PGN S S BUSINESS PRESENTATION 2005 RESULTS

Transcription

1 PGN S S BUSINESS PRESENTATION 2005 RESULTS Remarks By: Widyatmiko Bapang Corporate Secretary Mangatas Panjaitan Head of Accounting & Budget Division Jakarta April 6, 2006

2 Agenda I. PGN s Core Businesses a. Existing Transmission & Distribution Pipe Line b. Transmission Networks Expansion c. Distribution tion Networks Expansion II. Operational and Financial Results III. Ensuring Security of Supply IV. Going Outside The Pipelines

3 I. PGN s Core Businesses

4 Existing Core Business Distribution 2% Gas Retail customers Transmission Gas Purchase and Sales Agreements Upstream supplier 100% Gas PGN 98% Gas Industrial customers Upstream supplier Gas PGN Gas Large offtakers (Power, Petchem) GSPA GSA GTA Supply Side Gas Sales & Purchase Agreement (GSPA) - - Long-term, Fix price in US$ - Take-or-pay volumes End User Gas Sale Agreements (GSA) - Short-term, Price in US$ - Take-or-pay volumes Transport Third Party s Gas PGN does not own the gas Long-term Gas Transmission Contract (GTA) - Minimum ship-or-pay volumes - Tariffs in US$ 1

5 PGN s Upcoming Transformative Integration Current New Model Post 2006 Result Structure Upstream Gas Transportation PGN Distribution PGN Transmission 8 Cities Grissik - Duri Grissik - Sing Industry and Small Customers Caltex S pore IPPs No connection between transmission and distribution Lacking synergies Projects offer only stand-alone alone value and returns Upstream Gas Transportation PGN Distribution PGN Transmission 12 Cities Duri - Medan SSWJ Phase I& II Grissik - Duri Grissik - Sing Industry and Small Customers IPPs Caltex S pore Over 60% of distribution volumes to be provided by 3 new PGN transmission projects Strong commercial and IRR synergies Emphasizes increasing volumes to underutilized, higher return distribution 1a

6 Pricing Dynamics Promote Gas Demand Growth Fuel oil price by average has increased 126% in October 2005, hence, has created a stimulus to utilize more natural gas High international oil prices (above US$60/bbl) increased the burden on the Government to keep the subsidy in place US$/MMBTU PGN Gas Tariffs vs. Oil Price Government emphasize on increasing gas usage:» Reduce oil subsidy» Increase revenue from oil export» Environmental benefits (Blue Sky Policy) Jan-02 Jul-02 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Crude Oil International MOPS + 15% HSD Subsidised Price HSD Unsubsidised Price PGN Average Sales Price Natural gas price has become more competitive and stable than fuel oil 2

7 a. Existing Transmission and Distribution Pipeline

8 Existing Distribution Networks MEDAN MEDAN SBU SBU III III BATAM BATAM SBU SBU III III PEKANBARU PEKANBARU SBU SBU III III PALEMBANG PALEMBANG SBU SBU I I 1 1 JAKARTA JAKARTA + + BOGOR BOGOR SBU SBU I I CIREBON CIREBON SBU SBU I I 8 8 SURABAYA SURABAYA & & Surrounding Surrounding Areas Areas SBU SBU II II

9 Existing & Planned Transmission Networks DURIMEDAN (Preparation) DURIMEDAN (Preparation) SSWJ SSWJ PHASE PHASE II II (Under (Under Construction) Construction) EAST EAST KALIMANTAN KALIMANTAN CENTRAL CENTRAL JAVA JAVA (License (License Tendered Tendered by by Government) Government) Medan Dumai Singapura Duri Sumatera Grissik Pagardewa Kalimantan Sulawesi Irian Jaya (Papua) GRISSIK GRISSIK DURI DURI (Operational) (Operational) Jakarta Semarang Surabaya GRISSIK SINGAPORE (Operational) GRISSIK SINGAPORE (Operational) Java SSWJ SSWJ PHASE PHASE I I (Under (Under Construction) Construction)

10 b. Transmission Networks Expansion

11 PGAS Role in Fueling Domestic Growth (South Sumatra-to to-west Java Transmission Pipelines) 5

12 PGAS Role in Fueling Domestic Growth (Duri Dumai Medan Transmission Pipelines) 6

13 c. Distribution Networks Expansion

14 PGN s Role in Fuelling the Dometic Growth (West Java Distribution Network Expansion Update) 7

15 Capital Expenditure Outlook Update Capex Forecast for Licensed Projects (US$mn) SSWJ Phase I SSWJ Phase II West Java Distribution Duri-Dumai-Medan Capex US$492 mio Capex US$619 mio Capex US$216 mio Capex US$538 mio Note: : estimated capex in 2006 Incrementally growing capex program to support integration and medium-term growth 8

16 II.. Financial and Operational Results

17 Consistent Operational Growth (2005) Distribution Volume (In mmscf/d) 7% Throughput Growth (In mmscf/d) Transmission Volume 27% Throughput Growth Throughput Volume Distribution Volume Growth YOY 2004 to % growth Commercial operations of Batam & Pekanbaru Distribution Network in Feb 2005 First gas in to Riau Andalan Pulp & Paper (RAPP) in March 2005 Additional gas from Ellips Jatirarangon (Okt 2004) Transmission Volume Growth Grissik-Duri: mmscfd (2004) vs mmscfd (2005) (increased by 11%) Grissik-Singapura mmscfd (2004) vs mmscfd (2005) (increased by 92%) Higher throughput volume of Grissik Singapura has became the main driver for the growth of the transmission business 9

18 Strong 2005 Earnings (In Billion IDR) Forex Gain / Loss Gain Rp 52 bio % Loss Rp 242 bio Loss Rp 90 bio % 40% 14% 56% 56% 82% 82% Revenues EBITDA Operating Expense Operating Income Net Income

19 Balance Sheet Items 2004/ % CHANGE Balance Sheet Structure: Cash and Cash Equivalents*) 3,787 3,992 5% Fixed Assets 6,068 7,109 17% Others Assets 1,185 1,473 24% Total Assets 11,040 12,575 14% Debt 6,175 6,384 3% Other Liabilities 997 1,171 17% Minority Interest % Equity (Including Gov. Project Fund) 3,305 4,326 31% Total Equity and Liabilities 11,040 12,575 14% *) Cash and Cash Equivalents Include short term investment Exhange rate December 31, 2005 Rp per 1 USD, December 31, 2004 Rp

20 Financial Snapshot (Expressed in Billion Rupiah Except otherwise stated) Profit and Loss Summary % CHANGE Revenue 4,457,870 5,433,740 22% EBITDA 1,554,964 2,174,548 40% EBIT 997,833 1,552,281 56% Net Profit 474, ,013 82% EPS % Balance Sheet Summary Total Debt 6,174,967 6,384,093 3% Cash and cash equivalent 3,786,998 3,992,385 5% Minority Interest 562, ,154 23% Net Debt 2,387,969 2,391,708 0% Book Value (BV) 3,305,043 4,325,733 31% Share Price 1,900 6, % No of Share Issued (mn) 4,379 4,486 2% Dividend Yield 2.9% 1.4% -51% Market Capitalization 8,320,620 30,953, % Enterprise Value 10,708,589 33,344, % Ratios Debt Ratio 65% 60% Debt/ Equity (X) Debt/ EBITDA

21 PGAS Performance I. PGAS Share Ownership Composition per March 20, 2006; - GOI: 59,79% (including DPP I convertion reaching 56,943,305 shares) - Public : 40,21% (including MSOP I & II convertion reaching 125,487,500 shares) II. Market Capitalization per March 20, 2006 was IDR 45 trillion & the third biggest market cap in Jakarta Stock Exchange EPS in 2004 & Q1 1H Q3 FY Performance of PGAS vs IHSG PGAS vs JCI MOVEMENT December 15, March 20, ,000 10,000 9,000 PGAS Closed per 20/03/06 Rp. 9,750,- JCI Closed per 20/03/06 1, ,900 1,700 PGAS 8,000 7,000 6,000 5,000 1,500 1,300 1,100 JCI 4,000 3,000 2, , /12/ /04/ /08/ /11/ /03/ /07/ /10/ /02/ /03/2006 PGAS JCI 13

22 III.. Ensuring Security of Supply

23 Transmission Growth Profile 2,000 1,800 1,600 1,400 1,200 1,000 (mmscfd) Transmission Volume ~25% CAGR Duri - Medan S Sumatra - West Java P II S Sumatra - West Java P I ~20% CAGR Grissik Singapore Grissik Duri Key Drivers Grissik - Singapore S Sumatra - W Java Duri - Medan East - West Java Transmission growth through 2009 is from approved projects currently under engineering and development 14

24 Total Estimated Distribution Volumes Distribution Volumes () Source E 2007E 2008E 2009E 2010E T O T A L SBU REG I Total Average Weighted Purchased Price (US$/MMBTU) T O T A L SBU REG II Total Average Weighted Purchased Price (US$/MMBTU) T O T A L SBU REG III Total Average Weighted Purchased Price (US$/MMBTU) T O T A L PGN Total Average Weighted Purchased Price (US$/MMBTU)

25 Distribution Growth Outlook Volume Pasokan Gas Terkontrak (1) 1,800 (mmscfd) 1,600 1,400 1,200 1, ~25% CAGR ~38% CAGR Gas under negotiation for MOU Gas under MOU Gas under GPA Key Drivers Incremental Supply to West Java Market (1) 2003 and 2004 based on actual South Sumatra gas to West Java Market Additional Volumes Required PGN continues to progress in securing significant gas supply growth 16

26 IV. Going Outside The Pipelines

27 Coal Bed Methane (CBM) Coal Coal Bed Bed Methane Methane contains contains gas gas methane methane (CH4) (CH4) trapped trapped in in layers layers of of coal coal Indonesia Indonesia has has mammoth mammoth reserve reserve of of CBM CBM especially especially in in the the following following regions: regions: East East Kalimantan Kalimantan Reserves Reserves approximately approximately TCF South South Sumatra Sumatra Reserves Reserves approximately approximately TCF. With With the the latest latest technology technology approximately approximately 10% 10% --20% 20% coal coal can can be be extracted extracted as as CBM CBM The The amount amount of of CBM CBM that that be be produced produced from from the the Kalimantan Kalimantan and and South SouthSumatra Sumatra basins basins reaches reaches TCF TCF with with high high CH4 CH4 composition composition of of 94%-97%. 94%-97%. CBM CBM is is an an alternative alternative gas gas source source that that can can be be carried carried from from East East Kalimantan Kalimantan and and South South Sumatra Sumatra to to Western Western part part of of Java. Java. High High CH4 CH4 has has made made CBM CBM as asthe the best best alternative alternative energy energy that that is is environmental environmental friendly friendly PGN PGN plans plans to to develop develop CBM CBM both both in in East East Kalimantan Kalimantan and and South South Sumatra Sumatra collaborating collaborating with with the the local local regencies regencies and and mining mining operators operators 17

28 CNG & LNG Transportation Modes CNG on Barge Transportation CNG and Mini LNG technologies is utilized to penetrate market that has lower gas demand CNG on Barge utilized cylinder that is developed from carbon fiber composite reinforcement (CFCR) Mini LNG utilizes conventional LNG technology that has been modified for small scale transportation Potential gas sources include Donggi, Matindok, Bontang & Makapan Potential markets include Makassar, Bali, East Java & Ambon Estimated economical capacity: mmscfd Mini LNG Marine Transportation CNG Inland Transportation CNG Inland Transportation utilizes truck or train to transport gas in CNG form from city to another. CNG Inland is utilized to transport gas to refueling natural gas stations located in Java 18

29 Mother Daughter System of Inland CNG Transportation PGN s s Pipelines Gas Distribution Pipeline supplies gas to main refueling station ( Mother station) Aluminium Alloy Mother Station Carbon Fibre Composite CNG Modules Light weight Bullet proof Fire proof Two times smaller than the LPG cylinder Franchise w/ local SOEs or gov t financings Compressor CNG Modules CNG Trucks or Rail Road Gas is compressed in Mother station to become CNG CNG is stored in specially designed tube and transported to refueling stations located far from gas distribution pipelines ( daughter stations) transported utilizing special truck or train CNG from truck / train is distributed to Daughter station Franchise w/ private / local SOEs Remote Residential & Commercial Area Substitute LPG and Kerosene Daughter Daughter Daughter Station Station Station CNG is distributed to Daughter Station to supply gas to consumers Remote Industrial Compound & IPP Power Plant Substitute HSD, LPG Kerosene 19

30 Gas to Hydrate (GTH) Transportation Mode GTH technology is developed for storage and natural gas transportation, especially for stranded gas from marginal gas fields in Indonesia Stranded gas is gas reserves geographically located far from the transmission pipelines or the volume is excessively low to be transported with pipelines or LNG technology The conversion from gas to hydrate results in volume compression of 150 to 180 times which is viable to be transported Feasibility study shows that GTH technolgy for longdistance transportation is 25 percent cheaper than LNG technology Gas hydrate is a mixture of gas and water that is trapped inside the molecule of water 20

31 Thank You