666 13,350 14,070 14,830

Safety 3,449 3,673 3,886 4,104 4,326 4,559 4,805 5,065

Security 2,762 2,942 3,112 3,287 3,464 3,651 3,848 4,056

Others 1,023 1,089 1,153 1,217 1,283 1,352 1,425 1,502

Facility Rent 3,169 3,375 3,571 3,770 3,974 4,189 4,415 4,653

Facilities Maintenance 24,503 26,095 27,609 29,155 30,729 32,389 34,138 35,981

Electricity & Water - - - - - - - -

Company Car & Bus 2,949 3,141 3,323 3,509 3,699 3,898 4,109 4,331

Professional/Legal Expenses 3,064 3,263 3,453 3,646 3,843 4,050 4,269 4,500

Audit fees 509 543 574 606 639 673 710 748

Insurance 10,661 11,354 12,013 12,685 13,370 14,092 14,853 15,655

Security Charges 6,594 7,023 7,430 7,846 8,270 8,716 9,187 9,683

Cargo Claims/Accidents 738 786 831 878 925 975 1,028 1,083

Travel & Accommodation 6,476 6,897 7,297 7,706 8,122 8,560 9,023 9,510

Communications 829 883 934 986 1,039 1,095 1,155 1,217

Office Services & Supplies 5,878 6,260 6,623 6,994 7,372 7,770 8,189 8,632

Training & Development 2,183 2,325 2,460 2,597 2,738 2,885 3,041 3,205

IT Expenses 9,078 9,668 10,229 10,802 11,385 12,000 12,648 13,331

Marketing/Advertising Expenses 3,113 3,315 3,507 3,704 3,904 4,115 4,337 4,571

Corporate Responsibility (Incl Donations & Charity) 7,908 8,422 8,911 9,410 9,918 10,453 11,018 11,613

Shared Services Allocation - - - - - - - -

Terminal Rent & Concession - fixed portion 38,018 43,053 41,090 38,105 36,901 38,131 39,402 40,716

Mgmt Fee paid to DPW - fixed portion 5,084 5,757 5,494 5,095 4,934 - - -

Misc Expenses (including pension) 4,706 5,011 5,302 5,599 5,901 6,220 6,556 6,910

Redundancy Cost 12,348 13,151 13,914 14,693 15,486 16,323 17,204 18,133

Total Overhead Expenses 242,273 260,927 271,005 280,188 291,621 301,405 316,893 333,191

Total Expenses 833,560 923,514 960,420 988,151 1,039,366 1,122,161 1,218,332 1,311,022

Contents

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77

Project Portiga



EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,595,742 1,766,750 1,927,031

EBITDA Margin % 57% 58% 58% 58% 58% 59% 59% 60%

Total Depreciation & Amortization (97,528) (142,237) (199,006) (233,488) (241,006) (262,565) (283,029) (304,698)

EBIT 1,026,935 1,128,382 1,123,547 1,122,753 1,195,757 1,333,177 1,483,721 1,622,332

Finance Income - - - - - - - -

Finance Expenses (Bank Charges, Interest Expenses, Other Borrowing Cost) - - - - - - - -

Foreign Exchange Gain/(Loss) - - - - - - - -

Income Tax (256,734) (282,095) (280,887) (280,688) (298,939) (333,294) (370,930) (405,583)

PAT 770,201 846,286 842,660 842,064 896,818 999,883 1,112,791 1,216,749

Contents

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78

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,200 2,200








Total Revenue 3,447,454 3,743,163 4,066,349 4,370,123 4,688,926 4,996,855 5,078,815 5,299,381

Operating Expenses

Payroll 290,269 315,167 342,378 367,955 394,798 420,725 427,626 446,197


Operations 105,612 114,670 124,571 133,877 143,644 153,077 155,588 162,345

Engineering 11,284 12,252 13,309 14,304 15,347 16,355 16,623 17,345

Others - - - - - - - -


Equipment Hire 28,135 30,549 33,186 35,666 38,267 40,780 41,449 43,249


Fuel (Gas & Oil) 179,390 194,778 211,595 227,402 243,991 260,014 264,279 275,756




Insurance - - - - - - - -






Total Operating Expenses 1,041,067 1,130,366 1,227,962 1,319,696 1,415,968 1,508,957 1,533,708 1,600,315

Contents

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79

Project Portiga



Overhead Expenses

Payroll 146,209 154,105 162,426 171,197 180,442 190,186 200,456 211,281

Mgmt/G&A 59,294 62,496 65,871 69,428 73,177 77,128 81,293 85,683

Operations 60,087 63,332 66,752 70,357 74,156 78,160 82,381 86,830

Engineering 15,631 16,475 17,365 18,303 19,291 20,333 21,431 22,588

Safety 5,338 5,627 5,931 6,251 6,588 6,944 7,319 7,714

Security 4,275 4,506 4,749 5,006 5,276 5,561 5,861 6,178

Others 1,583 1,669 1,759 1,854 1,954 2,060 2,171 2,288

Facility Rent 4,905 5,169 5,449 5,743 6,053 6,380 6,724 7,087



Company Car & Bus 4,565 4,811 5,071 5,345 5,634 5,938 6,258 6,596


Audit fees 789 831 876 923 973 1,026 1,081 1,140

Insurance 16,501 17,392 18,331 19,321 20,364 21,464 22,623 23,844


Cargo Claims/Accidents 1,142 1,204 1,269 1,337 1,409 1,485 1,566 1,650


Communications 1,283 1,352 1,425 1,502 1,583 1,668 1,759 1,853



IT Expenses 14,050 14,809 15,609 16,452 17,340 18,276 19,263 20,304





Mgmt Fee paid to DPW - fixed portion - - - - - - - -


Redundancy Cost 19,112 20,144 21,232 22,379 23,587 24,861 26,203 27,618


Total Expenses 1,391,408 1,498,756 1,615,347 1,727,071 1,844,382 1,959,514 2,007,571 2,098,707

Contents

PwC



80

Project Portiga



EBITDA 2,056,046 2,244,407 2,451,003 2,643,052 2,844,543 3,037,341 3,071,245 3,200,674

EBITDA Margin % 60% 60% 60% 60% 61% 61% 60% 60%


EBIT 1,742,052 1,918,660 2,106,410 2,337,061 2,529,861 2,732,558 2,748,916 2,875,545




Income Tax (435,513) (479,665) (526,603) (584,265) (632,465) (683,140) (687,229) (718,886)

PAT 1,306,539 1,438,995 1,579,808 1,752,796 1,897,395 2,049,419 2,061,687 2,156,659

Contents

PwC



81

Project Portiga



Throughput 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200








Total Revenue 5,530,783 5,773,584 6,028,377 6,295,789 6,576,477 6,871,135 7,180,495 7,505,324

Operating Expenses

Payroll 465,681 486,124 507,577 530,093 553,726 578,536 604,583 631,933


Operations 169,434 176,872 184,677 192,869 201,468 210,495 219,972 229,923

Engineering 18,103 18,897 19,731 20,607 21,525 22,490 23,502 24,565

Others - - - - - - - -


Equipment Hire 45,138 47,120 49,199 51,381 53,672 56,077 58,602 61,253


Fuel (Gas & Oil) 287,797 300,432 313,690 327,605 342,211 357,543 373,641 390,544




Insurance - - - - - - - -







Contents

PwC



82

Project Portiga



Overhead Expenses

Payroll 222,690 234,715 247,390 260,749 274,829 289,670 305,312 321,799

Mgmt/G&A 90,310 95,187 100,327 105,745 111,455 117,473 123,817 130,503

Operations 91,518 96,460 101,669 107,159 112,946 119,045 125,474 132,249

Engineering 23,808 25,093 26,448 27,876 29,382 30,968 32,641 34,403

Safety 8,131 8,570 9,033 9,520 10,035 10,576 11,148 11,750

Security 6,511 6,863 7,233 7,624 8,036 8,470 8,927 9,409

Others 2,412 2,542 2,679 2,824 2,976 3,137 3,306 3,485

Facility Rent 7,470 7,873 8,299 8,747 9,219 9,717 10,242 10,795



Company Car & Bus 6,953 7,328 7,724 8,141 8,580 9,044 9,532 10,047


Audit fees 1,201 1,266 1,334 1,406 1,482 1,562 1,647 1,736

Insurance 25,132 26,489 27,920 29,427 31,016 32,691 34,456 36,317




Communications 1,954 2,059 2,170 2,287 2,411 2,541 2,678 2,823



IT Expenses 21,400 22,556 23,774 25,057 26,410 27,837 29,340 30,924







Redundancy Cost 29,110 30,682 32,338 34,085 35,925 37,865 39,910 42,065


Total Expenses 2,194,406 2,294,904 2,400,454 2,511,320 2,627,782 2,750,132 2,878,681 3,013,753

Contents

PwC



83

Project Portiga



EBITDA 3,336,377 3,478,680 3,627,923 3,784,469 3,948,695 4,121,003 4,301,814 4,491,571

EBITDA Margin % 60% 60% 60% 60% 60% 60% 60% 60%


EBIT 2,983,495 3,104,107 3,237,703 3,375,992 3,526,624 3,692,228 3,847,090 4,034,273




Income Tax (745,874) (776,027) (809,426) (843,998) (881,656) (923,057) (961,772) (1,008,568)

PAT 2,237,621 2,328,080 2,428,277 2,531,994 2,644,968 2,769,171 2,885,317 3,025,705

Contents

PwC



84

Project Portiga


Profit and loss IDR in million 2039 2040

Throughput 2,200 2,200

Domestic volume TEU'000 294 294

International volume TEU'000 1,906 1,906

Transhipment volume TEU'000 - -

Containerized Stevedoring Revenue 5,291,231 5,576,228

Lift-on Lift-off (LOLO) 720,423 734,831

Container Yard Storage 971,673 991,107

Ancillary Revenue 863,108 902,515

Total Revenue 7,846,435 8,204,681

Operating Expenses

Payroll 660,654 690,817

Sub-contracted/Outsourced Labours 394,599 412,615

Operations 240,373 251,347

Engineering 25,682 26,855

Others - -

Equipment Repairs & Maintenance 357,186 373,494

Equipment Hire 64,037 66,960

Facilities Rent - -

Fuel (Gas & Oil) 408,294 426,935

Electricity & Water 83,810 87,636

Transportation - -

Security Charges 2,973 3,108

Insurance - -

Terminal Overflow Expenses - -

Business/Turnover Tax - -

Terminal Rent & Concession - variable portion 784,644 820,468


Other Operation Expenses (e.g. Cleaning, waste disposal, consumbles etc.) 7,882 8,242

Total Operating Expenses 2,369,477 2,477,661

Contents

PwC



85

Project Portiga



Overhead Expenses

Payroll 339,176 357,491

Mgmt/G&A 137,550 144,978

Operations 139,391 146,918


Safety 12,384 13,053

Security 9,917 10,453

Others 3,673 3,871

Facility Rent 11,377 11,992

Facilities Maintenance 87,976 92,726

Electricity & Water - -

Company Car & Bus 10,589 11,161

Professional/Legal Expenses 11,002 11,596

Audit fees 1,829 1,928

Insurance 38,278 40,345


Cargo Claims/Accidents 2,649 2,792

Travel & Accommodation 23,253 24,508

Communications 2,975 3,136

Office Services & Supplies 21,105 22,245

Training & Development 7,838 8,261

IT Expenses 32,594 34,354

Marketing/Advertising Expenses 11,176 11,780

Corporate Responsibility (Incl Donations & Charity) 28,394 29,928

Shared Services Allocation - -

Terminal Rent & Concession - fixed portion 71,097 73,467

Mgmt Fee paid to DPW - fixed portion - -

Misc Expenses (including pension) 16,895 17,808

Redundancy Cost 44,337 46,731

Total Overhead Expenses 786,217 827,203

Total Expenses 3,155,694 3,304,864

Contents

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86

Project Portiga



EBITDA 4,690,741 4,899,817

EBITDA Margin % 60% 60%

Total Depreciation & Amortization (473,463) (453,799)

EBIT 4,217,278 4,446,019

Finance Income - -

Finance Expenses (Bank Charges, Interest Expenses, Other Borrowing Cost) - -

Foreign Exchange Gain/(Loss) - -

Income Tax (1,054,319) (1,111,505)

PAT 3,162,958 3,334,514

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 2: Joint operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 12)

87

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,958,023 2,194,133 2,282,973 2,344,391 2,476,129 2,717,903 2,985,082 3,238,053

Operating Expenses

Payroll 164,862 184,741 192,222 197,393 208,485 228,842 251,338 272,637


Operations 59,983 67,216 69,938 71,820 75,855 83,262 91,447 99,197

Engineering 6,409 7,182 7,472 7,673 8,105 8,896 9,770 10,598

Others - - - - - - - -


Equipment Hire 15,980 17,907 18,632 19,133 20,208 22,181 24,362 26,427


Fuel (Gas & Oil) 101,887 114,173 118,796 121,992 128,847 141,428 155,330 168,494




Insurance - - - - - - - -







Contents

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88

Project Portiga



Overhead Expenses

Payroll 94,465 100,606 106,441 112,402 118,471 124,869 131,612 138,719

Mgmt/G&A 38,310 40,800 43,166 45,584 48,045 50,640 53,374 56,256

Operations 38,822 41,346 43,744 46,193 48,688 51,317 54,088 57,009

Engineering 10,099 10,756 11,379 12,017 12,666 13,350 14,070 14,830

Safety 3,449 3,673 3,886 4,104 4,326 4,559 4,805 5,065

Security 2,762 2,942 3,112 3,287 3,464 3,651 3,848 4,056

Others 1,023 1,089 1,153 1,217 1,283 1,352 1,425 1,502

Facility Rent 3,169 3,375 3,571 3,770 3,974 4,189 4,415 4,653



Company Car & Bus 2,949 3,141 3,323 3,509 3,699 3,898 4,109 4,331


Audit fees 509 543 574 606 639 673 710 748

Insurance 10,661 11,354 12,013 12,685 13,370 14,092 14,853 15,655




Communications 829 883 934 986 1,039 1,095 1,155 1,217



IT Expenses 9,078 9,668 10,229 10,802 11,385 12,000 12,648 13,331





Mgmt Fee paid to DPW - fixed portion 5,084 5,757 5,494 5,095 4,934 5,099 5,269 5,444


Redundancy Cost 12,348 13,151 13,914 14,693 15,486 16,323 17,204 18,133


Total Expenses 833,560 923,514 960,420 988,151 1,039,366 1,127,260 1,223,600 1,316,467

Contents

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89

Project Portiga



EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,590,644 1,761,481 1,921,587

EBITDA Margin % 57% 58% 58% 58% 58% 59% 59% 59%


EBIT 1,026,935 1,128,382 1,123,547 1,122,753 1,195,757 1,328,079 1,478,452 1,616,888




Income Tax (256,734) (282,095) (280,887) (280,688) (298,939) (332,020) (369,613) (404,222)

PAT 770,201 846,286 842,660 842,064 896,818 996,059 1,108,839 1,212,666

Contents

PwC



90

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,200 2,200








Total Revenue 3,447,454 3,743,163 4,066,349 4,370,123 4,688,926 4,996,855 5,078,815 5,299,381

Operating Expenses

Payroll 290,269 315,167 342,378 367,955 394,798 420,725 427,626 446,197


Operations 105,612 114,670 124,571 133,877 143,644 153,077 155,588 162,345

Engineering 11,284 12,252 13,309 14,304 15,347 16,355 16,623 17,345

Others - - - - - - - -


Equipment Hire 28,135 30,549 33,186 35,666 38,267 40,780 41,449 43,249


Fuel (Gas & Oil) 179,390 194,778 211,595 227,402 243,991 260,014 264,279 275,756




Insurance - - - - - - - -







Contents

PwC



91

Project Portiga



Overhead Expenses

Payroll 146,209 154,105 162,426 171,197 180,442 190,186 200,456 211,281

Mgmt/G&A 59,294 62,496 65,871 69,428 73,177 77,128 81,293 85,683

Operations 60,087 63,332 66,752 70,357 74,156 78,160 82,381 86,830

Engineering 15,631 16,475 17,365 18,303 19,291 20,333 21,431 22,588

Safety 5,338 5,627 5,931 6,251 6,588 6,944 7,319 7,714

Security 4,275 4,506 4,749 5,006 5,276 5,561 5,861 6,178

Others 1,583 1,669 1,759 1,854 1,954 2,060 2,171 2,288

Facility Rent 4,905 5,169 5,449 5,743 6,053 6,380 6,724 7,087



Company Car & Bus 4,565 4,811 5,071 5,345 5,634 5,938 6,258 6,596


Audit fees 789 831 876 923 973 1,026 1,081 1,140

Insurance 16,501 17,392 18,331 19,321 20,364 21,464 22,623 23,844




Communications 1,283 1,352 1,425 1,502 1,583 1,668 1,759 1,853



IT Expenses 14,050 14,809 15,609 16,452 17,340 18,276 19,263 20,304







Redundancy Cost 19,112 20,144 21,232 22,379 23,587 24,861 26,203 27,618


Total Expenses 1,397,034 1,504,569 1,621,354 1,733,278 1,850,797 1,966,142 2,014,419 2,105,785

Contents

PwC



92

Project Portiga



EBITDA 2,050,420 2,238,594 2,444,996 2,636,845 2,838,129 3,030,713 3,064,396 3,193,597

EBITDA Margin % 59% 60% 60% 60% 61% 61% 60% 60%


EBIT 1,736,426 1,912,847 2,100,403 2,330,854 2,523,446 2,725,930 2,742,067 2,868,468




Income Tax (434,107) (478,212) (525,101) (582,713) (630,862) (681,483) (685,517) (717,117)

PAT 1,302,320 1,434,635 1,575,302 1,748,140 1,892,585 2,044,448 2,056,551 2,151,351

Contents

PwC



93

Project Portiga



Throughput 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200








Total Revenue 5,530,783 5,773,584 6,028,377 6,295,789 6,576,477 6,871,135 7,180,495 7,505,324

Operating Expenses

Payroll 465,681 486,124 507,577 530,093 553,726 578,536 604,583 631,933


Operations 169,434 176,872 184,677 192,869 201,468 210,495 219,972 229,923

Engineering 18,103 18,897 19,731 20,607 21,525 22,490 23,502 24,565

Others - - - - - - - -


Equipment Hire 45,138 47,120 49,199 51,381 53,672 56,077 58,602 61,253


Fuel (Gas & Oil) 287,797 300,432 313,690 327,605 342,211 357,543 373,641 390,544




Insurance - - - - - - - -







Contents

PwC



94

Project Portiga



Overhead Expenses

Payroll 222,690 234,715 247,390 260,749 274,829 289,670 305,312 321,799

Mgmt/G&A 90,310 95,187 100,327 105,745 111,455 117,473 123,817 130,503

Operations 91,518 96,460 101,669 107,159 112,946 119,045 125,474 132,249

Engineering 23,808 25,093 26,448 27,876 29,382 30,968 32,641 34,403

Safety 8,131 8,570 9,033 9,520 10,035 10,576 11,148 11,750

Security 6,511 6,863 7,233 7,624 8,036 8,470 8,927 9,409

Others 2,412 2,542 2,679 2,824 2,976 3,137 3,306 3,485

Facility Rent 7,470 7,873 8,299 8,747 9,219 9,717 10,242 10,795



Company Car & Bus 6,953 7,328 7,724 8,141 8,580 9,044 9,532 10,047


Audit fees 1,201 1,266 1,334 1,406 1,482 1,562 1,647 1,736

Insurance 25,132 26,489 27,920 29,427 31,016 32,691 34,456 36,317




Communications 1,954 2,059 2,170 2,287 2,411 2,541 2,678 2,823



IT Expenses 21,400 22,556 23,774 25,057 26,410 27,837 29,340 30,924







Redundancy Cost 29,110 30,682 32,338 34,085 35,925 37,865 39,910 42,065


Total Expenses 2,201,719 2,302,461 2,408,263 2,519,389 2,636,120 2,758,748 2,887,584 3,022,953

Contents

PwC



95

Project Portiga



EBITDA 3,329,064 3,471,123 3,620,114 3,776,399 3,940,357 4,112,387 4,292,911 4,482,371

EBITDA Margin % 60% 60% 60% 60% 60% 60% 60% 60%


EBIT 2,976,182 3,096,550 3,229,894 3,367,923 3,518,286 3,683,612 3,838,186 4,025,073




Income Tax (744,046) (774,137) (807,474) (841,981) (879,572) (920,903) (959,547) (1,006,268)

PAT 2,232,137 2,322,412 2,422,421 2,525,942 2,638,715 2,762,709 2,878,640 3,018,805

Contents

PwC



96

Project Portiga











Total Revenue 7,846,435 8,204,681

Operating Expenses

Payroll 660,654 690,817


Operations 240,373 251,347


Others - -



Facilities Rent - -

Fuel (Gas & Oil) 408,294 426,935


Transportation - -


Insurance - -







Contents

PwC



97

Project Portiga



Overhead Expenses

Payroll 339,176 357,491

Mgmt/G&A 137,550 144,978

Operations 139,391 146,918


Safety 12,384 13,053

Security 9,917 10,453

Others 3,673 3,871







Insurance 38,278 40,345












Mgmt Fee paid to DPW - fixed portion 9,507 9,824




Total Expenses 3,165,201 3,314,688

Contents

PwC



98

Project Portiga



EBITDA 4,681,235 4,889,994



EBIT 4,207,771 4,436,195

Finance Income - -



Income Tax (1,051,943) (1,109,049)

PAT 3,155,828 3,327,146

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 3: Self operate - BMT revenue, capex and cost calculation (1 of 4)

99

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,958,023 2,194,133 2,282,973 2,344,391 2,476,129 2,717,903 2,985,082 3,238,053



Total Expenses 1,079,326 1,142,037 1,252,895 1,358,998 1,482,502 1,615,908 1,756,688 1,896,407

EBITDA 878,697 1,052,096 1,030,078 985,394 993,627 1,101,995 1,228,393 1,341,646

EBITDA Margin % 45% 48% 45% 42% 40% 41% 41% 41%


EBIT 804,205 973,618 930,357 879,804 876,074 974,990 1,095,967 1,195,275




Income Tax (201,051) (243,404) (232,589) (219,951) (219,018) (243,747) (273,992) (298,819)

PAT 603,154 730,213 697,768 659,853 657,055 731,242 821,975 896,456

Contents

PwC



100

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,200 2,200








Total Revenue 3,447,454 3,743,163 4,066,349 4,370,123 4,688,926 4,996,855 5,078,815 5,299,381



Total Expenses 1,996,252 2,138,893 2,292,505 2,442,518 2,588,592 2,672,449 2,765,450 2,857,292

EBITDA 1,451,202 1,604,271 1,773,845 1,927,606 2,100,334 2,324,406 2,313,365 2,442,089

EBITDA Margin % 42% 43% 44% 44% 45% 47% 46% 46%


EBIT 1,303,272 1,453,995 1,621,003 1,765,931 1,929,155 2,152,100 2,136,357 2,263,133




Income Tax (325,818) (363,499) (405,251) (441,483) (482,289) (538,025) (534,089) (565,783)

PAT 977,454 1,090,496 1,215,753 1,324,448 1,446,866 1,614,075 1,602,268 1,697,350

Contents

PwC



101

Project Portiga



Throughput 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200








Total Revenue 5,530,783 5,773,584 6,028,377 6,295,789 6,576,477 6,871,135 7,180,495 7,505,324



Total Expenses 2,956,580 3,059,162 3,163,292 3,282,616 3,398,579 3,514,881 3,649,252 3,773,298

EBITDA 2,574,203 2,714,422 2,865,085 3,013,173 3,177,898 3,356,254 3,531,243 3,732,027

EBITDA Margin % 47% 47% 48% 48% 48% 49% 49% 50%


EBIT 2,391,147 2,527,606 2,675,752 2,816,028 2,976,808 3,153,091 3,320,347 3,519,848




Income Tax (597,787) (631,901) (668,938) (704,007) (744,202) (788,273) (830,087) (879,962)

PAT 1,793,360 1,895,704 2,006,814 2,112,021 2,232,606 2,364,819 2,490,260 2,639,886

Contents

PwC



102

Project Portiga











Total Revenue 7,846,435 8,204,681



Total Expenses 3,912,568 4,045,219

EBITDA 3,933,867 4,159,462



EBIT 3,716,382 3,941,227

Finance Income - -



Income Tax (929,096) (985,307)

PAT 2,787,287 2,955,920

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 4: Joint operate - BMT revenue, capex and cost calculation (1 of 4)

103

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,958,023 2,194,133 2,282,973 2,344,391 2,476,129 2,717,903 2,985,082 3,238,053



Total Expenses 1,079,326 1,142,037 1,252,895 1,358,998 1,482,502 1,615,908 1,756,688 1,896,407

EBITDA 878,697 1,052,096 1,030,078 985,394 993,627 1,101,995 1,228,393 1,341,646

EBITDA Margin % 45% 48% 45% 42% 40% 41% 41% 41%


EBIT 804,205 973,618 930,357 879,804 876,074 974,990 1,095,967 1,195,275




Income Tax (201,051) (243,404) (232,589) (219,951) (219,018) (243,747) (273,992) (298,819)

PAT 603,154 730,213 697,768 659,853 657,055 731,242 821,975 896,456

Contents

PwC



104

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,200 2,200








Total Revenue 3,447,454 3,743,163 4,066,349 4,370,123 4,688,926 4,996,855 5,078,815 5,299,381



Total Expenses 1,996,252 2,138,893 2,292,505 2,442,518 2,588,592 2,672,449 2,765,450 2,857,292

EBITDA 1,451,202 1,604,271 1,773,845 1,927,606 2,100,334 2,324,406 2,313,365 2,442,089

EBITDA Margin % 42% 43% 44% 44% 45% 47% 46% 46%


EBIT 1,303,272 1,453,995 1,621,003 1,765,931 1,929,155 2,152,100 2,136,357 2,263,133




Income Tax (325,818) (363,499) (405,251) (441,483) (482,289) (538,025) (534,089) (565,783)

PAT 977,454 1,090,496 1,215,753 1,324,448 1,446,866 1,614,075 1,602,268 1,697,350

Contents

PwC



105

Project Portiga



Throughput 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200








Total Revenue 5,530,783 5,773,584 6,028,377 6,295,789 6,576,477 6,871,135 7,180,495 7,505,324



Total Expenses 2,956,580 3,059,162 3,163,292 3,282,616 3,398,579 3,514,881 3,649,252 3,773,298

EBITDA 2,574,203 2,714,422 2,865,085 3,013,173 3,177,898 3,356,254 3,531,243 3,732,027

EBITDA Margin % 47% 47% 48% 48% 48% 49% 49% 50%


EBIT 2,391,147 2,527,606 2,675,752 2,816,028 2,976,808 3,153,091 3,320,347 3,519,848




Income Tax (597,787) (631,901) (668,938) (704,007) (744,202) (788,273) (830,087) (879,962)

PAT 1,793,360 1,895,704 2,006,814 2,112,021 2,232,606 2,364,819 2,490,260 2,639,886

Contents

PwC



106

Project Portiga











Total Revenue 7,846,435 8,204,681



Total Expenses 3,912,568 4,045,219

EBITDA 3,933,867 4,159,462



EBIT 3,716,382 3,941,227

Finance Income - -



Income Tax (929,096) (985,307)

PAT 2,787,287 2,955,920

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 5: Self operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

107

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,918,863 2,150,250 2,237,314 2,297,504 2,426,607 2,663,545 2,925,380 3,173,292



Total Expenses 826,580 915,481 952,052 979,595 1,030,243 1,111,774 1,206,641 1,298,130

EBITDA 1,092,283 1,234,769 1,285,262 1,317,908 1,396,364 1,551,771 1,718,739 1,875,163

EBITDA Margin % 57% 57% 57% 57% 58% 58% 59% 59%


EBIT 994,755 1,092,532 1,086,256 1,084,420 1,155,357 1,289,206 1,435,710 1,570,464




Income Tax (248,689) (273,133) (271,564) (271,105) (288,839) (322,302) (358,928) (392,616)

PAT 746,066 819,399 814,692 813,315 866,518 966,905 1,076,783 1,177,848

Contents

PwC



108

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,200 2,200








Total Revenue 3,378,505 3,668,300 3,985,022 4,282,721 4,595,147 4,896,918 4,977,239 5,193,394



Total Expenses 1,377,594 1,483,516 1,598,535 1,708,825 1,824,631 1,938,346 1,986,374 2,076,669

EBITDA 2,000,911 2,184,783 2,386,487 2,573,896 2,770,516 2,958,572 2,990,866 3,116,725

EBITDA Margin % 59% 60% 60% 60% 60% 60% 60% 60%


EBIT 1,686,918 1,859,036 2,041,895 2,267,905 2,455,833 2,653,789 2,668,537 2,791,596




Income Tax (421,729) (464,759) (510,474) (566,976) (613,958) (663,447) (667,134) (697,899)

PAT 1,265,188 1,394,277 1,531,421 1,700,929 1,841,875 1,990,342 2,001,403 2,093,697

Contents

PwC



109

Project Portiga



Throughput 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200








Total Revenue 5,420,167 5,658,112 5,907,810 6,169,873 6,444,947 6,733,713 7,036,885 7,355,218



Total Expenses 2,171,486 2,271,062 2,375,645 2,485,498 2,600,898 2,722,136 2,849,519 2,983,370

EBITDA 3,248,681 3,387,050 3,532,165 3,684,375 3,844,049 4,011,576 4,187,366 4,371,848

EBITDA Margin % 60% 60% 60% 60% 60% 60% 60% 59%


EBIT 2,895,799 3,012,477 3,141,945 3,275,899 3,421,978 3,582,801 3,732,641 3,914,550




Income Tax (723,950) (753,119) (785,486) (818,975) (855,494) (895,700) (933,160) (978,638)

PAT 2,171,849 2,259,358 2,356,459 2,456,924 2,566,483 2,687,100 2,799,481 2,935,913

Contents

PwC



110

Project Portiga











Total Revenue 7,689,507 8,040,588



Total Expenses 3,124,029 3,271,855

EBITDA 4,565,478 4,768,733



EBIT 4,092,014 4,314,934

Finance Income - -



Income Tax (1,023,004) (1,078,734)

PAT 3,069,011 3,236,201

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 6: Joint operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

111

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,918,863 2,150,250 2,237,314 2,297,504 2,426,607 2,663,545 2,925,380 3,173,292



Total Expenses 826,580 915,481 952,052 979,595 1,030,243 1,116,975 1,212,015 1,303,683

EBITDA 1,092,283 1,234,769 1,285,262 1,317,908 1,396,364 1,546,571 1,713,365 1,869,609

EBITDA Margin % 57% 57% 57% 57% 58% 58% 59% 59%


EBIT 994,755 1,092,532 1,086,256 1,084,420 1,155,357 1,284,006 1,430,336 1,564,911




Income Tax (248,689) (273,133) (271,564) (271,105) (288,839) (321,001) (357,584) (391,228)

PAT 746,066 819,399 814,692 813,315 866,518 963,004 1,072,752 1,173,683

Contents

PwC



112

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,200 2,200








Total Revenue 3,378,505 3,668,300 3,985,022 4,282,721 4,595,147 4,896,918 4,977,239 5,193,394



Total Expenses 1,383,332 1,489,446 1,604,662 1,715,156 1,831,174 1,945,107 1,993,360 2,083,888

EBITDA 1,995,173 2,178,854 2,380,360 2,567,565 2,763,974 2,951,811 2,983,880 3,109,506

EBITDA Margin % 59% 59% 60% 60% 60% 60% 60% 60%


EBIT 1,681,179 1,853,106 2,035,768 2,261,574 2,449,291 2,647,029 2,661,551 2,784,377




Income Tax (420,295) (463,277) (508,942) (565,393) (612,323) (661,757) (665,388) (696,094)

PAT 1,260,884 1,389,830 1,526,826 1,696,180 1,836,968 1,985,271 1,996,163 2,088,283

Contents

PwC



113

Project Portiga



Throughput 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200








Total Revenue 5,420,167 5,658,112 5,907,810 6,169,873 6,444,947 6,733,713 7,036,885 7,355,218



Total Expenses 2,178,945 2,278,770 2,383,610 2,493,729 2,609,403 2,730,925 2,858,600 2,992,754

EBITDA 3,241,222 3,379,342 3,524,200 3,676,144 3,835,544 4,002,788 4,178,284 4,362,464

EBITDA Margin % 60% 60% 60% 60% 60% 59% 59% 59%


EBIT 2,888,340 3,004,769 3,133,980 3,267,668 3,413,473 3,574,012 3,723,560 3,905,166




Income Tax (722,085) (751,192) (783,495) (816,917) (853,368) (893,503) (930,890) (976,292)

PAT 2,166,255 2,253,577 2,350,485 2,450,751 2,560,105 2,680,509 2,792,670 2,928,875

Contents

PwC



114

Project Portiga











Total Revenue 7,689,507 8,040,588



Total Expenses 3,133,726 3,281,875

EBITDA 4,555,781 4,758,713



EBIT 4,082,318 4,304,914

Finance Income - -



Income Tax (1,020,579) (1,076,229)

PAT 3,061,738 3,228,686

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 7: Self operate - Long term throughput of 2.5 million TEUs (1 of 12)

115

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,958,023 2,194,133 2,282,973 2,344,391 2,476,129 2,717,903 2,985,082 3,238,053

Operating Expenses

Payroll 164,862 184,741 192,222 197,393 208,485 228,842 251,338 272,637


Operations 59,983 67,216 69,938 71,820 75,855 83,262 91,447 99,197

Engineering 6,409 7,182 7,472 7,673 8,105 8,896 9,770 10,598

Others - - - - - - - -


Equipment Hire 15,980 17,907 18,632 19,133 20,208 22,181 24,362 26,427


Fuel (Gas & Oil) 101,887 114,173 118,796 121,992 128,847 141,428 155,330 168,494




Insurance - - - - - - - -







Contents

PwC



116

Project Portiga



Overhead Expenses

Payroll 94,465 100,606 106,441 112,402 118,471 124,869 131,612 138,719

Mgmt/G&A 38,310 40,800 43,166 45,584 48,045 50,640 53,374 56,256

Operations 38,822 41,346 43,744 46,193 48,688 51,317 54,088 57,009

Engineering 10,099 10,756 11,379 12,017 12,666 13,350 14,070 14,830

Safety 3,449 3,673 3,886 4,104 4,326 4,559 4,805 5,065

Security 2,762 2,942 3,112 3,287 3,464 3,651 3,848 4,056

Others 1,023 1,089 1,153 1,217 1,283 1,352 1,425 1,502

Facility Rent 3,169 3,375 3,571 3,770 3,974 4,189 4,415 4,653



Company Car & Bus 2,949 3,141 3,323 3,509 3,699 3,898 4,109 4,331


Audit fees 509 543 574 606 639 673 710 748

Insurance 10,661 11,354 12,013 12,685 13,370 14,092 14,853 15,655




Communications 829 883 934 986 1,039 1,095 1,155 1,217



IT Expenses 9,078 9,668 10,229 10,802 11,385 12,000 12,648 13,331





Mgmt Fee paid to DPW - fixed portion 5,084 5,757 5,494 5,095 4,934 - - -


Redundancy Cost 12,348 13,151 13,914 14,693 15,486 16,323 17,204 18,133


Total Expenses 833,560 923,514 960,420 988,151 1,039,366 1,122,161 1,218,332 1,311,022

Contents

PwC



117

Project Portiga



EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,595,742 1,766,750 1,927,031

EBITDA Margin % 57% 58% 58% 58% 58% 59% 59% 60%


EBIT 1,026,935 1,128,382 1,123,547 1,122,753 1,195,757 1,333,177 1,483,721 1,622,332




Income Tax (256,734) (282,095) (280,887) (280,688) (298,939) (333,294) (370,930) (405,583)

PAT 770,201 846,286 842,660 842,064 896,818 999,883 1,112,791 1,216,749

Contents

PwC



118

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,300 2,400








Total Revenue 3,447,454 3,743,163 4,066,349 4,370,123 4,688,926 4,996,855 5,245,605 5,650,973

Operating Expenses

Payroll 290,269 315,167 342,378 367,955 394,798 420,725 441,669 475,800


Operations 105,612 114,670 124,571 133,877 143,644 153,077 160,697 173,116

Engineering 11,284 12,252 13,309 14,304 15,347 16,355 17,169 18,496

Others - - - - - - - -


Equipment Hire 28,135 30,549 33,186 35,666 38,267 40,780 42,811 46,119


Fuel (Gas & Oil) 179,390 194,778 211,595 227,402 243,991 260,014 272,958 294,052




Insurance - - - - - - - -







Contents

PwC



119

Project Portiga



Overhead Expenses

Payroll 146,209 154,105 162,426 171,197 180,442 190,186 200,456 211,281

Mgmt/G&A 59,294 62,496 65,871 69,428 73,177 77,128 81,293 85,683

Operations 60,087 63,332 66,752 70,357 74,156 78,160 82,381 86,830

Engineering 15,631 16,475 17,365 18,303 19,291 20,333 21,431 22,588

Safety 5,338 5,627 5,931 6,251 6,588 6,944 7,319 7,714

Security 4,275 4,506 4,749 5,006 5,276 5,561 5,861 6,178

Others 1,583 1,669 1,759 1,854 1,954 2,060 2,171 2,288

Facility Rent 4,905 5,169 5,449 5,743 6,053 6,380 6,724 7,087



Company Car & Bus 4,565 4,811 5,071 5,345 5,634 5,938 6,258 6,596


Audit fees 789 831 876 923 973 1,026 1,081 1,140

Insurance 16,501 17,392 18,331 19,321 20,364 21,464 22,623 23,844




Communications 1,283 1,352 1,425 1,502 1,583 1,668 1,759 1,853



IT Expenses 14,050 14,809 15,609 16,452 17,340 18,276 19,263 20,304







Redundancy Cost 19,112 20,144 21,232 22,379 23,587 24,861 26,203 27,618


Total Expenses 1,391,408 1,498,756 1,615,347 1,727,071 1,844,382 1,959,514 2,057,938 2,204,881

Contents

PwC



120

Project Portiga



EBITDA 2,056,046 2,244,407 2,451,003 2,643,052 2,844,543 3,037,341 3,187,667 3,446,092

EBITDA Margin % 60% 60% 60% 60% 61% 61% 61% 61%


EBIT 1,742,052 1,918,660 2,106,410 2,337,061 2,529,861 2,732,558 2,865,338 3,120,962




Income Tax (435,513) (479,665) (526,603) (584,265) (632,465) (683,140) (716,335) (780,241)

PAT 1,306,539 1,438,995 1,579,808 1,752,796 1,897,395 2,049,419 2,149,004 2,340,722

Contents

PwC



121

Project Portiga



Throughput 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500








Total Revenue 6,086,649 6,359,467 6,645,898 6,946,656 7,262,491 7,594,194 7,942,598 8,308,582

Operating Expenses

Payroll 512,483 535,454 559,571 584,894 611,487 639,416 668,751 699,566


Operations 186,462 194,820 203,595 212,808 222,484 232,645 243,319 254,530

Engineering 19,922 20,815 21,752 22,737 23,771 24,856 25,997 27,195

Others - - - - - - - -


Equipment Hire 49,675 51,901 54,239 56,693 59,271 61,978 64,821 67,808


Fuel (Gas & Oil) 316,722 330,918 345,823 361,473 377,908 395,168 413,298 432,342




Insurance - - - - - - - -







Contents

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122

Project Portiga



Overhead Expenses

Payroll 222,690 234,715 247,390 260,749 274,829 289,670 305,312 321,799

Mgmt/G&A 90,310 95,187 100,327 105,745 111,455 117,473 123,817 130,503

Operations 91,518 96,460 101,669 107,159 112,946 119,045 125,474 132,249

Engineering 23,808 25,093 26,448 27,876 29,382 30,968 32,641 34,403

Safety 8,131 8,570 9,033 9,520 10,035 10,576 11,148 11,750

Security 6,511 6,863 7,233 7,624 8,036 8,470 8,927 9,409

Others 2,412 2,542 2,679 2,824 2,976 3,137 3,306 3,485

Facility Rent 7,470 7,873 8,299 8,747 9,219 9,717 10,242 10,795



Company Car & Bus 6,953 7,328 7,724 8,141 8,580 9,044 9,532 10,047


Audit fees 1,201 1,266 1,334 1,406 1,482 1,562 1,647 1,736

Insurance 25,132 26,489 27,920 29,427 31,016 32,691 34,456 36,317




Communications 1,954 2,059 2,170 2,287 2,411 2,541 2,678 2,823



IT Expenses 21,400 22,556 23,774 25,057 26,410 27,837 29,340 30,924







Redundancy Cost 29,110 30,682 32,338 34,085 35,925 37,865 39,910 42,065


Total Expenses 2,362,267 2,471,830 2,586,934 2,707,870 2,834,945 2,968,482 3,108,822 3,256,322

Contents

PwC



123

Project Portiga



EBITDA 3,724,382 3,887,637 4,058,964 4,238,786 4,427,546 4,625,712 4,833,777 5,052,259

EBITDA Margin % 61% 61% 61% 61% 61% 61% 61% 61%


EBIT 3,371,500 3,513,064 3,668,744 3,830,309 4,005,474 4,196,936 4,379,052 4,594,962




Income Tax (842,875) (878,266) (917,186) (957,577) (1,001,369) (1,049,234) (1,094,763) (1,148,740)

PAT 2,528,625 2,634,798 2,751,558 2,872,732 3,004,106 3,147,702 3,284,289 3,446,221

Contents

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124

Project Portiga










Ancillary Revenue 956,238 1,000,674

Total Revenue 8,693,068 9,097,033

Operating Expenses

Payroll 731,939 765,952


Operations 266,309 278,684


Others - -



Facilities Rent - -

Fuel (Gas & Oil) 452,349 473,369


Transportation - -


Insurance - -







Contents

PwC



125

Project Portiga



Overhead Expenses

Payroll 339,176 357,491

Mgmt/G&A 137,550 144,978

Operations 139,391 146,918


Safety 12,384 13,053

Security 9,917 10,453

Others 3,673 3,871







Insurance 38,278 40,345












Mgmt Fee paid to DPW - fixed portion - -




Total Expenses 3,411,361 3,574,338

Contents

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126

Project Portiga



EBITDA 5,281,707 5,522,695



EBIT 4,808,244 5,068,896

Finance Income - -



Income Tax (1,202,061) (1,267,224)

PAT 3,606,183 3,801,672

Contents

PwC


Profit and Loss Projection of TPS analysisScenario 8: Joint operate - Long term throughput of 2.5 million TEUs (1 of 12)

127

Project Portiga



Throughput 1,369 1,398 1,466 1,541 1,624 1,715 1,812 1,885








Total Revenue 1,958,023 2,194,133 2,282,973 2,344,391 2,476,129 2,717,903 2,985,082 3,238,053

Operating Expenses

Payroll 164,862 184,741 192,222 197,393 208,485 228,842 251,338 272,637


Operations 59,983 67,216 69,938 71,820 75,855 83,262 91,447 99,197

Engineering 6,409 7,182 7,472 7,673 8,105 8,896 9,770 10,598

Others - - - - - - - -


Equipment Hire 15,980 17,907 18,632 19,133 20,208 22,181 24,362 26,427


Fuel (Gas & Oil) 101,887 114,173 118,796 121,992 128,847 141,428 155,330 168,494




Insurance - - - - - - - -







Contents

PwC



128

Project Portiga



Overhead Expenses

Payroll 94,465 100,606 106,441 112,402 118,471 124,869 131,612 138,719

Mgmt/G&A 38,310 40,800 43,166 45,584 48,045 50,640 53,374 56,256

Operations 38,822 41,346 43,744 46,193 48,688 51,317 54,088 57,009

Engineering 10,099 10,756 11,379 12,017 12,666 13,350 14,070 14,830

Safety 3,449 3,673 3,886 4,104 4,326 4,559 4,805 5,065

Security 2,762 2,942 3,112 3,287 3,464 3,651 3,848 4,056

Others 1,023 1,089 1,153 1,217 1,283 1,352 1,425 1,502

Facility Rent 3,169 3,375 3,571 3,770 3,974 4,189 4,415 4,653



Company Car & Bus 2,949 3,141 3,323 3,509 3,699 3,898 4,109 4,331


Audit fees 509 543 574 606 639 673 710 748

Insurance 10,661 11,354 12,013 12,685 13,370 14,092 14,853 15,655




Communications 829 883 934 986 1,039 1,095 1,155 1,217



IT Expenses 9,078 9,668 10,229 10,802 11,385 12,000 12,648 13,331







Redundancy Cost 12,348 13,151 13,914 14,693 15,486 16,323 17,204 18,133


Total Expenses 833,560 923,514 960,420 988,151 1,039,366 1,127,260 1,223,600 1,316,467

Contents

PwC



129

Project Portiga



EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,590,644 1,761,481 1,921,587

EBITDA Margin % 57% 58% 58% 58% 58% 59% 59% 59%


EBIT 1,026,935 1,128,382 1,123,547 1,122,753 1,195,757 1,328,079 1,478,452 1,616,888




Income Tax (256,734) (282,095) (280,887) (280,688) (298,939) (332,020) (369,613) (404,222)

PAT 770,201 846,286 842,660 842,064 896,818 996,059 1,108,839 1,212,666

Contents

PwC



130

Project Portiga



Throughput 1,925 2,004 2,086 2,149 2,214 2,281 2,300 2,400








Total Revenue 3,447,454 3,743,163 4,066,349 4,370,123 4,688,926 4,996,855 5,245,605 5,650,973

Operating Expenses

Payroll 290,269 315,167 342,378 367,955 394,798 420,725 441,669 475,800


Operations 105,612 114,670 124,571 133,877 143,644 153,077 160,697 173,116

Engineering 11,284 12,252 13,309 14,304 15,347 16,355 17,169 18,496

Others - - - - - - - -


Equipment Hire 28,135 30,549 33,186 35,666 38,267 40,780 42,811 46,119


Fuel (Gas & Oil) 179,390 194,778 211,595 227,402 243,991 260,014 272,958 294,052




Insurance - - - - - - - -







Contents

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131

Project Portiga



Overhead Expenses

Payroll 146,209 154,105 162,426 171,197 180,442 190,186 200,456 211,281

Mgmt/G&A 59,294 62,496 65,871 69,428 73,177 77,128 81,293 85,683

Operations 60,087 63,332 66,752 70,357 74,156 78,160 82,381 86,830

Engineering 15,631 16,475 17,365 18,303 19,291 20,333 21,431 22,588

Safety 5,338 5,627 5,931 6,251 6,588 6,944 7,319 7,714

Security 4,275 4,506 4,749 5,006 5,276 5,561 5,861 6,178

Others 1,583 1,669 1,759 1,854 1,954 2,060 2,171 2,288

Facility Rent 4,905 5,169 5,449 5,743 6,053 6,380 6,724 7,087



Company Car & Bus 4,565 4,811 5,071 5,345 5,634 5,938 6,258 6,596


Audit fees 789 831 876 923 973 1,026 1,081 1,140

Insurance 16,501 17,392 18,331 19,321 20,364 21,464 22,623 23,844




Communications 1,283 1,352 1,425 1,502 1,583 1,668 1,759 1,853



IT Expenses 14,050 14,809 15,609 16,452 17,340 18,276 19,263 20,304







Redundancy Cost 19,112 20,144 21,232 22,379 23,587 24,861 26,203 27,618


Total Expenses 1,397,034 1,504,569 1,621,354 1,733,278 1,850,797 1,966,142 2,064,787 2,211,959

Contents

PwC



132

Project Portiga



EBITDA 2,050,420 2,238,594 2,444,996 2,636,845 2,838,129 3,030,713 3,180,818 3,439,014

EBITDA Margin % 59% 60% 60% 60% 61% 61% 61% 61%


EBIT 1,736,426 1,912,847 2,100,403 2,330,854 2,523,446 2,725,930 2,858,489 3,113,885




Income Tax (434,107) (478,212) (525,101) (582,713) (630,862) (681,483) (714,622) (778,471)

PAT 1,302,320 1,434,635 1,575,302 1,748,140 1,892,585 2,044,448 2,143,867 2,335,414

Contents

PwC



133

Project Portiga



Throughput 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500








Total Revenue 6,086,649 6,359,467 6,645,898 6,946,656 7,262,491 7,594,194 7,942,598 8,308,582

Operating Expenses

Payroll 512,483 535,454 559,571 584,894 611,487 639,416 668,751 699,566


Operations 186,462 194,820 203,595 212,808 222,484 232,645 243,319 254,530

Engineering 19,922 20,815 21,752 22,737 23,771 24,856 25,997 27,195

Others - - - - - - - -


Equipment Hire 49,675 51,901 54,239 56,693 59,271 61,978 64,821 67,808


Fuel (Gas & Oil) 316,722 330,918 345,823 361,473 377,908 395,168 413,298 432,342




Insurance - - - - - - - -







Contents

PwC



134

Project Portiga



Overhead Expenses

Payroll 222,690 234,715 247,390 260,749 274,829 289,670 305,312 321,799

Mgmt/G&A 90,310 95,187 100,327 105,745 111,455 117,473 123,817 130,503

Operations 91,518 96,460 101,669 107,159 112,946 119,045 125,474 132,249

Engineering 23,808 25,093 26,448 27,876 29,382 30,968 32,641 34,403

Safety 8,131 8,570 9,033 9,520 10,035 10,576 11,148 11,750

Security 6,511 6,863 7,233 7,624 8,036 8,470 8,927 9,409

Others 2,412 2,542 2,679 2,824 2,976 3,137 3,306 3,485

Facility Rent 7,470 7,873 8,299 8,747 9,219 9,717 10,242 10,795



Company Car & Bus 6,953 7,328 7,724 8,141 8,580 9,044 9,532 10,047


Audit fees 1,201 1,266 1,334 1,406 1,482 1,562 1,647 1,736

Insurance 25,132 26,489 27,920 29,427 31,016 32,691 34,456 36,317




Communications 1,954 2,059 2,170 2,287 2,411 2,541 2,678 2,823



IT Expenses 21,400 22,556 23,774 25,057 26,410 27,837 29,340 30,924







Redundancy Cost 29,110 30,682 32,338 34,085 35,925 37,865 39,910 42,065


Total Expenses 2,369,580 2,479,387 2,594,743 2,715,939 2,843,283 2,977,098 3,117,725 3,265,522

Contents

PwC



135

Project Portiga



EBITDA 3,717,069 3,880,080 4,051,155 4,230,717 4,419,208 4,617,096 4,824,873 5,043,059

EBITDA Margin % 61% 61% 61% 61% 61% 61% 61% 61%


EBIT 3,364,187 3,505,507 3,660,935 3,822,240 3,997,136 4,188,320 4,370,149 4,585,762




Income Tax (841,047) (876,377) (915,234) (955,560) (999,284) (1,047,080) (1,092,537) (1,146,440)

PAT 2,523,140 2,629,130 2,745,701 2,866,680 2,997,852 3,141,240 3,277,612 3,439,321

Contents

PwC



136

Project Portiga










Ancillary Revenue 956,238 1,000,674

Total Revenue 8,693,068 9,097,033

Operating Expenses

Payroll 731,939 765,952


Operations 266,309 278,684


Others - -



Facilities Rent - -

Fuel (Gas & Oil) 452,349 473,369


Transportation - -


Insurance - -







Contents

PwC



137

Project Portiga



Overhead Expenses

Payroll 339,176 357,491

Mgmt/G&A 137,550 144,978

Operations 139,391 146,918


Safety 12,384 13,053

Security 9,917 10,453

Others 3,673 3,871







Insurance 38,278 40,345












Mgmt Fee paid to DPW - fixed portion 9,507 9,824




Total Expenses 3,420,868 3,584,161

Contents

PwC



138

Project Portiga



EBITDA 5,272,200 5,512,871



EBIT 4,798,737 5,059,073

Finance Income - -



Income Tax (1,199,684) (1,264,768)

PAT 3,599,053 3,794,305

Contents

PwC


Balance sheet projection of TPS

139

Project Portiga

3.6 Balance sheet projection of TPS Contents

PwC


Balance Sheet Projection of TPSScenario 1: Self operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 4)

140

Project Portiga

3.6 Balance sheet projection of TPS

Balance sheet IDR in million 2015 2016 2017 2018 2019 2020 2021 2022

Current Asset

Cash 530,142 530,142 530,142 530,142 315,618 420,888 548,783 809,610

Accounts Receivable 77,453 93,175 103,203 112,402 122,110 134,034 147,210 159,685

Prepayments, Deposits & Other Receivables 29,295 29,295 29,295 29,295 29,295 29,295 29,295 29,295

Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240

Other Current Asset - - - - - - - -

Total Current Asset 640,130 655,852 665,880 675,079 470,263 587,456 728,528 1,001,830

Non-current Asset:

Tangible Fixed Asset 1,743,956 2,347,457 3,063,254 3,621,174 3,953,442 4,314,647 4,696,702 4,989,496

Tangible Fixed Asset - Accumulated Depreciation (683,564) (825,801) (1,024,807) (1,258,295) (1,499,302) (1,761,867) (2,044,895) (2,349,594)

Intangible Asset - - - - - - - -

Intangible Asset - Accumulated Amortization - - - - - - - -

Total Non-current Asset 1,060,392 1,521,656 2,038,447 2,362,879 2,454,141 2,552,781 2,651,806 2,639,902

Total Asset 1,700,522 2,177,508 2,704,327 3,037,958 2,924,404 3,140,237 3,380,334 3,641,732

Current Liabilities

Accounts Payable 17,357 20,107 24,476 30,665 40,988 56,844 74,383 92,431

Advances, Deposits, Accruals and Other Liabilities 172,636 172,636 172,636 172,636 172,636 172,636 172,636 172,636

Pension & Post-employment Benefits - - - - - - - -

VAT Payable/(Receivable) 79,965 79,965 79,965 79,965 79,965 79,965 79,965 79,965

Current Tax Liabilities 17,158 17,158 17,158 17,158 17,158 17,158 17,158 17,158

Other Current Liabilities 690 690 690 690 690 690 690 690

Total Current Liabilities 287,806 290,556 294,926 301,115 311,437 327,294 344,833 362,881

Non-current Liabilities:

Deferred Tax Liabilities/(Assets) 41,950 41,950 41,950 41,950 41,950 41,950 41,950 41,950

Other Long-term Liabilities 46,440 46,440 46,440 46,440 46,440 46,440 46,440 46,440

Total Non-current Liabilities 88,390 88,390 88,390 88,390 88,390 88,390 88,390 88,390

Shareholders' Equity

Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661

Retained Earnings 1,219,664 1,693,901 2,216,350 2,543,792 2,419,915 2,619,892 2,842,450 3,085,800

Total Equity Attributable to Owners of the Company 1,324,326 1,798,562 2,321,011 2,648,453 2,524,576 2,724,553 2,947,111 3,190,461

Total Liabilities and Equity 1,700,522 2,177,508 2,704,327 3,037,958 2,924,404 3,140,237 3,380,334 3,641,732

Contents

PwC



141

Project Portiga



Current Asset

Cash 1,287,948 1,652,371 1,803,445 1,834,160 2,123,692 2,716,680 3,079,610 3,663,197



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240


Total Current Asset 1,490,495 1,869,500 2,036,513 2,082,208 2,387,462 2,995,635 3,362,607 3,957,071

Non-current Asset:


Tangible Fixed Asset - Accumulated Depreciation (2,663,587) (2,989,335) (3,333,927) (3,639,918) (3,954,601) (4,259,384) (4,581,713) (4,906,842)




Total Asset 3,921,799 4,225,330 4,551,285 4,911,384 5,300,877 5,720,557 6,136,702 6,575,646

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



142

Project Portiga



Current Asset

Cash 4,086,135 4,449,323 4,917,276 5,346,758 5,921,674 6,612,530 6,864,807 7,729,442



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,031,160 7,505,163 7,999,624 8,515,268 9,053,971 9,618,001 10,205,773 10,822,162

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



143

Project Portiga


Balance sheet IDR in million 2039 2040

Current Asset

Cash 8,261,312 9,289,468

Accounts Receivable 386,947 404,614

Prepayments, Deposits & Other Receivables 29,295 29,295

Inventories 3,240 3,240

Other Current Asset - -

Total Current Asset 8,680,794 9,726,617

Non-current Asset:

Tangible Fixed Asset 11,455,102 11,542,394

Tangible Fixed Asset - Accumulated Depreciation (8,669,326) (9,123,125)

Intangible Asset - -

Intangible Asset - Accumulated Amortization - -

Total Non-current Asset 2,785,776 2,419,269

Total Asset 11,466,570 12,145,887

Current Liabilities

Accounts Payable 265,791 278,205

Advances, Deposits, Accruals and Other Liabilities 172,636 172,636

Pension & Post-employment Benefits - -

VAT Payable/(Receivable) 79,965 79,965

Current Tax Liabilities 17,158 17,158

Other Current Liabilities 690 690

Total Current Liabilities 536,241 548,655


Deferred Tax Liabilities/(Assets) 41,950 41,950

Other Long-term Liabilities 46,440 46,440

Total Non-current Liabilities 88,390 88,390


Capital Stock 104,661 104,661

Retained Earnings 10,737,278 11,404,180

Total Equity Attributable to Owners of the Company 10,841,939 11,508,842

Total Liabilities and Equity 11,466,570 12,145,887

Contents

PwC


Balance Sheet Projection of TPSScenario 2: Joint operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 4)

144

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 618,858 723,740 850,938 1,111,038



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240


Total Current Asset 640,130 655,852 665,880 675,079 773,503 890,309 1,030,682 1,303,258

Non-current Asset:






Total Asset 1,700,522 2,177,508 2,704,327 3,037,958 3,227,644 3,443,090 3,682,488 3,943,160

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



145

Project Portiga



Current Asset

Cash 1,588,628 1,952,240 2,102,438 2,132,246 2,420,841 3,012,861 3,374,791 3,957,345



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 4,222,479 4,525,200 4,850,277 5,209,470 5,598,026 6,016,739 6,431,884 6,869,794

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



146

Project Portiga



Current Asset

Cash 4,379,215 4,741,299 5,208,112 5,636,416 6,210,115 6,899,713 7,150,689 8,013,981



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,324,240 7,797,140 8,290,460 8,804,926 9,342,411 9,905,183 10,491,655 11,106,701

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



147

Project Portiga



Current Asset

Cash 8,544,463 4,881,304






Non-current Asset:






Total Asset 11,749,721 7,737,723

Current Liabilities

















Contents

PwC


Balance Sheet Projection of TPSScenario 3: Self operate - BMT revenue, capex and cost calculation (1 of 4)

148

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 270,372 270,372 270,372 324,117



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240


Total Current Asset 640,130 655,852 665,880 675,079 425,018 436,941 450,117 516,337

Non-current Asset:


Tangible Fixed Asset - Accumulated Depreciation (660,528) (739,006) (838,728) (944,317) (1,061,871) (1,188,876) (1,321,302) (1,467,673)




Total Asset 1,723,558 2,264,303 2,890,406 3,351,936 3,316,590 3,562,712 3,825,516 4,038,160

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



149

Project Portiga



Current Asset

Cash 584,218 714,494 714,494 714,494 775,734 1,147,937 1,279,468 1,626,801



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240


Total Current Asset 786,764 931,624 947,562 962,542 1,039,503 1,426,893 1,562,465 1,920,675

Non-current Asset:






Total Asset 4,266,053 4,510,910 4,877,541 5,351,242 5,655,946 5,987,319 6,317,385 6,666,248

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



150

Project Portiga



Current Asset

Cash 1,793,304 1,884,427 2,069,057 2,206,412 2,480,105 2,866,165 2,866,165 3,409,901



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,035,153 7,424,850 7,836,874 8,271,723 8,730,182 9,215,029 9,794,352 10,334,962

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



151

Project Portiga



Current Asset

Cash 3,613,242 4,331,173






Non-current Asset:






Total Asset 10,906,819 11,511,473

Current Liabilities

















Contents

PwC


Balance Sheet Projection of TPSScenario 4: Joint operate - BMT revenue, capex and cost calculation (1 of 4)

152

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 530,142 530,142 530,142 583,887



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:


Tangible Fixed Asset - Accumulated Depreciation (660,528) (739,006) (838,728) (944,317) (1,061,871) (1,188,876) (1,321,302) (1,467,673)




Total Asset 1,723,558 2,264,303 2,890,406 3,351,936 3,576,359 3,822,482 4,085,286 4,297,929

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



153

Project Portiga



Current Asset

Cash 843,987 974,264 974,264 974,264 1,035,503 1,407,707 1,539,237 1,886,570



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 4,525,822 4,770,679 5,137,311 5,611,011 5,915,716 6,247,089 6,577,154 6,926,018

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



154

Project Portiga



Current Asset

Cash 2,053,073 2,144,197 2,328,826 2,466,182 2,739,875 3,125,935 3,125,935 3,669,671



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,294,922 7,684,619 8,096,643 8,531,492 8,989,951 9,474,798 10,054,122 10,594,731

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



155

Project Portiga



Current Asset

Cash 3,873,012 2,341,381






Non-current Asset:






Total Asset 11,166,589 9,521,681

Current Liabilities

















Contents

PwC


Balance Sheet Projection of TPSScenario 5: Self operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

156

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 312,569 411,289 532,033 785,107



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 1,698,973 2,175,645 2,702,263 3,035,710 2,918,913 3,127,957 3,360,640 3,614,036

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



157

Project Portiga



Current Asset

Cash 1,255,159 1,610,720 1,752,289 1,772,795 2,051,395 2,632,736 2,983,678 3,554,805



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 3,885,609 4,179,988 4,496,118 4,845,708 5,223,955 5,631,685 6,035,761 6,462,028

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



158

Project Portiga



Current Asset

Cash 3,964,729 4,314,319 4,768,062 5,182,691 5,742,080 6,416,701 6,651,997 7,498,870



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 6,904,299 7,364,465 7,844,464 8,344,992 8,867,890 9,415,394 9,985,881 10,584,187

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



159

Project Portiga



Current Asset

Cash 8,012,157 9,020,867






Non-current Asset:






Total Asset 11,209,676 11,869,193

Current Liabilities

















Contents

PwC


Balance Sheet Projection of TPSScenario 6: Joint operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

160

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 612,881 711,205 831,237 1,083,570



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 1,698,973 2,175,645 2,702,263 3,035,710 3,219,225 3,427,873 3,659,844 3,912,499

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



161

Project Portiga



Current Asset

Cash 1,552,858 1,907,594 2,048,268 2,067,849 2,345,493 2,925,848 3,275,770 3,845,843



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 4,183,309 4,476,861 4,792,097 5,140,762 5,518,053 5,924,796 6,327,853 6,753,065

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



162

Project Portiga



Current Asset

Cash 4,254,677 4,603,141 5,055,721 5,469,149 6,027,296 6,700,633 6,934,603 7,780,106



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,194,247 7,653,287 8,132,124 8,631,450 9,153,106 9,699,326 10,268,487 10,865,423

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



163

Project Portiga



Current Asset

Cash 8,291,977 4,742,604






Non-current Asset:






Total Asset 11,489,496 7,590,931

Current Liabilities

















Contents

PwC


Balance Sheet Projection of TPSScenario 7: Self operate - Long term throughput of 2.5 million TEUs (1 of 4)

164

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 315,618 420,888 548,783 809,610



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240


Total Current Asset 640,130 655,852 665,880 675,079 470,263 587,456 728,528 1,001,830

Non-current Asset:






Total Asset 1,700,522 2,177,508 2,704,327 3,037,958 2,924,404 3,140,237 3,380,334 3,641,732

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



165

Project Portiga



Current Asset

Cash 1,287,948 1,652,371 1,803,445 1,834,160 2,123,692 2,716,680 3,093,326 3,709,574



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 3,921,799 4,225,330 4,551,285 4,911,384 5,300,877 5,720,557 6,158,644 6,639,362

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



166

Project Portiga



Current Asset

Cash 4,186,124 4,609,981 5,141,880 5,638,760 6,284,714 7,050,445 7,381,638 8,329,452



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,158,562 7,694,714 8,254,681 8,839,368 9,450,842 10,091,573 10,760,187 11,461,785

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



167

Project Portiga



Current Asset

Cash 8,948,992 10,069,553






Non-current Asset:






Total Asset 12,196,002 12,969,978

Current Liabilities

















Contents

PwC


Balance Sheet Projection of TPSScenario 8: Joint operate - Long term throughput of 2.5 million TEUs (1 of 4)

168

Project Portiga



Current Asset

Cash 530,142 530,142 530,142 530,142 618,858 723,740 850,938 1,111,038



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 1,700,522 2,177,508 2,704,327 3,037,958 3,227,644 3,443,090 3,682,488 3,943,160

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



169

Project Portiga



Current Asset

Cash 1,588,628 1,952,240 2,102,438 2,132,246 2,420,841 3,012,861 3,388,508 4,003,722



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 4,222,479 4,525,200 4,850,277 5,209,470 5,598,026 6,016,739 6,453,825 6,933,510

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



170

Project Portiga



Current Asset

Cash 4,479,205 4,901,958 5,432,716 5,928,418 6,573,155 7,337,627 7,667,521 8,613,991



Inventories 3,240 3,240 3,240 3,240 3,240 3,240 3,240 3,240



Non-current Asset:






Total Asset 7,451,642 7,986,691 8,545,517 9,129,026 9,739,282 10,378,755 11,046,070 11,746,324

Current Liabilities













Capital Stock 104,661 104,661 104,661 104,661 104,661 104,661 104,661 104,661




Contents

PwC



171

Project Portiga



Current Asset

Cash 9,232,143 5,279,147






Non-current Asset:






Total Asset 12,479,153 8,179,572

Current Liabilities

















Contents

PwC


Cash flow projection of TPS

172

Project Portiga

3.7 Cash flow projection of TPS Contents

PwC


Projected cash flow statement of TPSScenario 1: Self operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 4)

173

Project Portiga

3.7 Cash flow projection of TPS

Cash flow IDR in million 2015 2016 2017 2018 2019 2020 2021 2022

Cash Flow from Operations

EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,595,742 1,766,750 1,927,031


Finance Expenses - - - - - - - -


Income Tax Paid (261,535) (282,095) (280,887) (280,688) (298,939) (333,294) (370,930) (405,583)

Change in Working Capital

Change in AP (1,773) 2,750 4,369 6,189 10,323 15,856 17,539 18,048

Change in AR (8,233) (15,723) (10,027) (9,199) (9,708) (11,923) (13,176) (12,475)

Change in Other Balance Sheet Items 66,276 - - - - - - -

Total Cash Flow from Operations 919,198 975,550 1,036,009 1,072,542 1,138,439 1,266,381 1,400,183 1,527,021

Cash Flow from Investments

Capital expenditures (419,034) (603,500) (715,797) (557,920) (332,268) (361,205) (382,054) (292,795)

Total Cash Flow from Investments (419,034) (603,500) (715,797) (557,920) (332,268) (361,205) (382,054) (292,795)

Cash Flow from Financing

Capital/Equity Contribution

Dividends (438,689) (372,050) (320,211) (514,622) (717,454) (799,906) (890,233) (973,399)

Cash contribution at the end of concession (303,240)

Total Cash Flow from Financing (438,689) (372,050) (320,211) (514,622) (1,020,695) (799,906) (890,233) (973,399)

Beginning Cash Balance 468,667 530,142 530,142 530,142 530,142 315,618 420,888 548,783

Increase / (Decrease) in Cash 61,475 - - - (214,524) 105,270 127,896 260,827

Effect of Foreign Exchange Rate Changes

Ending Cash Balance 530,142 530,142 530,142 530,142 315,618 420,888 548,783 809,610

Contents

PwC


Projected cash flow statement of TPS Scenario 1: Self operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (2 of 4)

174

Project Portiga




EBITDA 2,056,046 2,244,407 2,451,003 2,643,052 2,844,543 3,037,341 3,071,245 3,200,674




Income Tax Paid (435,513) (479,665) (526,603) (584,265) (632,465) (683,140) (687,229) (718,886)


Change in AP 18,759 15,732 9,993 9,540 10,014 9,797 3,808 7,612

Change in AR (10,327) (14,583) (15,938) (14,981) (15,722) (15,186) (4,042) (10,877)

Change in Other Balance Sheet Items - - - - - - - -

Total Cash Flow from Operations 1,628,965 1,765,892 1,918,456 2,053,346 2,206,370 2,348,812 2,383,782 2,478,523






Dividends (1,045,231) (1,151,196) (1,263,846) (1,402,237) (1,517,916) (1,639,535) (1,649,350) (1,725,327)

Cash contribution at the end of concession

Total Cash Flow from Financing (1,045,231) (1,151,196) (1,263,846) (1,402,237) (1,517,916) (1,639,535) (1,649,350) (1,725,327)

Beginning Cash Balance 809,610 1,287,948 1,652,371 1,803,445 1,834,160 2,123,692 2,716,680 3,079,610

Increase / (Decrease) in Cash 478,339 364,422 151,075 30,715 289,532 592,988 362,930 583,587


Ending Cash Balance 1,287,948 1,652,371 1,803,445 1,834,160 2,123,692 2,716,680 3,079,610 3,663,197

Contents

PwC



175

Project Portiga




EBITDA 3,336,377 3,478,680 3,627,923 3,784,469 3,948,695 4,121,003 4,301,814 4,491,571




Income Tax Paid (745,874) (776,027) (809,426) (843,998) (881,656) (923,057) (961,772) (1,008,568)


Change in AP 7,990 8,387 8,805 9,246 9,709 10,196 10,709 11,248

Change in AR (11,412) (11,974) (12,565) (13,187) (13,842) (14,531) (15,256) (16,019)








Dividends (1,790,097) (1,862,464) (1,942,622) (2,025,595) (2,115,974) (2,215,337) (2,308,254) (2,420,564)



Beginning Cash Balance 3,663,197 4,086,135 4,449,323 4,917,276 5,346,758 5,921,674 6,612,530 6,864,807




Contents

PwC



176

Project Portiga


Cash flow IDR in million 2039 2040


EBITDA 4,690,741 4,899,817

Finance Income - -

Finance Expenses - -


Income Tax Paid (1,054,319) (1,111,505)


Change in AP 11,816 12,414

Change in AR (16,822) (17,667)

Change in Other Balance Sheet Items - -

Total Cash Flow from Operations 3,631,416 3,783,060


Capital expenditures (569,179) (87,292)

Total Cash Flow from Investments (569,179) (87,292)



Dividends (2,530,367) (2,667,611)

Cash contribution at the end of concession -

Total Cash Flow from Financing (2,530,367) (2,667,611)

Beginning Cash Balance 7,729,442 8,261,312

Increase / (Decrease) in Cash 531,870 1,028,156


Ending Cash Balance 8,261,312 9,289,468

Contents

PwC


Projected cash flow statement of TPSScenario 2: Joint operate - BMT revenue and capex, projected operating expenses based on average historical % from revenue, overhead expense based on inflation (1 of 4)

177

Project Portiga




EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,590,644 1,761,481 1,921,587




Income Tax Paid (261,535) (282,095) (280,887) (280,688) (298,939) (332,020) (369,613) (404,222)


Change in AP (1,773) 2,750 4,369 6,189 10,323 16,234 17,631 18,138

Change in AR (8,233) (15,723) (10,027) (9,199) (9,708) (11,923) (13,176) (12,475)








Dividends (438,689) (372,050) (320,211) (514,622) (717,454) (796,847) (887,071) (970,133)


Total Cash Flow from Financing (438,689) (372,050) (320,211) (514,622) (717,454) (796,847) (887,071) (970,133)


Increase / (Decrease) in Cash 61,475 - - - 88,716 104,882 127,197 260,100


Ending Cash Balance 530,142 530,142 530,142 530,142 618,858 723,740 850,938 1,111,038

Contents

PwC



178

Project Portiga




EBITDA 2,050,420 2,238,594 2,444,996 2,636,845 2,838,129 3,030,713 3,064,396 3,193,597




Income Tax Paid (434,107) (478,212) (525,101) (582,713) (630,862) (681,483) (685,517) (717,117)


Change in AP 18,855 15,794 10,017 9,564 10,039 9,823 3,835 7,640

Change in AR (10,327) (14,583) (15,938) (14,981) (15,722) (15,186) (4,042) (10,877)








Dividends (1,041,856) (1,147,708) (1,260,242) (1,398,512) (1,514,068) (1,635,558) (1,645,240) (1,721,081)







Contents

PwC



179

Project Portiga




EBITDA 3,329,064 3,471,123 3,620,114 3,776,399 3,940,357 4,112,387 4,292,911 4,482,371




Income Tax Paid (744,046) (774,137) (807,474) (841,981) (879,572) (920,903) (959,547) (1,006,268)


Change in AP 8,019 8,417 8,837 9,278 9,742 10,230 10,744 11,285

Change in AR (11,412) (11,974) (12,565) (13,187) (13,842) (14,531) (15,256) (16,019)








Dividends (1,785,709) (1,857,930) (1,937,937) (2,020,754) (2,110,972) (2,210,167) (2,302,912) (2,415,044)







Contents

PwC



180

Project Portiga




EBITDA 4,681,235 4,889,994

Finance Income - -



Income Tax Paid (1,051,943) (1,109,049)


Change in AP 11,854 12,453

Change in AR (16,822) (17,667)








Dividends (2,524,663) (2,661,717)

Cash contribution at the end of concession (4,689,880)



Increase / (Decrease) in Cash 530,482 (3,663,159)



Contents

PwC


Projected cash flow statement of TPS Scenario 3: Self operate - BMT revenue, capex and cost calculation (1 of 4)

181

Project Portiga




EBITDA 878,697 1,052,096 1,030,078 985,394 993,627 1,101,995 1,228,393 1,341,646




Income Tax Paid (205,852) (243,404) (232,589) (219,951) (219,018) (243,747) (273,992) (298,819)


Change in AP 9,499 2,871 9,063 13,116 20,770 29,752 31,923 33,352

Change in AR (8,233) (15,723) (10,027) (9,199) (9,708) (11,923) (13,176) (12,475)


Total Cash Flow from Operations 740,387 795,840 796,524 769,359 785,670 876,077 973,149 1,063,704






Dividends (259,878) (192,340) (80,727) (211,439) (453,402) (514,872) (591,094) (717,165)




Increase / (Decrease) in Cash 61,475 - 0 - (259,770) - - 53,745



Contents

PwC


Projected cash flow statement of TPSScenario 3: Self operate - BMT revenue, capex and cost calculation (2 of 4)

182

Project Portiga




EBITDA 1,451,202 1,604,271 1,773,845 1,927,606 2,100,334 2,324,406 2,313,365 2,442,089




Income Tax Paid (325,818) (363,499) (405,251) (441,483) (482,289) (538,025) (534,089) (565,783)


Change in AP 32,402 26,758 15,999 15,747 15,331 8,558 9,612 9,393

Change in AR (10,327) (14,583) (15,938) (14,981) (15,722) (15,186) (4,042) (10,877)








Dividends (781,963) (872,397) (865,121) (866,495) (1,157,493) (1,291,260) (1,281,814) (1,357,880)


Total Cash Flow from Financing (781,963) (872,397) (865,121) (866,495) (1,157,493) (1,291,260) (1,281,814) (1,357,880)

Beginning Cash Balance 324,117 584,218 714,494 714,494 714,494 775,734 1,147,937 1,279,468

Increase / (Decrease) in Cash 260,101 130,277 - - 61,239 372,204 131,530 347,333


Ending Cash Balance 584,218 714,494 714,494 714,494 775,734 1,147,937 1,279,468 1,626,801

Contents

PwC


Projected cash flow statement of TPS Scenario 3: Self operate - BMT revenue, capex and cost calculation (3 of 4)

183

Project Portiga




EBITDA 2,574,203 2,714,422 2,865,085 3,013,173 3,177,898 3,356,254 3,531,243 3,732,027




Income Tax Paid (597,787) (631,901) (668,938) (704,007) (744,202) (788,273) (830,087) (879,962)


Change in AP 10,232 10,556 10,661 12,445 11,938 11,883 14,010 12,632

Change in AR (11,412) (11,974) (12,565) (13,187) (13,842) (14,531) (15,256) (16,019)








Dividends (1,434,688) (1,516,564) (1,605,451) (1,689,617) (1,786,085) (1,891,855) (1,924,946) (2,111,909)




Increase / (Decrease) in Cash 166,503 91,124 184,629 137,356 273,693 386,060 - 543,736



Contents

PwC


Projected cash flow statement of TPSScenario 3: Self operate - BMT revenue, capex and cost calculation (4 of 4)

184

Project Portiga




EBITDA 3,933,867 4,159,462

Finance Income - -



Income Tax Paid (929,096) (985,307)


Change in AP 14,400 13,470

Change in AR (16,822) (17,667)








Dividends (2,229,829) (2,364,736)




Increase / (Decrease) in Cash 203,341 717,931



Contents

PwC


Projected cash flow statement of TPSScenario 4: Joint operate - BMT revenue, capex and cost calculation (1 of 4)

185

Project Portiga




EBITDA 878,697 1,052,096 1,030,078 985,394 993,627 1,101,995 1,228,393 1,341,646




Income Tax Paid (205,852) (243,404) (232,589) (219,951) (219,018) (243,747) (273,992) (298,819)


Change in AP 9,499 2,871 9,063 13,116 20,770 29,752 31,923 33,352

Change in AR (8,233) (15,723) (10,027) (9,199) (9,708) (11,923) (13,176) (12,475)


Total Cash Flow from Operations 740,387 795,840 796,524 769,359 785,670 876,077 973,149 1,063,704






Dividends (259,878) (192,340) (80,727) (211,439) (453,402) (514,872) (591,094) (717,165)




Increase / (Decrease) in Cash 61,475 - 0 - - - - 53,745



Contents

PwC



186

Project Portiga




EBITDA 1,451,202 1,604,271 1,773,845 1,927,606 2,100,334 2,324,406 2,313,365 2,442,089




Income Tax Paid (325,818) (363,499) (405,251) (441,483) (482,289) (538,025) (534,089) (565,783)


Change in AP 32,402 26,758 15,999 15,747 15,331 8,558 9,612 9,393

Change in AR (10,327) (14,583) (15,938) (14,981) (15,722) (15,186) (4,042) (10,877)








Dividends (781,963) (872,397) (865,121) (866,495) (1,157,493) (1,291,260) (1,281,814) (1,357,880)


Total Cash Flow from Financing (781,963) (872,397) (865,121) (866,495) (1,157,493) (1,291,260) (1,281,814) (1,357,880)

Beginning Cash Balance 583,887 843,987 974,264 974,264 974,264 1,035,503 1,407,707 1,539,237

Increase / (Decrease) in Cash 260,101 130,277 - - 61,239 372,204 131,530 347,333


Ending Cash Balance 843,987 974,264 974,264 974,264 1,035,503 1,407,707 1,539,237 1,886,570

Contents

PwC



187

Project Portiga




EBITDA 2,574,203 2,714,422 2,865,085 3,013,173 3,177,898 3,356,254 3,531,243 3,732,027




Income Tax Paid (597,787) (631,901) (668,938) (704,007) (744,202) (788,273) (830,087) (879,962)


Change in AP 10,232 10,556 10,661 12,445 11,938 11,883 14,010 12,632

Change in AR (11,412) (11,974) (12,565) (13,187) (13,842) (14,531) (15,256) (16,019)








Dividends (1,434,688) (1,516,564) (1,605,451) (1,689,617) (1,786,085) (1,891,855) (1,924,946) (2,111,909)




Increase / (Decrease) in Cash 166,503 91,124 184,629 137,356 273,693 386,060 - 543,736



Contents

PwC


Projected cash flow statement of TPS Scenario 4: Joint operate - BMT revenue, capex and cost calculation (4 of 4)

188

Project Portiga




EBITDA 3,933,867 4,159,462

Finance Income - -



Income Tax Paid (929,096) (985,307)


Change in AP 14,400 13,470

Change in AR (16,822) (17,667)








Dividends (2,229,829) (2,364,736)







Contents

PwC


Projected cash flow statement of TPSScenario 5: Self operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

189

Project Portiga




EBITDA 1,092,283 1,234,769 1,285,262 1,317,908 1,396,364 1,551,771 1,718,739 1,875,163




Income Tax Paid (253,490) (273,133) (271,564) (271,105) (288,839) (322,302) (358,928) (392,616)


Change in AP (1,942) 2,718 4,323 6,126 10,211 15,663 17,326 17,826

Change in AR (6,684) (15,408) (9,827) (9,015) (9,514) (11,685) (12,912) (12,226)








Dividends (415,935) (345,446) (292,397) (485,993) (693,214) (773,524) (861,426) (942,279)







Contents

PwC



190

Project Portiga




EBITDA 2,000,911 2,184,783 2,386,487 2,573,896 2,770,516 2,958,572 2,990,866 3,116,725




Income Tax Paid (421,729) (464,759) (510,474) (566,976) (613,958) (663,447) (667,134) (697,899)


Change in AP 18,535 15,524 9,846 9,404 9,872 9,662 3,796 7,527

Change in AR (10,120) (14,291) (15,619) (14,681) (15,407) (14,882) (3,961) (10,660)








Dividends (1,012,151) (1,115,422) (1,225,137) (1,360,743) (1,473,500) (1,592,273) (1,601,122) (1,674,957)







Contents

PwC



191

Project Portiga




EBITDA 3,248,681 3,387,050 3,532,165 3,684,375 3,844,049 4,011,576 4,187,366 4,371,848




Income Tax Paid (723,950) (753,119) (785,486) (818,975) (855,494) (895,700) (933,160) (978,638)


Change in AP 7,901 8,294 8,708 9,143 9,601 10,083 10,591 11,124

Change in AR (11,183) (11,734) (12,314) (12,924) (13,565) (14,240) (14,951) (15,699)








Dividends (1,737,479) (1,807,486) (1,885,167) (1,965,539) (2,053,187) (2,149,680) (2,239,585) (2,348,730)







Contents

PwC



192

Project Portiga




EBITDA 4,565,478 4,768,733

Finance Income - -



Income Tax Paid (1,023,004) (1,078,734)


Change in AP 11,686 12,277

Change in AR (16,485) (17,314)








Dividends (2,455,209) (2,588,960)







Contents

PwC


Projected cash flow statement of TPSScenario 6: Joint operate - Revenue is lower by 2.0%, Overhead cost is higher by 2.0%(1 of 4)

193

Project Portiga




EBITDA 1,092,283 1,234,769 1,285,262 1,317,908 1,396,364 1,546,571 1,713,365 1,869,609




Income Tax Paid (253,490) (273,133) (271,564) (271,105) (288,839) (321,001) (357,584) (391,228)


Change in AP (1,942) 2,718 4,323 6,126 10,211 16,048 17,420 17,918

Change in AR (6,684) (15,408) (9,827) (9,015) (9,514) (11,685) (12,912) (12,226)








Dividends (415,935) (345,446) (292,397) (485,993) (693,214) (770,403) (858,202) (938,947)







Contents

PwC



194

Project Portiga




EBITDA 1,995,173 2,178,854 2,380,360 2,567,565 2,763,974 2,951,811 2,983,880 3,109,506




Income Tax Paid (420,295) (463,277) (508,942) (565,393) (612,323) (661,757) (665,388) (696,094)


Change in AP 18,633 15,586 9,871 9,429 9,898 9,689 3,824 7,556

Change in AR (10,120) (14,291) (15,619) (14,681) (15,407) (14,882) (3,961) (10,660)








Dividends (1,008,708) (1,111,864) (1,221,461) (1,356,944) (1,469,574) (1,588,217) (1,596,931) (1,670,626)







Contents

PwC



195

Project Portiga




EBITDA 3,241,222 3,379,342 3,524,200 3,676,144 3,835,544 4,002,788 4,178,284 4,362,464




Income Tax Paid (722,085) (751,192) (783,495) (816,917) (853,368) (893,503) (930,890) (976,292)


Change in AP 7,931 8,325 8,740 9,176 9,635 10,118 10,627 11,162

Change in AR (11,183) (11,734) (12,314) (12,924) (13,565) (14,240) (14,951) (15,699)








Dividends (1,733,004) (1,802,862) (1,880,388) (1,960,601) (2,048,084) (2,144,407) (2,234,136) (2,343,100)







Contents

PwC



196

Project Portiga




EBITDA 4,555,781 4,758,713

Finance Income - -



Income Tax Paid (1,020,579) (1,076,229)


Change in AP 11,725 12,317

Change in AR (16,485) (17,314)








Dividends (2,449,391) (2,582,948)







Contents

PwC


Projected cash flow statement of TPSScenario 7: Self operate - Long term throughput of 2.5 million TEUs (1 of 4)

197

Project Portiga




EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,595,742 1,766,750 1,927,031




Income Tax Paid (261,535) (282,095) (280,887) (280,688) (298,939) (333,294) (370,930) (405,583)


Change in AP (1,773) 2,750 4,369 6,189 10,323 15,856 17,539 18,048

Change in AR (8,233) (15,723) (10,027) (9,199) (9,708) (11,923) (13,176) (12,475)








Dividends (438,689) (372,050) (320,211) (514,622) (717,454) (799,906) (890,233) (973,399)


Total Cash Flow from Financing (438,689) (372,050) (320,211) (514,622) (1,020,695) (799,906) (890,233) (973,399)





Contents

PwC



198

Project Portiga




EBITDA 2,056,046 2,244,407 2,451,003 2,643,052 2,844,543 3,037,341 3,187,667 3,446,092




Income Tax Paid (435,513) (479,665) (526,603) (584,265) (632,465) (683,140) (716,335) (780,241)


Change in AP 18,759 15,732 9,993 9,540 10,014 9,797 8,286 12,574

Change in AR (10,327) (14,583) (15,938) (14,981) (15,722) (15,186) (12,267) (19,991)








Dividends (1,045,231) (1,151,196) (1,263,846) (1,402,237) (1,517,916) (1,639,535) (1,719,203) (1,872,577)







Contents

PwC



199

Project Portiga




EBITDA 3,724,382 3,887,637 4,058,964 4,238,786 4,427,546 4,625,712 4,833,777 5,052,259




Income Tax Paid (842,875) (878,266) (917,186) (957,577) (1,001,369) (1,049,234) (1,094,763) (1,148,740)


Change in AP 13,475 9,193 9,655 10,141 10,652 11,191 11,757 12,353

Change in AR (21,485) (13,454) (14,125) (14,832) (15,575) (16,358) (17,182) (18,048)








Dividends (2,022,900) (2,107,838) (2,201,246) (2,298,186) (2,403,285) (2,518,162) (2,627,431) (2,756,977)







Contents

PwC



200

Project Portiga




EBITDA 5,281,707 5,522,695

Finance Income - -



Income Tax Paid (1,202,061) (1,267,224)


Change in AP 12,981 13,641

Change in AR (18,961) (19,922)








Dividends (2,884,946) (3,041,338)







Contents

PwC


Projected cash flow statement of TPSScenario 8: Joint operate - Long term throughput of 2.5 million TEUs (1 of 4)

201

Project Portiga




EBITDA 1,124,463 1,270,618 1,322,553 1,356,241 1,436,764 1,590,644 1,761,481 1,921,587




Income Tax Paid (261,535) (282,095) (280,887) (280,688) (298,939) (332,020) (369,613) (404,222)


Change in AP (1,773) 2,750 4,369 6,189 10,323 16,234 17,631 18,138

Change in AR (8,233) (15,723) (10,027) (9,199) (9,708) (11,923) (13,176) (12,475)








Dividends (438,689) (372,050) (320,211) (514,622) (717,454) (796,847) (887,071) (970,133)







Contents

PwC



202

Project Portiga




EBITDA 2,050,420 2,238,594 2,444,996 2,636,845 2,838,129 3,030,713 3,180,818 3,439,014




Income Tax Paid (434,107) (478,212) (525,101) (582,713) (630,862) (681,483) (714,622) (778,471)


Change in AP 18,855 15,794 10,017 9,564 10,039 9,823 8,313 12,602

Change in AR (10,327) (14,583) (15,938) (14,981) (15,722) (15,186) (12,267) (19,991)








Dividends (1,041,856) (1,147,708) (1,260,242) (1,398,512) (1,514,068) (1,635,558) (1,715,094) (1,868,331)







Contents

PwC



203

Project Portiga




EBITDA 3,717,069 3,880,080 4,051,155 4,230,717 4,419,208 4,617,096 4,824,873 5,043,059




Income Tax Paid (841,047) (876,377) (915,234) (955,560) (999,284) (1,047,080) (1,092,537) (1,146,440)


Change in AP 13,504 9,223 9,686 10,173 10,685 11,225 11,792 12,390

Change in AR (21,485) (13,454) (14,125) (14,832) (15,575) (16,358) (17,182) (18,048)








Dividends (2,018,512) (2,103,304) (2,196,561) (2,293,344) (2,398,282) (2,512,992) (2,622,089) (2,751,457)







Contents

PwC



204

Project Portiga




EBITDA 5,272,200 5,512,871

Finance Income - -



Income Tax Paid (1,199,684) (1,264,768)


Change in AP 13,019 13,681

Change in AR (18,961) (19,922)








Dividends (2,879,242) (3,035,444)







Contents

PwC CF is owned by PricewaterhouseCoopers LLP, a member firm of the PricewaterhouseCoopers Network,

and is a member of FINRA and SIPC. PwC CF is not engaged in the practice of public accountancy. 205

August 2011

© 2015 PT PricewaterhouseCoopers Indonesia Advisory. All rights reserved. In this document, “ PwC” refers to PT PricewaterhouseCoopers Indonesia Advisory which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

Draft

portiga - final report phase i

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