INVESTOR PRESENTATION 3M-2018 Update P T P e r u s a h a a n G a s N e g a r a Tbk
DISCLAIMER 2 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 PT Perusahaan Gas Negara Tbk (IDX:PGAS) is an Indonesia-based, public-listed company engaging in the transmission and distribution of natural gas primarily in Indonesia. Previously established as a State-Owned Company (SOE), PGAS has been officially merged with PT Pertamina (Persero) to become its subsidiary since 11 April 2018 as part of Government of Indonesia s holding initiatives. HEADQUARTER Jl. K.H. Zainul Arifin No. 20 Jakarta, Indonesia Website: Investor Relations Contact: PT Perusahaan Gas Negara Tbk Mid Tower Manhattan 26 th Floor Jl. TB Simatupang Kav. 1-S, Jakarta, Indonesia Email: investor.relations@pgn.co.id Phone: +62 21 8064 1111
G r o u p S t r u c t u r e Company Introduction 100% THE REPUBLIC OF INDONESIA 1 SERIE A 3 VISION M I S S I O N PUBLIC Type Index Public IDX:PGAS Founded 13 May 1965 Headquarter CEO Industry Subsidiaries 8 Jakarta Jobi Triananda Hasjim Gas Transmission and Distribution Total Assets USD 6.3 Billion (2017) No. Employees 1,339 (2017) Notes: 395 Subs Secondees Website To Become the World-Class Energy Company in Gas Business in 2020 To increase the Company s added values for stakeholders through: Customers Energy needs fulfillment solution that is safe, valueadded, economic, and increase the competitiveness; Society The improvement of welfare and sustainable economic growth through energy independence and environmental conservation efforts; Shareholders/Investors The creation of the optimal and sustainable Company s values through internal and external synergies. PT Saka Energi Indonesia 99.99% PT Transportasi Gas Indonesia Saka Indonesia Pangkah Ltd Saka Energi Wokam Saka Energi Sanga Sanga Ltd Saka Energi Bangkanai Barat Saka Energi Fasken LLC 59.87% 56.96% PT PGN LNG Indonesia PT Gagas Energi Indonesia 99.88% Saka Energi Sumatera Saka Energi Muriah Ltd Saka Ketapang Perdana 99.99% Widar PT Nusantara Regas 40% PT PGAS Telekomunikasi Nusantara Saka Indonesia Sesulu Saka Bangkanai Klemantan 99.93% 43.04% Telemedia Dinamika Sarana PGAS International PT Permata Graha Nusantara 99.98% Saka Energi Muara Bakau PT PGAS Solution 99.91% KJG Perkasa Sena
Business Coverage and Infrastructures 4 Distribution Business Transmission Business Buying and selling gas to customers by virtue of pipeline infrastructure in three main areas in West Java, East Java and North Sumatera. Transporting gas of customers; suppliers or off-takers through pipeline. The pipeline can also be function as the backbone to distribution pipeline. 1 2 Tarakan Sorong Downstream Business Operating in 3 Major Coverage Area, 39 cities and regencies (12 provinces) in Indonesia Transporting and Distributing Gas ±1,565 MMSCFD 3 4 Gas Infrastructure Upstream Business Developing ±7,453 km length pipeline network, 2 unit FSRU, 12 Gas Fueling Station, 4 MRU Total assets 11 blocks (8 blocks in operation, 3 blocks in exploration) Oil and gas lifting ±36,696 BOEPD 1 2 Pipeline Network: Distribution 5.169 km Transmission 2.284 km Transmission Pipeline Grissik Duri Transmission Pipeline Grissik Batam Singapore Non-Pipe Gas Infrastructure Upstream Business Investing participating interest in PSC and operating oil and gas blocks to support Indonesia production and lifting and to hedge downstream business Other Supporting Business Taking business opportunities along the natural gas value chain; LNG, CNG, related gas business services, fiber optic for telecommunication, management of asset & facilities 3 4 Transmission Pipeline SSWJ Transmission Pipeline Kalija Distribution Area Distribution West Java, DKI Jakarta, Lampung, South Sumatra and Banten Distribution East Java and Central Java, North Kalimantan and Papua Distribution North Sumatra, Riau and Kepulauan Riau - 2 FSRU (Lampung dan Jawa Barat) - 4 MRU (DKI, Gresik, Bandung) - 1 Cluster CNG (Jateng) - 12 Gas Fueling Station (DKI, Bogor, Sukabumi, Purwakarta, Surabaya, Batam, Lampung)
Million USD Million USD 5 3M-2018 Highlights D O W N S T R E A M Distribution Volume 836 MMSCFD (YoY up 2.5%) Sales Price ~USD 8.41/MMBTU (YoY down 2%) Cost of Gas ~USD 6.07/MMBTU (YoY up 1%) (incl. LNG) U P S T R E A M Overall net lifting ±36,696 BOEPD (YoY flat) Oil 7,053 BOEPD Gas 127 MMSCFD LNG 45 BBTUD LPG 91 MTPD 1,000-746 798 525 Consolidated Statement of Comprehensive Income 589 221 209 156 144 97 Revenues Cost of Revenues Gross Profit Operating Income 80 Net Income Consolidated Statements of Financial Position 3M 2017 3M 2018 254 EBITDA 249 Transmission Volume 728 MMSCFD (YoY flat) (Incl. TGI & KJG) INFRASTRUCTURE Pipeline Network 7,453 km 8,000 6,000 4,000 2,000-2,269 2,022 4,717 4,443 Current Assets Non Current Assets 6,986 6,465 Total Assets 847 554 Current Liabilities 2,860 2,649 Non Current Liabilities 3,707 Total Liabilities 3M 2017 3M 2018 3,203 3,262 3,279 Total Equity IMPACT OF MACROECONOMY Revenue Contribution EBITDA Contribution Weakening Rupiah against US Dollar Stronger electricity and industries consumption 79% 17% 4% 69% 31% Tightening Government s Policy Distribution Upstream Others Distribution & Others Upstream
6 Financial Performance Wtd Avg (after tax) Financial Ratios 31 March 2018 31 March 2017 5.5% EBITDA Margin (%) 31.2 34 Fixed Float EBITDA / Interest Expense (x) 8.66 8.73 98% Total Loan 2% Debt (Interest Bearing Debt)/Equity (%) 73.7 86.9 USD 2.42 Billion Cash Flow (In Million USD) 31 March 2018 31 March 2017 Beginning Balance 1.026 1.304 USD 85% JPY 15% Cash flow from operating 207 271 Cash flow from investment (18) (76) Cash flow from financing (9) (68) Foreign Exchange Impact (9) 10 Ending Balance 1.197 1.440 As of 13 April 2018 Credit Rating Rating Outlook Moody s Baa2 Stable Standar & Poor s BBB- Stable Fitch Ratings BBB- Stable Pefindo idaaa Stable
(MMscfd) Contribution - Distribution 7 900 850 800 750 700 650 600 550 500 824 Wood Lifting Oil Cement CNG Textile Others Basic Metal Paper Glass Fabricated Metal Food Ceramic Chemical Power Plant 865 0.03% 0.26% 802 803 0.42% 1.02% 1.78% 3.45% 3.62% 4.57% 5.22% 6.29% 10.19% 10.35% 13.93% 772 Year-on-Year Basis 816 +2% 836 2013 2014 2015 2016 2017 3M-2017 3M-2018 Industrial & Commercial Diversification incl. Power Sector 832 MMScfd Five Biggest Segments 38.87% Distribution volume was 836 MMScfd in Q1 2018 (up 6% QoQ) due to higher consumption from power sector and industries Industries and Power Plants 97% of total sales volume 1,722 Customers Commercial & SME 2% of total sales volume 1,988 Customers Households 1% of total sales volume 199,604 Customers *Number of customers as of 31 March 2018 Price of gas remained competitive than other energy sources Natural Gas - avg PGN LPG - 3 kg (Subsidized) MFO 180 LPG - 50 kg Kerosene IDO/MDF/MDO Gasoline 88 LPG - 12 kg HSD 8.41 9.57 PGN Average Selling Price +14% 15.13 +80% 20.00 20.99 19.53 21.77 21.63 23.31 +137% +158% +149% +157% +132% +177% USD/MMBTU Exchange Rate USD/IDR : 13,756 (as of 29 March 2018)
T r a n s m i s s i o n (MMscfd) Contribution Downstream Transmission 8 900 854 852 850 800 789 795 Year-on-Year Basis Flat 750 700 650 733 726 728 The transmasion volume was relatively flat both YoY and QoQ. The increasing transmission volume from PGN & TGI offset the declining volume from KJG. 600 550 500 2013 2014 2015 2016 2017 3M-2017 3M-2018 Total Length: ±1,077km (incl. SSWJ) Off-taker: PLN, BBG Volume 20 MMScfd Operated by PGN Operated by TGI Total Length: ± 1,000 km Off-taker: CPI, Gas Supply Pvt. Ltd., PGN, PLN Total Volume: 645 MMScfd Gas transported by TGI to offtaker in Singapore and Batam increased 11 MMScfd from 634 to 645 MMScfd. Operated by KJG Total Length: ± 200 km (Kepodang- Tambak Lorok) Off-taker : PLN Volume 64 MMScfd Gas transported from Kepodang field operated by Petronas through Kalimantan Java pipeline decreased 15 MMScfd from 79 to 64 MMScfd due to declining reserve from supplier
Sanga- Sanga Bangkanai Ketapang SES Pangkah Sanga- Sanga Bangkanai Fasken Muriah Ketapang SES Pangkah Sanga-Sanga Pangkah Sanga- Sanga Muara Bakau 9 Contribution Upstream Oil and Gas Lifting Crude Oil & Condensate (MMBBL) Gas (BBTU) LNG (BBTU) 36,947 boepd 36,696 boepd 0.29 4,482 - Flat 0.14 3,271 4,028 3,369 7,458 23,619 21,133-0.09 0.16 0.21 0.29 374 305 586 719 1,307 1,051 3M-2017 3M-2018 Total LNG Lifting 1,819 4,028-1,819 LNG Gas LPG Oil 1,645 1,052 8,314 7,053 3M-2017 3M-2018-0.01 0.19 3M-2017 3M-2018 Total Crude Oil Lifting 0.75 0.63 220 475 1,136 1,017 4,650 4,574 LPG (MT) 818 7,779 11,948 3M-2017 3M-2018 Total Gas Lifting 12,754 11,412 382 In 3M-2018, lifting volume of oil and gas business was relatively flat from corresponding period 2017. The increasing lifting volume of LNG offset the decreasing in oil, gas & LPG lifting volume 3M-2017 3M-2018 Total LPG Lifting 12,766 8,120
Contribution Others 10 3M- 2018 USD 31 Million 40% Finance Lease 10% Fibre Optic 50% Pipeline Construction & Maintenance 3M- 2017 USD 15 Million 89% Finance Lease 10% Fibre Optic 1% Pipeline Construction & Maintenance Finance Lease represents KJG s interest in relation to finance lease under the gas transportation agreement between KJG, PLN and PC Muriah Ltd. under the provision of GTA Kalija 1 Fibre optic represents PGASCOM s revenues of network services to the customers Pipeline construction and maintenance represents PGASSOL s revenues of services to its the customers. PLN s Tambak Lorok Gas Facility O&M Activities SCADA Control Room
Strategy & Market Development 11 Development of market by construction of distribution backbone Delivering gas to RD by developing pipeline or modifying system in station Customer attachment to build acccess until last mile Optimization Designing the plan, development, operational, trading by optimising available asets and human capital PGN GROUP Customer Intimacy Providing customers the gas and related service as reliable energy Sales force as marketing agency Fostering relationship with customers Customer Attachment RD III Potential of 2.08 MMscfd Plan of operation: 2018 Development of Transmission Pipeline WNTS-Pemping 16-5 km; reserved capacity of 40 MMscfd Plan of operation : 2018 Development of Gas Infrastructure in West Java 6-12" : 39 km; Reserved capacity of 14.30 MMscfd Plan of Operation: 2017 Focused & Integrated Integrated gas business based on economic zone develoment Focus on strengthenning the core business Maximizing Value Creation Encouraging subsidiaries to create further business opportunity Priority of investment and development that gives beneficial impact for long term Market Development in Dumai 16 & 24 119 km Potential of 95 MMscfd Plan of Operation : 2018 Customer Attachment RD I Potential of 5.39 MMscfd; Plan of Operation : 2018 Market Development in Gresik, Lamongan and Tuban Phase I : 24" - 11.5 km Potential of 36 MMscfd Plan of Operation: 2018 Market Development in Subang 8-16" - 33 km Potential of 29.64 MMscfd Plan of operation : 2019 Customer Attachment RD II Potential of 1.60 MMscfd; Plan of Operation : 2018
2018 Targets Guidelines for Investors Organic PGAS only & Subject to Change 12 Distribution Volume 775 MMSCFD Zero growth or flat in 2018 Gagas Transmission Volume 665 MMSCFD No change on toll fees PGN KJG T o t a l C A P E X USD 400 Million M a r g i n / S p r e a d USD 2.2 2.5/MMBTU RD 3 RD 2 Downstream 40% Upstream 60% Oil Price USD 48/barrel State Budget (APBN) Guideline RD 1 TGI U p s t r e a m L i f t i n g 35,435 BOEPD Lower due to expiry of Sanga-Sanga & SES Duri Dumai Distribution 56 km length of pipeline Plan of Operation end 2018 Duri Dumai Transmission 67 km length of pipeline JV with Pertagas Plan of operation end 2018
EMR Ministerial Regulation (PERMEN ESDM) No. 58/2017 13 DOWNSTREAM PIPELINE GAS PRICE Households & Small customers price stipulated by Regulatory Body Households & Small Costumers Industry and Electricity Provider Gas for Transportation Gas price for transportation stipulated by Minister Weighted Average of End User Price = Cost of Gas + Infrastructure Management Cost + Trading Cost Implementation Infrastructure Management Cost Infrastructure Management Formula Trading Cost Industry and Electricity provider gas price stipulated by Minister of EMR Prevail for 5 years and open to be evaluated per annum 18 months grace period from date of signatory (27 December 2017) Toll fee stipulated by regulatory body Gas distribution setup by: IRR 11%, 60% utilization/gas allocation and project economics Liquefaction Compression Regasification LNG/CNG storage LNG/CNG transportation = Cost of Service / Volume Cost of Service are: Asset value Operational and maintenance General and administrative Gas Losses Insurance Fee Tax and levy Maximum 7% of cost of gas The maximum percentage should be shared B2B in extended gas supply chain
EMR Ministerial Regulation (PERMEN ESDM) No. 4/2018 14 Transmission Segment Based on: gas source, market and gas infrastructure condition Segment evaluation and appointment stipulated by regulatory body Masterplan of Natural Gas Transmission and Distribution Network Facilities and Supporting Infrastructure for Gas Utilization Minister allow consumer to build and operate an own pipeline gas and facility with consideration of gas source, availability infrastructure and unavailable demand for 5 years The consumer will not be given gas transportation special right Downstream Gas Business Transmission Transporter should acquired business permit including owning pipeline and facility Special right of new transmission segment will be awarded in tender mechanism or minister appointment Distribution and Trading Area The holder of distribution network special right will be given distribution and trading area including gas allocation from tender proposal The special right exclusively for 30 years for new area and 15 years for existing infrastructure owner Area tender mechanism will consider existing infrastructure and consumer Special right holder can cooperate with other to directly selling gas to end user in sub trading area Non Pipeline Trading Trader using CNG and LNG mode should acquire business permit and owning or controlling the asset Asset categorized as LNG receiving terminal, regasification unit, compression and decompression facility, gas filling station or else Non Pipeline Transportation and Storage Permit for transportation and storage including: CNG or LNG transportation, CNG or LNG storage Business licencee have to own or control the facility
O i l & G a s H o l d i n g P l a n Government Regulation Oil & Gas Holding 15 28 November 2017 25 January 2018 August 2018 Target: TBD *Notes: PGN s equity : USD 3.28 Bio (3M-2018) According to POJK IX.E.1 and POJK IX.E.2 Ministry of SOEs Request Letter for PGN s Extraordinary GM No. S-682/MBU/2017 PGN s Extraordinary GM Integration Pertagas into PGN Corporate Actions Shareholder s Actions PGN subs of Pertamina PGN Ministry of SOEs PERTAMINA 1. Government Regulation (PP 6/2018) 2. Decree of MoF (No.286) Changes of Articles of Association Valuation of Pertagas Execution Scheme Changes of Articles of Association If transaction Value >50% of PGN s equity* Shareholders Approval Shareholders Approval (AGM) Shareholders Approval (EGM) O i l & G a s H o l d i n g On-going process Completed Plan 1.28 February 2018 2.28 March 2018 13 April 2018 26 April 2018
Subsidiaries Information 16
Subsidiary Saka Energi Indonesia 17 * 1 3 Type Private Founded 27 June 2011 Headquarter Jakarta 2 4 3 CEO Tumbur Parlindungan Industry Oil & Gas Upstream Subsidiaries 25 Total Assets USD 2.6 Billion (2017) No. Employees 302 (2017) Website www.sakaenergi.com E x p l o r a t i o n P r o d u c t i o n Business Updates * Notes : Not to be scale 1. Pangkah PSC has additional upside for near term production and reserve growth potentials through development and exploration. 2. Muara Bakau block starts producing by first half 2017. Total production in Q1-2018: 660 MMScfd 3. Sanga-sanga PSC and SES PSC due to expire in Q3 2018 4. Force Majeure status of Kepodang Field in Muriah PSC due to unexpected declining amount of reserve and lifetime of production is still under reviewed by SKK Migas. SEI has 20% of PI
18 Subsidiary PGN LNG Indonesia Type Private Founded 26 June 2012 Headquarter Jakarta CEO Mugiono Industry LNG Regasification Subsidiaries - Total Assets USD 415 Million (2017) No. Employees 48 (2017) Website www.pgnlng.co.id
Subsidiary Gagas Energi Indonesia 19 BUSINESS UPDATES 3M-2018 VOLUME 5 MMSCFD Regional I : 10 SPBG & 3 MRU Regional II : 1 SPBG & 1 MRU Regional III : 1 SPBG & 1 Gas Distribution Network 3M-2018 ELECTRICITY BUSINESS : 664,410 KWH Gas Distribution Pekanbaru SPBG Batam SPBG Lampung SPBG Klender SPBG Cilegon SPBG Ancol MRU Monas SPBG PGN Pluit MRU Bandung Type Private SPBG Pondok Ungu SPBG Ngagel Founded 27 June 2011 Headquarter CEO Industry Subsidiaries Jakarta Ahmad Cahyadi Gas Downstream 1 (PT Widar Mandripa Nusantara/WIDAR) Total Assets USD 83 Million (2017) No. Employees 76 (2017) BUSINESS PROFILE GEI provides natural gas for electricity, industry, commercial, household, and transportation sector through gas pipeline, CNG and mini LNG, Gas Refueling Stations (SPBG) and Mobile Refueling Unit (MRU) In 2015, GEI establish PT Widar Mandripa Nusantara (Widar) to engage in the services related to the power plant and trading SPBG Serang SPBG Purwakarta SPBG Sukabumi Gas Distribution MRU Grogol SPBG Grogol Gas Refueling Station (SPBG) MRU MRU Gresik Website www.gagas.co.id
Subsidiary Transportasi Gas Indonesia (TGI) 20 Type Private Founded 1 February 2002 Headquarter CEO Industry Jakarta Zuryati Simbolon Gas Transportation Subsidiaries - Total Assets USD 550 Million (2017) No. Employees 285 (2017) Website Grissik Duri P i p e l i n e Pipeline Length ± 536 km www.tgi.co.id Grissik Singapore P i p e l i n e Pipeline Length ± 470 km BUSINESS UPDATES Transportation volume in 3M-2018: 645 MMscfd Level of infrastructure reliability : 99.96%
Joint Venture Nusantara Regas 21 LNG Volume 3M-2018 211 BBTud Operating FSRU Nusantara Regas Satu located in Jakarta Bay as the first LNG Receiving Terminal in Indonesia Type Private Founded 14 April 2010 Headquarter CEO Industry Subsidiaries - Jakarta Tammy Meidharma Sumarna LNG Regassification Through FSRU Total Assets USD 277 Million (2017) No. Employees 73 (2017) Website www.nusantararegas.com Regasification capacity : 500 MMscfd. LNG Suppliers : Mahakam PSC and Tangguh PSC Offtaker : PLN Muara Karang
Subsidiary PGAS Solution 22 Type Private Founded 6 August 2009 Headquarter CEO Industry Subsidiaries Jakarta Chaedar Engineering 1 (PT Solusi Energi Nusantara/SENA) Total Assets USD 113 Million (2017) No. Employees 325 (2017) Website www.pgn-solution.co.id Line of Business Engineering Trading EPC O&M Establish SENA in 2015 to provide engineering services in the O&G industry, including pipeline, mechanical, electrical, geodetic, civil, process & telemetry sectors. A Reliable Partner of Armatury Group, world biggest valve producer. Building city gas pipeline, onshore - offshore Kalija gas pipeline, SPBG/Gas Refueling Station gas station upgrading. More than 5,200 km in length of gas pipeline in its operation & maintenance (O&M)
Subsidiary PGAS Telecommunication 23 Type Private Founded 10 January 2007 Headquarter Jakarta CEO Sri Budi Mayaningsih Industry Information & Communication Technology Subsidiaries 2 PGAS International Pte, Ltd (PTI) PT Telemedia Dinamika Sarana (TDS) Total Assets USD 35 Million (2017) No. Employees 106 (2017) Website www.pgascom.co.id PTI provides and develop the network fiber optic for international market and based in Singapore Provide solution of different path traffic to Singapore with the landing point at Jurong Island BUSINESS UPDATES Throughout the year of 2017, PGASCOM successfully booked sales capacity of 2,424,905 Mbps and delivered telecommunication services reliability of 99.87%. TDS with the product brand GASNet provides the internet services for corporate customers to fulfill the business needs.
PERMATA IN NUMBERS Facility Management Asset Management Real Estate Subsidiary Permata Graha Nusantara 24 Type Private Founded 24 April 2014 Headquarter CEO Industry Jakarta Baskara Agung Wibawa Property & Facility Management Subsidiaries 2 PT Kalimantan Jawa Gas (KJG) PT Permata Karya Jasa (Perkasa) Total Assets USD 293 Million (2017) No. Employees 80 (2017) Website www.pgnmas.co.id Office & gas station support, warehouse & building maintenance Creating added value on PGN s property assets ±335,558 M 2 Building Management Services ±68,200 M 2 Building Maintenance Services Developing gas based industrial & commercial estates and residential housing ±44 (locations) Gas Station Supports ±25 (locations) Temporary Facilities Services ±110 (users) Office Supports Developed Residential Area for PGN Group Managing ±25 PGN s nonproductive assets ±115 (clients) Office Stationery Services
R e c o g n i t i o n s 2 0 1 7 Silver Award Security Management System Occupational Safety & Health Management System Gold Winner 2017 Stevie Award Best of Asia Pasific World's Best Annual Report 2017 Best organizational Governance CSR Core Subject Performance of ISO 26000 #2 BUMN Non-Listed Annual Report Award 2016 Winner Energy Category Best Sustainability Report 2015 SRA 2016 Best Overall Best Sustainability Report 2015 SRA 2016 25 BUMN Performance Excellence Award 2017 Emerging Industry Leader Lloyd s Register LRQA Certificate Top CSR Awards 2017 2017 Stevie Award The International Business Award BUMN Performance Excellence Award 2017 ISO 14001:2004 OHSAS 18001:2007 2016 Vision Award #1 Worldwide Annual Report Competition