PT Adaro Energy Tbk : Adaro Energy’s 1H14 Financial Press Release

First half performance remains on track to achieve annual guidance  

• Adaro Energy's revenue increased 7% to US$1,693 million on the back of higher sales volume of 13% while our average selling price (ASP) declined 5%. Our cost of revenue stayed fairly flat at 1% to US$1,260 million leading to a 31% increase in EBITDA to US$513 million.
• Our 1H14 Operational EBITDA, which excluded non-operational accounting items, increased 31% to US$513 million. Operational EBITDA excludes a one-time gain from sale of 35% interest in PT Servo Meda Sejahtera (SMS) and expense related to a prior tax assessment for fiscal year 2012.
• Our net income for 1H14 was down by 31% to US$172 million mainly due to the inclusion of a gain from the Balangan acquisition in 1H13. Our core earnings, which exclude non-operational accounting items, rose by 59% to US$210 million.
• We lowered our coal cash cost (excluding royalty) 13% to US$31.74 per tonne in 1H14, mostly due to the lower strip ratio as well as lower freight and handling, lower fuel cost, and other cost reduction initiatives, while overburden volumes increased 5%.

Demand remained healthy with solid free cash flow generation

• We increased production volume 12% in 1H14 to 27.8 Mt and sales volume by 13% to 28.2 Mt due to solid demand for our coal.
• Our net capital expenditure during 1H14 decreased by 31% to US$67 million. We are on track to achieve our capital expenditure guidance of US$200 million to US$250 million.
• We generated positive free cash flow of US$259 million.

Strong capital structure with robust liquidity

• Our liquidity remained strong with access to cash and long term undrawn facilities totaling US$1 billion providing us with flexibility during the current coal price downturn.
• Our capital structure improved as we reduced total interest bearing debt by 4% and increased our cash position 68% to $938 million, resulting in net debt to last 12 months EBITDA of 1.39x and net debt to equity of 0.40x as of the end of 1H14.
• We have completed a new unsecured Amortizing Term Loan Facility of US$1 billion. Combined with the internal cash balance, we plan to use the proceeds to redeem the US$800 million Guaranteed Senior Notes issued in October 2009 and to refinance the US$750 million loan facility signed in July 2011.
• We will continue to preserve cash, strengthen our capital structure and extend the maturities of our borrowings.

Download 1H14 English Financial Press Release here

Download 1H14 Bahasa Financial Press Release here

Download 1H14 Financial Statements and Notes here

Please do not hesitate to email us or visit our homepage at www.adaro.com should you have questions or require additional information.

Yours faithfully

Cameron Tough

Head of Investor Relations & Corporate Secretary Division

PT Adaro Energy, Tbk.