INVESTOR PRESENTATION - Consolidated 3M-2019 Update - Perusahaan Gas Negara Persero Tbk PT
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INVESTOR PRESENTATION Consolidated 3M-2019 Update
DISCLAIMER The information contained in our presentation is intended solely for your personal reference. In addition, such information contains projections and forward-looking statements that reflect the Company’s current views with respect to future events and financial performance. These views are based on assumptions subject to various risk. No assurance can be given that further events will occur, that projections will be achieved, or that the Company’s assumptions are correct. Actual results may differ materially from those projected. ABOUT PGAS HEADQUARTER PT Perusahaan Gas Negara Tbk (IDX:PGAS) is an Indonesia-based, Jl. K.H. Zainul Arifin No. 20 Jakarta, Indonesia publicly listed company engaging in integrated gas business. Website: www.pgn.co.id Previously established as a State-Owned Company (SOE), PGAS has been officially acquired by PT Pertamina (Persero) to become Investor Relations Contact: its subsidiary since 11 March 2018 as part of Government of PT Perusahaan Gas Negara Tbk Indonesia’s Oil & Gas Holding initiatives. With the acquisition of Mid Tower Manhattan 26th Floor 51% stake in PT Pertamina Gas (and its subsidiaries), PGAS has Jl. TB Simatupang Kav. 1-S, Jakarta, Indonesia formally been the Gas Sub-holding Company since 28 December Email: investor.relations@pgn.co.id 2018. Phone: +62 21 8064 1111 2
Contents 1. Quarterly Highlights 2. Operational Performance 3. Financial Performance 4. Revised FY19 Business Projections 5. Appendices 3
Quarterly Highlights
About Us VISION Becoming the International Standardized 1 Serie A Solution for the Utilization of Gas and the Sustaining Energy Fulfilment MISSION We are committed to: • Provide and develop gas utilization for public 43,04% and public interest Public • Implementing responsible and sustainable corporate governance principles • Carry out other business to support the use 56,96% of gas and sustainable business management. Type Public Founded 13 May 1965 CEO Gigih Prakoso Total Assets USD 7.9 Billion (2018) Index IDX:PGAS Headquarter Jakarta Industry Gas Transmission &Distribution No. Employees 3,109 (2018) 5
Business Focus As Sub-Holding Gas Sourcing Transmission Distribution Retail & Trading Storage & Gas Utilities Supports & Others Execution Processing SUB HOLDING SUB HOLDING GROUP BUSSINESS MODEL PRODUCTS BUSINESS FIELD GROUP Exploration & Gas Sales Agreement Sinergi (Industry & Production Commercial PIPELINE GAS Customers) BU Infrastruktur Gas Transportation EPC and O&M Agreement Gas Kita (Household Engineering Services CNG Terminal Usage Customers) Agreement ICT Business Solution Gas Link (CNG/LNG) Gas Storage Asset and Facility LNG Wholesaler LNG Management GasKu Manpower Service (Transportation / BBG Provider Gas Hub & Trading Customers) BU Gas Product 6
944 3M – 2019 HIGHLIGHTS 861 Consolidated Statement of Comprehensive Income 3M-2018 3M-2019 644 575 USD Million DOWNSTREAM GAS INFRASTRUCTURE UPSTREAM 299 285 309 263 Overall Net Lifting 178 163 91 30,230 BOEPD 65 Distribution & Transmission Pipeline Network (YoY down 27%) 2,904 MMSCFD ±10,099 km Revenue Cost of Revenue Gross Profit Operating Net Income EBITDA Oil 5,008 BOPD Distribution Volume Distribution Pipeline (YoY down 35%) Income 919 MMSCFD (YoY down 4%) ±5,348 km Gas 93 BBTUD 5% (Incl. Pertagas) 11% Distribution & D&T and Others Transmission Pipeline (YoY down 26%) Transmission 27% Transmission Volume Upstream ±4,751 km LNG 47 BBTUD Upstream 1,985 MMSCFD (YoY down 5%) (YoY down 27%) Others 73% (Incl. TGI, KJG & Pertagas) Non – Pipeline Assets 84% LPG 87 MTPD LNG Infrastructure (YoY down 4%) EBITDA Contribution Others Downstream Revenue Contribution 2 FSRUs Oil Transportation 1 land-based terminal Consolidated Statement of Financial Position 11,172 BOPD CNG Infrastructure 7.939 31-Dec-18 31-Mar-19 7.509 (YoY up 15%) 12 Gas Fueling Stations Regasification 4 MRUs 120 BBTUD (YoY up 14%) USD Million 5.466 5.433 4.737 LPG Infrastructure 4.214 LPG Processing 2 Processing plant 3.133 3.124 3.202 3.295 773 MTPD 2.474 (YoY down 3%) 2.075 1.605 1.090 Current Assets Non Current Total Assets Current Non Current Total Total Equity Assets Liabilities Liabilities Liabilities 7
Operational Performance
Contribution - Distribution D i s t r i b u t i o n Vo l u m e Industrial Consumption of Total Sales Number of Customers Year-on-Year Basis Wood 0,03% 2,331 Lifting Oil 0,2% -4% Cement 0,4% 1000 962 953 919 CNG 1% 894 Total Textile 2% 900 Customers 802 803 Basic Metal 3% Others 3% 229,329 0.5% BBTUD 800 (Excl. Pertagas) Paper 4% 700 Glass 4% Fabricated Metal 6% 231,660 Total 600 Food 9% Sales Five Biggest Segments Ceramic 9% 500 Chemical 13% Households & Small Businesses 2015* 2016* 2017 2018 3M-18 3M-19 Pertagas Customers 12% 99.5% Commercials, Industries & Power * Excl. Pertagas Power Plant 33% 25.34 22.04 22.67 22.09 Natural Gas 18.73 18.70 18.49 Price Unit Price 8.00 8.67 USD/MMBTU vs 3.60 Exchange Rate Other IDR/USD : 14,244 Alternative (as of 31 March 2019) Average Gas MFO MDF/IDO Kerosene HSD RON 88 LPG - 50 kg LPG - 12 kg LPG - 3 kg Coal Fuels Sales Price (Diesel) 9
Contribution –Transmission Tr a n s m i s s i o n V o l u m e Operated by PGN Operated by KJG Year-on-Year Basis ▪ Total Length: ± 200 km (Kepodang- Tambak ▪ Total Length: ±1,145km (incl. SSWJ) Lorok) ▪ Off-taker: PLN, BBG 2.078 2.101 2.098 ▪ Off-taker : PLN 2.100 1.985 ▪ Gas transported by PGN to PLN YoY from ▪ Volume 30 MMScfd (down YoY by 53.38%) 19 to 20 MMScfd 1.900 ▪ Gas transported from Kepodang field operated by Petronas through Kalimantan – Java pipeline 1.700 decreased by 34 MMScfd from 64 to 30 MMScfd (MMscfd) due to declining reserve from supplier 1.500 Operated by TGI 1.300 Operated by Pertagas ▪ Total Length: ± 1,000 km 1.100 ▪ Total Length: ± 2,399 km (spread across ▪ Off-taker: CPI, Gas Supply Pvt. Ltd., PGN, PLN 789 900 795 North Sumatra, South Sumatra, West Java, ▪ Total Volume: 653 MMScfd East Java, and East Kalimantan) ▪ Gas transported by TGI to off-taker in 700 ▪ Volume of 1,283 MMScfd (decreased from Singapore and Batam increased 9 MMScfd 1,372 MMScfd). 500 2015* 2016* 2017 2018 3M-2018 3M-2019 * Excl. Pertagas 10
Contribution – Upstream Oil and Gas Lifting Crude Oil & Condensate (MMBBL) Gas (BBTU) LNG (BBTU) Pangkah Mar-18 3.271 Sanga-Sanga Muara Bakau Mar-18 0,14 Mar-18 4.849 Pangkah Mar-19 2.326 Mar-19 4.226 Mar-19 0,30 Mar-18 305 SES 41,624 Mar-19 - Mar-18 929 boepd Ketapang Mar-18 0,14 Mar-18 719 Mar-19 - SES 11.068 30,230 Mar-19 637 boepd Mar-19 - Mar-18 1.051 3M-18 3M-19 Muriah Total LNG Lifting 5,778 4,226 LNG Mar-19 490 Mar-18 0,21 8.096 Ketapang Gas Mar-18 4.574 LPG (MT) Fasken LPG Mar-19 Mar-19 4.511 21.851 0,15 Mar-18 7.779 Pangkah Oil Bangkanai Mar-18 470 16.115 Mar-19 7.840 Mar-19 448 Sanga-Sanga Mar-18 0,19 1.052 Sanga-Sanga Mar-18 1.017 Sanga- Sanga Mar-18 382 1.010 Mar-19 - 7.653 Mar-19 - 5.008 Mar-19 - 3M-2018 3M-2019 3M-2018 3M-2019 3M-18 3M-19 3M-18 3M-19 Total Crude Oil Lifting 0.69 0.45 Total Gas Lifting 11,406 8,412 Total LPG Lifting 8,160 7,840 11
Market and Infrastructure Development (Existing and Planned) Customer Attachment Medan Potential : 0.11 BBTUD ▪ Market development by construction of distribution backbone Realized Gas In : 0.02 BBTUD ▪ Delivering gas to RD by developing pipeline or modifying system in station ▪ Customer attachment to build acccess until last mile Customer Attachment Dumai Potential : 0.64 BBTUD Transmission Duri – Dumai 24” - ± 67 km Pipeline Coverage Area: Tarakan 12 Province & 53 Cities/Regencies Customer Attachment Palembang Customer Attachment Batam Sorong Potential : 0.01 BBTUD Potential : 0.69 BBTUD Realized Gas In : 0.69 BBTUD Customer Attachment Cilegon Market Development Purwakarta Subang Customer Attachment Cirebon Potential : 0.07 BBTUD 8” - ± 18 km Pipeline Potential : 0.13 BBTUD Realized Gas In : 0.07 BBTUD Customer Attachment Tangerang Customer Attachment Surabaya Potential : 2.54 BBTUD Potential : 1.21 BBTUD Realized Gas In : 0.81 BBTUD Realized Gas In : 0.14 BBTUD Distribution Area Customer Attachment Jakarta Customer Attachment Karawang Customer Attachment Pasuruan PGN ExistingTransmission Potential : 0.29 BBTUD Realized Gas In : 0.07 BBTUD Potential : 1.69 BBTUD Potential : 0.47 BBTUD Planned PGN Transmission Pertagas Existing Transmission Pengembangan Distribusi (on going) Customer Attachment Bekasi Customer Attachment Bogor Customer Attachment Sidoarjo Potential : 0.92 BBTUD Potential : 1.03 BBTUD Potential : 0.47 BBTUD FSRU Realized Gas In : 0.14 BBTUD Realized Gas In : 0.01 BBTUD 12
Financial Performance
Financial Performance Balance Sheet (in USD 31 March 31 December Revenue 31 March 31 March Cash Flow 31 March 31 March millions) 2019 2018 (in USD million) 2019 2018 (In Million USD) 2019 2018 Total Assets 7,509 7,939 Gas Distribution 662 685 Beginning Balance 1,315 1,140 Gas Transmission 57 59 Total Liabilities 4,214 4,737 6 6 Cash flow from operating 223 223 Oil Transportation Total Equity 3,295 3,202 E&P 93 133 Cash flow from investment (43) (63) 31 March 31 March Fiber Optic 3 3 Financial Ratios 2019 2018 6 12 Cash flow from financing (636) (9) Finance Lease EBITDA Margin (%) 31% 33% 25 30 Gas Processing Foreign Exchange Impact 11 (9) EBITDA /Interest Expense 5.9x 9.1x 7 15 Others Interest Bearing Debt/Equity 0.8% 0.8% 861 944 Ending Balance 870 1.282 Total Credit Rating RATING OUTLOOK Total Loan USD 2.91 Billion Weighted Average Interest Rate 4.36% (Excl. Tax) Baa2 Stable BBB- Negative 19% 12% USD Fixed Float JPY BBB- Stable idAAA Stable 81% 88% 14
Revised FY19 Business Projections
Revised 2019 Business Projections Operating Metrics Distribution Volumes (in MMSCFD) 970 – 990 Transmission Volume (in MMSCFD) 2,070 – 2,100 Upstream Lifting Volumes (in MMBOE) 10.5 – 11.0 Regasification Gas (in BBTUD) 125 – 130 Processed Gas (in MTPD) 740 - 770 Financial Metrics Gross Profit/Unit (US$/MMBTU) 2.0 – 2.5 Capex (in US$ million) 425 – 450 16
Appendices
14 18 Government Regulations Weighted Average of End User = + + DOWNSTREAM Households & Small Costumers PIPELINE GAS PRICE (stipulated by Regulatory Body) Infrastructure Infrastructure Management Cost Trading Cost Implementation Management Formula EMR Ministerial • Toll fee stipulated by regulatory = Cost of Service / Volume • Industry and Electricity provider • Maximum 7% of cost of gas Regulation body Cost of Service are: • The maximum percentage gas price stipulated by Minister Industry and Electricity Provider • Gas distribution setup by: IRR 11%, (PERMEN ESDM) • Asset value should be shared B2B in of EMR 60% utilization/gas allocation & • O&M extended gas supply chain • Prevail for 5 years and open to No. 58/2017 project economics • G&A be evaluated per annum Gas for Transportation • Liquefaction • Gas Losses • 18 months grace period from (stipulated by Minister)stipulated • Compression • Insurance date of signatory by • Regasification • Fee (27 December 2017) • LNG/CNG storage & transportation • Tax and levy Minister Transmission Segment Facilities and Supporting Infrastructure for Gas EMR Ministerial • Based on: gas source, market Masterplan of Natural Gas Utilization Regulation and gas infrastructure • Minister allow consumer to build and operate an own (PERMEN ESDM) condition Transmission and Distribution pipeline gas and facility with consideration of gas • Segment evaluation and source, availability infrastructure and unavailable No. 4/2018 appointment stipulated by Network demand for 5 years regulatory body • The consumer will not be given gas transportation special right Downstream Gas Business Transmission Distribution and Trading Area Non Pipeline Trading Non Pipeline Transportation and Storage • Transporter should acquired • The holder of distribution network special right will be given distribution • Trader using CNG and LNG mode business permit including and trading area including gas allocation from tender proposal should acquire business permit and • Permit for transportation and owning pipeline and facility • The special right exclusively for 30 years for new area and 15 years for owning or controlling the asset storage including: CNG or LNG • Special right of new existing infrastructure owner • Asset categorized as LNG receiving transportation, CNG or LNG transmission segment will be • Area tender mechanism will consider existing infrastructure and terminal, regasification unit, storage awarded in tender consumer compression and decompression • Business licencee have to own mechanism or minister • Special right holder can cooperate with other to directly selling gas to end facility, gas filling station or else or control the facility appointment user in sub trading area 18
19 Potential Synergies From Transaction • Optimizingthe existing Business inside Pertamina Group: infrastructures • Upstream: Crude Oil, Trading/Export/Domestic • Alignment of business, Refineries, LNG Plant, Production Facilities pricing, marketing • Midstream: Refineries (total capacity 1.1 Mio bbl/d, • Operational savings Petrochemical Plants, LPG Plants, LNG Shipping (consultants, IT, Building, PERTAMINA • Downstream: Distribution through fuel depots and O&M, etc) stations; kerosene, gasolene, diesel, HSD, LPG, LNG (~5 MTPA) • Secure new gas supplies from Pertamina PERTAGAS Pertagas Values: • Secure business deals for • About 2,000 km transmission pipeline (2017) PGAS Subsidiaries • About 1,375 mmscfd transmission volume (2017) • Cost Savings as member of and 128 mmscfd of distribution volume (2017) Pertamina • Est. Long-term annual volume growth 2% • FY17 Earnings of USD141 Mio • Segmentation in the existing areas PGAS Stand Alone: • Penetration of new • Distribution 800-850 mmscfd with estimate volume (domestic & International) annual growth 2% markets • Transmission volume of ~ 700 mmscfd • Increase of gas product sales • Market Cap of ~ IDR 51 trillion (LNG, CNG, City gas) • Total asset size of US$6 billion • Eight Subsidiaries 19
Proposed Synergy Initiatives until 2022 Additional Annual EBIT Contribution (in USD Mio) By Year 2022 Estimated Synergy Value 2019 – 2022 $330.48 R Business Alignment & Optimization with Pertagas (ST/MT) 40-50 40% Cost Savings $12.70 (4%) 140 Mainly from Pipeline Optimalization for Tanjung Priok and Balongan Additional Operating Income $317.78 (96%) Others from Optimalization of overlapped customers, Competitive-based Operating Income (in USD Mio) pricing alignment , Joint Marketing in Dumai, Takeover of Pertagas' gas In long run, the growth of the 120 allocation from 3rd parties, and Cost Savings (i.e.consulting, legal, IT, newly established Sub Holging Gas land rental, O&M, Trainings etc) is depending on Captive Markets from O&G Holding (MT/LT) 10-20 15% • Capturing potential deals inside 100 R ~$60M (45%) of Pertamina Groups (at least Mainly from Revamping of Oil pipeline with BOT scheme USD 20 Mio) Others from O&M contract in PHE Mahakam, PEP new Supply, Cost Savings • Business Expansion with full 80 R Business Expansion in Sub Holding Gas (MT/LT) 50-60 45% support from Pertamina as Mainly from Develop household gas pipeline with PPP scheme O&G Holding (at least USD 60 Mio) 60 Others from Streamlining CNG processing and transportation, LNG retails ~$20M (15%) Both segments contributes 60% TOTAL GENERATED SYNERGY VALUES 100-130 for added value 40 Short-term plan is to align Pertagas Infratrcuture & Business 20 ~$53M (40%) into PGAS to optimize the outcomes of up to USD 53 Mio p.a. or 40% of the total Synergy 0 2018 2019 2020 2021 2022 Business Expansion in Sub Holding Gas (MT/LT) Captive Market in O&G Holding (MT/LT) Business Alignment & Optimization with Pertagas (ST/MT) 20
Investor Relations Contact: PT Perusahaan Gas Negara Tbk Mid Tower Manhattan 26th Floor Jl. TB Simatupang Kav. 1-S, Jakarta, Indonesia Email: investor.relations@pgn.co.id Phone: +62 21 8064 1111
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