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20231030_ADMR_Laporan Informasi dan Fakta Material_31483260_lamp1.pdf
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PT ADARO MINERALS INDONESIA TBK (IDX: ADMR) 9M23 EARNINGS
NEWS RELEASE
Jakarta, October 30, 2023 – PT Adaro Minerals Indonesia Tbk (IDX: ADMR) today submitted its
consolidated financial statements for the nine-month period ending September 30, 2023 to the
OJK/IDX.
ADMR’s President Director, Mr. Christian Ariano Rachmat, said:
“Despite challenges in the external environment, these results reflect our ability to execute
on production growth, which has sustained our profitability. Overall demand for our
premium hard met coal product remains strong, leaving us confident for the future.
“Furthermore, construction of KAI’s aluminium smelter and its ancillary facilities
continues to make progress. We expect this project to be completed by Q3 2025, a
significant milestone in our efforts to support Indonesia’s downstream initiatives at the
Kaltara Green Industrial Park.”
Highlights
• Production volume in 9M23 reached 3.98 million tonnes (Mt) with sales reaching 3.01 Mt, a
55% and 38% increase from 9M22, respectively.
• Overburden removal volume increased 128% to 13.81 million bank cubic meter (Mbcm), with
our strip ratio reaching 3.47x compared to 2.36x in 9M22.
• 9M23 operational EBITDA of $358.1 million was 13% lower on the back of higher costs and
lower average selling price (ASP). Core earnings declined 11% to $258.1 million. Operational
EBITDA and core earnings exclude non-operational items and reflect the performance of our
core business.
• Our CAPEX in 9M23 reached $95.7 million. We advanced construction of PT Kalimantan
Aluminium Industry’s (KAI) aluminium smelter whilst infrastructure projects at PT Maruwai
Coal (MC) continue to progress.
• PT Kalimantan Aluminium Industry has appointed all main contractors for aluminium smelter
construction and installation. KAI has completed land clearing for permanent dorms, coastal
jetty breakwater, construction of ancillary facilities, earthworks, and construction of a
temporary jetty and continues to work on the construction of other infrastructure related
facilities.
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Financial Performance
($ thousand, except otherwise stated) 9M23 9M22 Change
Revenue 720,628 666,485 8%
Cost of revenue (341,019) (251,599) 36%
Gross profit 379,609 414,886 -9%
Operating income 333,255 387,654 -14%
Core earnings1 258,099 291,586 -11%
Operational EBITDA2 358,609 411,494 -13%
Total assets 1,517,974 1,242,970 22%
Total liabilities 671,856 753,090 -11%
Total equity 846,118 489,880 73%
Interest bearing debt 405,447 561,501 -28%
Cash 581,881 401,826 45%
Net debt (cash) 3 (176,434) 159,676 -210%
Capital expenditure4 95,728 4,853 1873%
Free cash flows5 151,967 253,046 -40%
Basic earnings per share (EPS) in US$ 0.0061 0.0070 -13%
Financial Ratios
9M23 9M22 Change
Gross profit margin (%) 52.7% 62.2% -10%
Operating margin (%) 46.2% 58.2% -12%
Operational EBITDA margin (%) 49.8% 61.7% -12%
Net debt (cash) to equity (x) (0.21) 0.33 -163%
Net debt (cash) to last 12 months operational EBITDA (x) (0.49) 0.39 -227%
Cash from operations to capex (x) 2.39 62.97 -96%
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Profit for the period, excluding non-operational items net of tax.
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EBITDA excluding non-operational items.
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After deduction of cash and cash equivalents.
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Capex spending defined as: purchase of fixed assets + payment for addition of exploration and evaluation asset.
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Operational EBITDA – taxes – change in net working capital – capital expenditure.
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Operating Segment
Revenue Profit for the period
($ thousand) 9M23 9M22 % Change 9M23 9M22 % Change
Coal mining 719,073 664,404 8% 254,797 298,025 -15%
Other services 2,996 3,556 -16% (3,304) (10,781) -69%
Elimination (1,441) (1,475) -2% - - -
ADMR Consol 720,628 666,485 8% 251,493 287,244 -12%
FINANCIAL PERFORMANCE ANALYSIS FOR THE FIRST NINE MONTHS OF 2023 (9M23)
Revenue, Average Selling Price and Production
ADMR’s revenue in 9M23 increased 8% to $720.6 million driven by a 38% increase in sales
volume balanced by a 21% decline in ASP. ADMR’s high-quality metallurgical coal product was
sold to a diversified mix of steelmakers in Japan, China, India, Indonesia, and South Korea.
ADMR’s production volume in 9M23 increased 55% to 3.98 Mt, supported by heavy equipment
availability and solid contractor performance. ADMR recorded overburden removal of 13.81
Mbcm, 128% higher than in 9M22, resulting in a strip ratio of 3.47x for 9M23.
Cost of Revenue
Cost of revenue in 9M23 increased 33% to $341.0 million mainly due to higher production
volumes. Royalties to the Government increased 2% to $121.2 million, mining costs increased
95% to $83.4 million, coal processing costs increased 51% to $50.2 million, and freight and
handling costs increased 38% to $82.1 million. Fuel consumption in 9M23 increased 49%, while
fuel cost per litre was flat y-o-y. Coal cash cost per tonne in 9M23 increased by 13%.
Operating Expenses
Operating expenses in 9M23 increased 83% to $48.4 million on the back of a significant increase
in allowances for government charges. Selling and marketing costs in 9M23 increased 55% to
$8.2 million in line with higher sales volumes. Employee costs also increased 86% to $5.7 million
as the workforce grows to facilitate our expansion.
Operational EBITDA and Core Earnings
Operational EBITDA in 9M23 declined 13% to $358.6 million, and operational EBITDA margin for
the period was 49.8%. Core earnings in 9M23 declined 11% to $258.1 million. Profitability
declined as metallurgical coal prices were weaker in the period and we booked higher costs driven
by higher volume.
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Total Assets
Total assets increased 22% to $1.52 billion at the end of 9M23, consisting of $763.8 million in
current assets and $754.1 million in non-current assets. Cash balance at the end of 9M23
increased 45% to $581.9 million on the back of strong cash flow generation. Cash accounted for
38% of total assets.
Fixed Assets
Fixed assets as at the end of 9M23 were $496.1 million, a 24% increase from the year ago
period mainly due to investments in KAI’s aluminium smelter and infrastructure projects at MC.
Fixed assets accounted for 33% of total assets.
Mining Properties
Mining properties as at the end of 9M23 declined by 6% year-on-year to $176.1 million in-line
with production.
Total Liabilities
At the end of 9M23, total liabilities declined by 11% to $671.9 million. Current liabilities increased
46% to $232.1 million driven by higher accrued expenses related to allowances for government
charges.
Non-current liabilities declined by 26% to $439.8 million at the end of 9M23 as loans from
shareholders declined by 44% to $316.9 million, having repaid a total of $170.6 million. Bank
loans, net of loan financing costs, at the end of 9M23 were $88.6 million as we began to draw
down loan for KAI.
Equity
At the end of 9M23, equity increased 73% to $846.1 million mainly due to an 82% increase in
retained earnings to $664.4 million.
Cash Flows from Operating Activities
In 9M23 our cash flows from operating activities declined by 25% to $229.0 million mainly driven
by higher payments to suppliers and higher royalties due to higher sales volume. Corporate
income tax payment also increased 114% to $115.1 million due to higher profitability in FY22.
Cash Flows from Investing Activities
We recorded net cash flows used in investing activities of $102.0 million in 9M23, driven by the
significant increase in purchases of fixed assets to $94.8 million in 9M23 related to MC’s
infrastructure projects and KAI’s aluminium smelter construction.
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Capital Expenditure and Free Cash Flow
Capital expenditure in 9M23 was $95.7 million mainly related to MC’s infrastructure projects and
construction of aluminium smelter under KAI. Free cash flow in 9M23 declined 40% to $152.0
million as we execute our investment plans.
Upon completion, the infrastructure upgrade projects will support our medium-term production
target of 6 Mtpa and will enable us to reliably deliver our volume commitments to customers.
The first phase of KAI’s aluminium smelter is expected to reach its commercial operations date
(COD) in 2025 – which will diversify our revenue streams.
Cash Flows from Financing Activities
Net cash flow used in financing activities in 9M23 declined 24% to $57.8 million, as in the period
we made loan repayment to shareholders of $170.6 million and drew down $88.3 million of bank
loans, net of loan financing costs.
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PT ADARO MINERALS INDONESIA TBK 9M23 ACTIVITIES REPORT
PT Maruwai Coal and PT Lahai Coal
• Production volume in 9M23 reached 3.98 million tonnes (Mt), a 55% increase over the
period. Sales volume reached 3.01 Mt, 38% higher than in 9M22, putting us on track to
achieve our FY23 volume target of 3.8 – 4.3 Mt.
• Overburden removal reached 13.81 Mbcm in 9M23, 128% higher than in 9M22, leading
to a 9M23 strip ratio of 3.47x, 47% increase from 9M22.
• We began operation activities from PT Lahai Coal (LC) in the quarter and recorded 1.62
Mbcm of overburden removal volume and 0.08 Mt of production volume.
3Q23 vs. 3Q23 vs. 9M23 vs.
Units 3Q23 2Q23 3Q22 9M23 9M22
2Q23 3Q22 9M22
Overburden Removal Mbcm 6.27 4.25 47% 2.55 145% 13.81 6.05 128%
Maruwai Mbcm 4.65 4.25 9% 2.55 82% 12.20 6.05 102%
Lahai Mbcm 1.62 - 100% - 100% 1.62 - 100%
Production Volume Mt 1.44 1.32 9% 1.04 39% 3.98 2.56 55%
Maruwai Mt 1.36 1.32 3% 1.04 30% 3.90 2.56 52%
Lahai Mt 0.08 - 100% - 100% 0.08 - 100%
Sales Volume Mt 1.19 0.97 23% 0.90 32% 3.01 2.19 38%
Maruwai Mt 1.19 0.97 23% 0.90 33% 3.01 2.19 37%
Lahai Mt - - - - - - - -
• Japan remains the largest market for ADMR in the period, and we saw volume increase
from China in line with its increasing demand for imported coal. We are also encouraged
by growth prospects in other regional markets and continue our marketing efforts in other
key steel producing countries. The chart below shows our sales destination by country in
9M23.
Korea
7%
Indonesia
14% Japan
33%
India
20%
China
26%
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• We continue our ongoing investment in facilities and infrastructure through the upgrading
of our hauling roads, expansion of fuel storage facilities, and staff accommodation.
Moreover, we have appointed a contractor for the construction of our second barge
loading conveyor facility. This expansion will increase our barge loading capacity and
efficiently support logistics to increase sales volume.
• Furthermore, supporting our planned production increase to 6 Mtpa, MC’s tender process
for the staff facilities expansion in the Lampunut area is coming to a close with construction
planned to start within the first quarter of 2024.
PT KALIMANTAN ALUMINIUM INDUSTRY (KAI)
• Through KAI, ADMR is actively developing opportunities in the mineral space, with a focus
on downstream minerals processing. This business leads the Adaro Group’s
transformation to support the green economy and pursue sustainable growth.
• After signing of facility agreement in 2Q23, KAI is now focused on the pre-construction
stage of the aluminium smelter project. By end of 3Q23, KAI has completed land clearing
of the permanent dorms, coastal jetty breakwater, and construction of ancillary facilities
such as an outdoor laydown warehouse, heavy equipment workshop, and batching plant.
KAI has also started the piling works for the foundation of the aluminium smelter area, and
the construction of other supporting facilities including a temporary camp, indoor
warehouse, and brick factory.
• KAI has appointed all main contractors for the aluminium smelter construction and
installation. Moving forward, in 4Q23 KAI will continue to work on soil improvement and
land levelling in the aluminium smelter area, and continue with dredging, construction of
heavy cargo, universal cargo, and berthing trestle for the jetty area.
HEALTH, SAFETY, AND ENVIRONMENT (HSE)
As part of our commitment to strengthen the safety culture among our employees and contractors,
we continue to preserve and advance the implementation of Adaro Group’s Adaro Zero Accident
Mindset (AZAM). Our health and safety programs focus on the implementation of Good Mining
Practices (GMP) through various means, including, among others, health and safety risk
assessments, workplace inspections, industrial health and hygiene inspections, safety training,
awareness strengthening, and working environment monitoring.
During the first nine months of 2023, MC and LC experienced one lost-time injury (LTI) incident
involving one of their contractors, resulting in a lost-time injury frequency rate (LTIFR) of 0.46,
with a severity rate standing at 17.17. Furthermore KAI recorded zero LTI incidents, LTIFR, and
severity rates in the third quarter of 2023. The total man-hours worked during these nine months
for MC and LC were 8,737,168 and for KAI was 3,155,422.
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CORPORATE ACTIVITIES
Launching of Enviromet – Indonesia’s First Hard Coking Coal Product
ADMR launched Enviromet at the 2023 Coaltrans Asia event in Bali. Enviromet is Indonesia’s first
hard coking coal product which has low ash, low phosphorus, and high vitrinite, making this a
premium product in the metallurgical coal market. These qualities are essential in maintaining an
efficient, high quality and environmentally friendly coke and steel making.
Initial Public Offering Funds Usage Report as of September 2023
In compliance with the regulations of the Financial Services Authority (OJK) in Indonesia
regarding the utilization of Initial Public Offering funds, we have disclosed our fund allocation as
of September 2023 to the public. All IPO proceeds have now been used. From the remaining
balance, an amount of Rp342.8 billion has been transferred to MC for their capital expenditure
related to infrastructure development.
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These materials have been prepared by PT Adaro Minerals Indonesia Tbk (the “Company”) and have not been
independently verified. No representation or warranty, expressed or implied, is made and no reliance should be placed
on the accuracy, fairness or completeness of the information presented or contained in these materials. The Company
or any of its affiliates, advisers or representatives accepts no liability whatsoever for any loss howsoever arising from
any information presented or contained in these materials. The information presented or contained in these materials
is subject to change without notice and its accuracy is not guaranteed.
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These materials contain statements that constitute forward-looking statements. These statements include descriptions
regarding the intent, belief or current expectations of the Company or its officers with respect to the consolidated results
of operations and financial condition of the Company. These statements can be recognized by the use of words such
as “expects,” “plan,” “will,” “estimates,” “projects,” “intends,” or words of similar meaning. Such forward-looking
statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ
from those in the forward-looking statements as a result of various factors and assumptions. The Company has no
obligation and does not undertake to revise forward-looking statements to reflect future events or circumstances.
These materials are for information purposes only and do not constitute or form part of an offer, solicitation or invitation
of any offer to buy or subscribe for any securities of the Company, in any jurisdiction, nor should it or any part of it form
the basis of, or be relied upon in any connection with, any contract, commitment or investment decision whatsoever.
Any decision to purchase or subscribe for any securities of the Company should be made after seeking appropriate
professional advice.
For further information please contact:
Investors
Thomas Coombes | Thomas.Coombes@adaro.com
Media
Febriati Nadira | Febriati.Nadira@adaro.com
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