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Why Invest in Adaro?

The Power of Positive Energy


Each time we ship Envirocoal, the cleanest thermal coal available on the export market, on schedule and as ordered to our loyal customers, we deliver positive energy.

In the passionate work of each of our employees, in the way we conduct ourselves, in the impact that we have on those around us and in the contributions we make to society, we deliver positive energy.

As we turn a non-renewable resource into a renewable one by building strong, healthy communities surrounding our operations, as we create maximum sustainable value from Indonesian coal, we deliver positive energy.

Here are seven core reasons to believe in us:

Both of our key commodities, thermal coal and metallurgical coal, are largely consumed by the developing countries in Asia. Southeast Asia and South Asia regions are the pockets of growth for thermal and metallurgical coal demand going forward. Adaro’s presence in Indonesia and Australia provide us with strong geographical advantage to cater to these growing markets.

Our metallurgical coal assets in Indonesia and Australia are both world class assets producing hard coking coal products preferred by customers in the seaborne metallurgical coal market. Adaro Met Coal is one of very few coking coal producers in Indonesia.

Our products portfolio spans from sub-bituminous thermal coal for power generation to premium hard coking coal product, an essential, non-substitutable component in steel making. Our coal assets are strategically located in Indonesia and Australia, key coal producing countries, which provide us with access to major coal importers in the Asia Pacific region.

As any investor in the mining sector knows, at the end of the day, it all comes down to the reserves and resources. Our reserves are one of our main strengths and over the years we have grown our coal resources to 8.1 billion tonnes and coal reserves to 1.4 billion tonnes (not equity adjusted).

Our main coal product, Envirocoal, is internationally trademarked and has been widely used globally, including in Europe and Asia, where environmental restrictions are stringently controlled. Envirocoal is renowned for its ultra-low sulphur, ash and nitrogen content. Envirocoal provides excellent economic and technical benefits to our customers as the low-pollutant content allows our customers to meet their countries’ stringent emission standards and to lower their operating costs. Our coal’s ultra-low ash content reduces ash disposal costs, and ultra-low sulphur helps reduce reliance on high-cost desulphurization equipment.

Our main industry, coal, is volatile and cyclical in nature. It is also highly regulated. One of our key competitive advantage that separates us from our competitors is our diversified business model. The constant change in business environment and competitive landscape push us to not be complacent, to constantly adapt and innovate.

Our business model now encompasses eight business pillars, and we continue to seek growth opportunities in each and every one of them. Our non-coal mining pillars provide us with stable earnings base which supports our profitability and offsets the volatility of coal. In 2019, our non-coal mining pillars accounted for 50% of our operational EBITDA.

Our continuous effort on operational excellence and cost discipline have positioned ourselves as one of the most profitable coal mining companies in Indonesia. We achieved our operational EBITDA target of US$1,000 million to US$1,200 million and recorded operational EBITDA of US$1,207 million with an operational EBITDA margin of 35%.

We maintain a healthy capital structure with a net debt to EBITDA ratio of 0.31x. We also have access to liquidity of US$1,861 million, consisting of US$1,576 million in cash, US$6 million in available-for-sale financial assets, and US$279 million in undrawn, fully committed loan facilities.

We issued a US$750 million, five-year bond in 2019 which extends the maturity of our loan and diversifies our sources of fund. Our strong and healthy capital structure, cash position and liquidity allow us to weather the volatility in the coal market and continue to execute on our business model.

To reward our shareholders for their continuous support for AE, we are committed to distribute dividend every year. Although we have not adopted a specific dividend policy, we have never missed a single dividend payment since we went public in 2008. Since then, we have paid a total of more than US$1,400 million in cash dividend with an average payout ratio of 40%.

We aim to manage our business to balance economic, environmental, social, and governance considerations. We believe that high-quality sustainability programs enable us to attract and retain talents, access sources of capital, optimize risk management and support long-term value creation. Together with our stakeholders we aim to create shared value and champion the principles of mutual respect, partnership and long-term commitment.

We pioneer several environmentally conscious projects such as biodiesel plant, water treatment facilities, ultra-super critical coal-fired power plants, and renewables power plants, and participate in water treatment projects across Indonesia to create value for the Adaro Group, the local communities and the country. Our social performance strategy focuses on active engagement with our communities and other stakeholders to support long term socio-economic development through five key areas with emphasize on education. On the governance front, we continue to uphold good corporate governance principles and comply with the prevailing rules and regulations.

Last modified on June 23, 2020, 12:01 pm | 170859