PTBA Records Excellent Performance on 2017

Jakarta, March 12, 2018 – PT Bukit Asam Tbk announced its Financial Performance in FY 2017. PTBA successfully closed its 2017 with Excellent Performance. Operating profit was growth significantly by 233% (Rp 5,89 trillion) compared to profit level of 2,53 trillion in FY 2016. PTBA also booked net profit of Rp 4,47 trillion increased significantly by 223% compared to net profit in FY 2016 at Rp 2 trillion.

This achievement is supported by company’s management to formulate effective strategies remains with higher production, price optimization of coal sales, and cost efficiency.

In 2017, PTBA records revenue of Rp 19.47 trillion, up to 38% increase from revenue in FY 2016 amounted to Rp 14.05 trillion. This revenue growth is the result of continuos efforts by management to increase through market expansion for Low to Medium Coal Calories.

In FY 2017, PTBA’s coal sales reached 23,63 million tons, which growth by 14% compared to sales level of 20,75 million tons in FY 2016. The sales composition is still dominated by domestic sales of 61% and export sales of 39%.

Significant increased of sales volume in FY 2017 recorded in domestic sales of Rp 2.13 million tons or 17% compared to FY 2016 and export sales also increased by 9% . Bukit Asam-50 became the main brand market for domestic and export markets, which brand sales increased by 1.82 million tons for the domestic market and increased 2.44 million tons for the export market.

The average selling price of FY 2017 is 24% from Rp 658.018/ton in 2016 to Rp 814.216/ton in 2017. Increasing of sales price in line with the strengthening of Newcastle Coal Price Index and Indonesia Coal Price (Indonesia Coal Index/ICI) which increased by 34% compared to average price of FY2016 amount 32%.

Cost of good sold increased by14% y-o-y due to 24% or 4.62 million ton y-o-y increase in production volume. Nevertheless, PTBA continues to make cost-efficiency efforts throughout FY 2017 include the cost of mining services which decreased by Rp 785.68 billion or 26% and coal purchases decreased by Rp 455.77 billion or 70% in FY 2016, result from more efficient cost structure. The decline in cost mining services is reflected in a decreases in stripping ratio (SR) from 4.92 tp 3.55, as result in cash cost (UPTE & royalty included) dropping from Rp 655.164/ ton in FY2016 to Rp 641.524/ton in FY2017.

In 2018, PTBA plans to produce 25.54 million tons of coal, up to 17% from previous year’s amount 21.92 million tons. PT Kereta Api Indonesia expressed its commitment to distribute PTBA coal from the mine site amount 23.10 million tons, with each portion of 19.40 million tons to Tarahan Port in Bandar Lampung and 3.70 million tons to Kertapati Port in Palembang. The transportation increased 13% from 2017 targets at 20.50 million tons.

In FY2018, PTBA targets to increase sales to 25.88 million tons with composition of 53% (13.74 million tons) for domestic market and 47% (12.15 million tons) for export market. The domestic sales target slightly decreased by 5%, while export sales increased significantly by 62% from FY2017. So all of sales target in FY2018 increased by 3.91 million tons or 18% compared to FY2017 targets only 21.97 million tons.

The target increase is sustained by export sales plan for medium to high calorie coal to premium market in line with the increasing of coal price. Coal demands also shows positive growth especially in Asean region will be operated some new power plant.

Optimizing Efficiency and Investment

PTBA continues to make efficiency and prioritize investments into activities that support mining operations. Among others, PTBA acquired PT Satria Bahana Sarana (SBS) mining services company PT Bukit Multi Investama (BMI) on January 21, 2015. PT SBS has been operated since 2015 with an increasing production capability. The 2017 production target is 36 Million BCM which increases to 38 Million BCM by 2018. The Synergy of subsidiaries with PTBA not only to reduce dependence on third parties and ensure the operation of the main business activities, but also proven to reduce FY2017 mining service cost to Rp 785.68 billion or decrease 26% compared to FY2016. In FY2017, PTBA also prioritizes the cost efficiency of coal purchasing as part of efforts to develop subsidiaries as well as production optimization. This effort can reduce the cost of purchasing FY2017 coal amount to Rp455, 77 Billion or decrease at 70% of FY2016. In 2018, PTBA allocated Rp 6.55 trillion consist of Rp 1.43 trillion for routine investment and Rp 5.12 trillion for development investment.

PROJECT DEVELOPMENT South Sumatera – 8 Steam Power Plant (PLTU) PLTU Sumsel 8 (Banko Tengah 2x600 MW) project located in Muara Enim South Sumatra will be built by PTBA with China Huadian. In March 2015, PTBA through its subsidiary PT Huadian Bukit Asam Power (HBAP) has signed a USD 1.2 billion Loan Agreement with The Export-Import Bank Of China (CEXIM).

The progress after the signing of Power Purchase Agreement (PPA) amendment with PLN on 19 October 2017 regarded the change of construction of High Voltage Direct Current (HVDC) transmission line into Extra High Voltage transmission line 45 km from New Aurduri, Jambi to Muara Enim, South Sumatera and PLN has appointed PT Waskita Karya as its executor. Construction is planned to begin in 2018 with Supercritical Boiler technology that is more efficient and environmental friendly. Next will be amendments to Engineering Procurement Construction (EPC) contracts, Operations and Maintenance (O & M) and Coal Supply Agreement (CSA) contracts.

Peranap Mine Mouth Power Plant PTBA will build a 2x300 MW steam power plant in Indragiri Hulu-Riau which utilizes more than 4 million tonnes of coal per year from PTBA mine in Peranap. PLTU uses proven technology that will be able to generate electricity at competitive prices according to Government rules and its targeted to start operating in 2023.

South Sumatera – 6 Mine Mouth Power Plant PTBA in cooperation with PLN will build a 2x300 MW power plant in Tanjung Enim that utilizes more than 3 million tonnes of coal annually from the PTBA mine in Tanjung Enim. The plan for commercial operation date scheduled in 2022.

East Halmahera Steam Power Plant The 2x40 MW Halmahera Timur power plant project is one of the State Owned Enterprise (SOE’s or BUMN) synergy projects, in this case PTBA as an energy company will provide electricity supply for ANTAM's new Ferronickel plant located in East Halmahera Regency, North Maluku.

Kuala Tanjung Steam Power Plant Another SOE’s synergy project is the 2x350MW Tanjung Tanjung power plant which is a strategic project of PTBA with INALUM to provide electricity supply for INALUM Aluminum Smelter II expansion factory located in Sei Mangkei Industrial area. This power plant is targeted to start operating in 2021.

Coal Gasification Project In addition to the synergy of SOEs, for the development of power plant, PTBA also synergize with Pertamina, Pupuk Indonesia and Chandra Asri Petrochemical through the development of gasification technology to convert coal into syngas. Syngas is a raw material that is processed into Dimethyl Ether (DME) as fuel, urea as fertilizer, and Polypropylene as plastic raw material. Its coal requirement is estimated to be more than 5 million tons per year and is planned to start operating in 2022.

CBM Project (Coal Bed Methane) The CBM project is located within Tanjung Enim coal mining area, South Sumatra. The project will produce 25 MMSCF (Million Standard Cubic Feet per Day) capacity or equivalent to generate 100 MW of electricity with a potential reserve of 0.8 TCF (Trillion Cubic Feet).

Coal Transport Project Coal transport optimization, PTBA in cooperation with PT KAI developed a new railway coal transport project consisting of: • Tanjung Enim - Simpang – Perajin with a capacity of 10 million tons / year along with Perajin’s new port which plan to operate in 2022. • Tanjung Enim - Srengsem with a capacity of 20 million tons / year and plans to operate in 2022 • Tanjung Enim to Lampung (Bukitasam Transpacific Railways - BATR), which plans to operate in 2022 with a capacity of 1st year (7.5 million tons), 2nd year (15 million tons), 3rd year to 14th ( 25 million tons), the 15th year (27.5 million tons), the 16th to 20th (30 million tons)

Further cooperation is also done in order to increase the capacity of existing railway lines (existing) include: • Double track south path from Tiga Gajah - Baturaja - Martapura along 34.33 km • Double track north of Prabu - Lembak - Payakabung - Kertapati as 42.67 km along with the development of the Kramasan Port with a capacity of 5 million tons / year.