PRODUCTION CASH COST / TON COAL MINED

Production Cash Cost has sharply reduced to $27.0/ton Coal Mined in FY’16 (compared with $34.6/ton in 2014 and $30.2/ton in 2015) – or by $7.6/ton Coal Mined since Dec’14 – a significant reduction – due to

1. Fuel and spare procurement efficiencies
2. Lower mining operating costs
3. Higher production rate at an Arutmin mine

OUTLOOK FULL YEAR 2017

Outlook for coal price in 2017 is optimistic and benchmark Coal Price presently is around $80/ton.
 
The Company expects to exceed production between 5% - 7% and its Average Selling Price at least 30% above FY’16 levels.
 
 
60% of Sales Volume is already committed and this is expected to rise to 75% at end of Q1’17 with finalization of annual contracts with Japan.

ESTIMATED NET INCOME – FY’16
 
The Company is in process of audit of its Full Year 2016 Financials and expects to publish them next month.
 
In response to requests from stakeholders it indicates that its present best estimate of net income for FY’16 is $101.6 million (compared with a net loss > $2 billion in FY’15)
 
PROSPECTS BRIGHT – 2017
 
FY’17 Net Income prospects are bright.

• Sales are expected to be 5% - 7% higher than FY’16
• Coal Price higher by at least 30% vs FY’16
• Increasing efficiencies and economies of scale

 
Apart from Coal subsidiaries, Bumi also expects equity contributions from its other investments such as Darma Henwa where the Company holds a 31% stake, Pendopo and possibly BRMS.
 
FINANCIALS FULL YEAR 2016 – UNDERGOING FULL AUDIT
 
The Company emphasizes that Jan – Dec 2016 Financials are undergoing full audit and hence, the figures above (including net income) are estimates and still subject to final audit.
 
CORPORATE DEVELOPMENTS
 
The Company debt composition plan was approved by lenders in their near unanimous vote on 9 Nov’16. This was ratified by the Indonesian Court on 28 Nov’16.
 

• This means a reduction of debt by 62% from $4.2 billion to $1.6 billion – through an equity exchange for $2.0 billion debt and $639 million of 7 years Mandatory Convertible Bonds at Rp 926.16/share also is the reference price for MCB’s. The MCB’s have limited Convertibility over the 7 years tenor based on a formula.
• The Company conducted its Annual Public Expose on 8 Dec’16 in Jakarta and presented its H1’16 financials, the approved debt composition plan and prospects for FY’17.
• Bumi also conducted its AGM’15 and EGM on 7 Feb’17. Quorum was exceeded and all resolutions were near unanimously approved at the well attended meeting. 99.96% shareholders present accorded approval to the new Equity and MCB issue amounting to $2.6 billion in exchange for debt.
• The Company is finalizing its Full Year Financial Audit for FY’16 and hopes to release these next month. Thereafter, obtain required regulatory approval to the new equity & MCB prospectus, target to issue new equity and MCB by end H1’17.

The benefits accruing to the Company from a successful debt restructuring closure have already been enumerated in our previous announcement on 7 Oct’16 and given below for recall :

1. Deleverage significantly and sharply reduce interest charges
2. Regain financial health, move towards profit
3. Strengthen the Capital Structure
4. Strengthen management further contributing to improved perception of governance
5. Continue raising operational excellence through high volumes, lower costs and efficiencies poised to take advantage of present buoyant sector and market conditions.
6. Increase value for stakeholders

 

For further information, please contact:   Dileep Srivastava   Director & Corporate Secretary PT Bumi Resources Tbk.

Tel (62-21) 5794 2080 Fax (62-21) 5794 2070 email dileep@bumiresources.com www.bumiresources.com