17 May 2018

Strong Performance Continued

PT Indo Tambangraya Megah Tbk. (ITM) maintained its strong financial performance in the first quarter of 2018. The Company recorded a slight increase in net income compared with net incomes in the first quarter last year. This strong financial performance was achieved despite the lower production caused by an extreme rainfall.

Net income was booked at USD 58 million in the first quarter of 2018 versus USD 57 million in the same period last year. Average selling price in the first quarter was at USD 83.6 per ton, rose by 24% from USD 67.5 per ton in the same period last year.

Higher average selling price resulted from higher demand particularly in China due to restricted domestic supply which continued to the beginning of the year.

The company booked sales revenue of USD 379 million, 3% higher than USD 368 million in the same period last year. Gross profit margin during this period was at 29% compared to 31% in the same period last year, while EBIT slightly lower by 1% to USD 88 million on year-on-year basis. Earnings per share this quarter was USD 0.05.

By the end of the first quarter of 2018, ITM’s total assets were valued at USD 1373 million while total equity was USD 873 million. The company has maintained a net cash position of USD 424 million with zero debt at the end of the first quarter.

The Company sold 4.4 million tons in the first quarter, lower by 19% than the same period last year, which was shipped to Japan (0.9 million tons), China (0.7 million tons), Philippines (0.5 million tons), Indonesia (0.5 million tons), India (0.4 million tons), Thailand (0.3 million tons), South Korea (0.3 million tons), and other countries in East, South, and Southeast Asia.

Sales volume was lower as a result of lower output due to heavy rainfall. The company produced 4.4 million tons in the first quarter. As for 2018, our sales volume target has been set at 25 million tons, of which 69% has already been sold. From 25 million tons, 22.5 million tons is expected to come from our production while the remaining 2.5 million tons would be from PT ITM Indonesia, our subsidiary.

For 2018, ITM will continue to execute its core strategies: to capture margins along the value chain and maximize long term value to shareholders.

In order to capture additional margins, ITM is expanding its operation in contract mining. We are looking to expand our mining fleet to the Melak cluster. This would help us improve productivity and control costs better. On the other hand, PT GasEmas, acquired last year, is now our fuel procurement arm. The direct procurement has helped us to reduce fuel costs significantly. We will continue to find ways to enhance margins through operational excellence, improving productivity and enhancing business process.

All these margin improvement initiatives would then increase our optionality to optimize our reserves. With more margins, we could access new area, mine deeper hence increase our reserves. Our initiatives have resulted in 77 million tons additional reserves, announced last quarter. We will continue to optimize our mine planning as well as evaluating inorganic opportunities to maximize long term shareholders value.

Our capital expenditure budget for 2018 is approximately USD 40 million. Majority of this will be used in a mining fleet expansion of PT Tambang Raya Usaha Tama (TRUST).

Additionally, the company is actively evaluating new investment and acquisition opportunities in conventional and renewable energy.