Pt Bumi Resources Tbk

Ladies and gentlemen, thanks for joining this call today of PT Pumi Resources 9 Months 2025 Earnings Call. My name is Norman Chong. I'll be your operator today. We are very honored to have this call being hosted by Buck Andrew Beckham, Chief Operating Officer of Bumi, and also Buck Christopher Fong, the Chief Corporate Affairs Officer of Bumi. So as usual, we will run through the operational stats of 3Q25, then followed by question and answer session. Buck Andrew, I'll pass the floor to you.

Thank you, Norman. Good evening, good afternoon, good morning to everyone there. Let me go through the slides. Next slide, please. Production for the nine-month 2025 was at 54.9 million tonnes, down slightly. and from 2024 of 57.3 mainly due to the heavy rain especially in the third quarter at kpc prices realized cold prices for nine months decreased 60 to 60 dollars versus 73 in nine months 2024 um in line with the global um coal market Production costs, overall production costs came down to lower unit costs of KPC, and I'll go on to more details in that, driven by the oil price and stripping ratio. Next slide, please. Our guidance remains at this 73, 75 million tons of sales. We're limited by production, which is under the RKAB, so we can't get more coal produced out of KPC, but we will be well set up for the first quarter because of that. Prices are between 59 and 61. It's possible that we beat that if the fourth quarter continues to move up a little, as it's doing at the moment. Cost-wise, we're running around the lower end of our guidance at $42, and we've reduced our strip ratio slightly, and fuel costs, as we've mentioned. Next slide, please. Global markets, international coal prices have been pretty flat down towards the summer and as usual towards the winter and the northern hemisphere you're seeing prices tick up a bit. There's a bit more demand now from October, November in China and prices are just coming up. I think you'll see that continue up until halfway through December and then it will go pretty flat as the Christmas holidays come in. But we see a little bit of improvement in the prices at the moment. Next slide, please. The forward curve is running long-term, still at 120, 122 in calendar 27. GDC Newcombe referring to here. This year is still up at 108, 109. There's a lot of, I think if the markets, global markets continue to perform, you'll see this 113 to 116 in Canada, 26 being a big possibility. Next slide, please. With regards to the operations overall, in our sales for nine months, we're at 54.5. compared to 55.8, a slight drop of 2%. This is because our strip ratio has come down. You can see at KPC we're 8.6 year to date versus 9.2 last year. That's because we have opened up mines, we have improved Now the mines are in a more stable position, so you see that strip ratio being slightly down. It will continue slightly down next year if all goes to plan. Cold mine is below because of the wet weather in the third quarter that we've had, and rain continues at both KPC and Arrugment at the moment. prices-wise, the FOB prices are down 20% at KPC and down 8% at Aruban. Aruban's price has fallen less because it sells more domestic coal and so therefore there's a fixed price there of $70 benchmark which protects it from that increase, or the global market fall, plus the fact that we have a lot more of the 4,200 to 5,000 CV coal, which has maintained its price better than the very high grade coal. Next slide, please. Here you can see the rainfall, KPC at the top has pretty much five, six months. The red is the actual against the long-term averages. And for five, six months, there's been five months that have actually been above the long-term. And over the last August, September, and coming into October, we've been at higher levels, continues at the moment. Rainfall in Taupo, Kalimantan and Aruban has been less than the global trends and has stayed pretty stable all the way through. Next slide, please. As I said, overburden has gone down because of the unfavorable weather, but also because of our strip ratio at KPC. You can see the root min is slightly down from last year. The cold line is slightly down by about 3 or 4%, but that's because of the weather and KPC now restricting its production based on RKAB requirements. Next slide, please. Cold cells, almost the same. Not far off, we've used up the infantry. We have quite a bit of infantry. We will see infantry levels come very low towards the end of the year as we maximise as much sales as possible. And we'll probably, into the third quarter, have a tight stockpile there. A Rootman is slightly up on last year in terms of sales. As I mentioned, stripping ratios are down at both KPC and Arupmin, and that's part of the mine plan, our long-term mine plans that we see. In 2024, the prices for the mines was open, and now we're seeing the benefit come through. Next slide, please. Production costs. We've reduced our costs, as I've said, because of the strip ratio and because of fuel price, oil prices coming down. I'll talk more about that later. Aruba's maintained its costs slightly down on last year. And FOB price, as we all know, has dropped about 18% overall, especially at KPC, has been a big drop. Next slide, please. Average selling prices, as I mentioned, you can see the big drop from the international prices of 82.8 dollars down to 67.4. That's been the major trouble for us. And the fact that the HPV has been following slowly behind doesn't help when we try to do our royalty payments and tax payments are now covering are based on that HPV. If it's higher than the real-life price we got. So it makes it harder for us. In a rising market, we don't have that problem. Average selling prices overall were down from 73.7 to 60.4. Next slide, please. And this is the fuel. You see we're running at about 112, 113 in the last quarter at the moment. We're now using B40 solution, which is biofuels 40%. And that's more expensive than pure diesel. And so, therefore, we're paying probably about 5% to 10 cents a litre more than any other, you know, a normal operation or a normal industry in Indonesia. So it's another priority that we have to take into consideration. And if they go to B50, that will have an effect on our field growth. Next slide, please. Booming reporting. If you look at the revenue, we're up on our revenues because of BRMS improvements. Our gross profit has improved. However, our net profit has come down. The main reasons for that, if we look at the other income and expense, has been the KPC earnings because of the drop in coal price. and a write-off in BRMS, our subsidiary, of one of its assets. And in the income tax and profit sharing, when you compare to 2024, in 2024 there was a deferred tax adjustment, which gave it a benefit of about 60, 70 million dollars, which benefited, so you saw an improvement in the profit last year. However, operational-wise, we're in a very good position, just we need the prices to recover. Assets like Benetida are pretty strong. We're still at a current ratio of one, and also equity is high at $2.8 billion. Next slide, please. This just gives you the consolidated numbers, as we've done before, just to highlight the size of the revenues of 3.5 against 4.2. These are in the back of the financial statements. I think note 42 or 43, if you ever need quarterly numbers. Carry on, please. And this just gives you the comparison between the two, just so you understand. The bottom line is still the same, but it does have an effect on all our numbers. Next slide, please. So overall, when you look at consolidated revenues, are down 17% but we've managed to reduce costs as well thanks to fuel but also thanks to the mining on bringing our strip ratios down. Our gross profit is down overall when you include KPC and our operating income is slightly down by 22%. Operating margins remain pretty not significant change but we hope with coal prices ticking up over the next couple of months, we should see a good fourth quarter. Next slide, please. Boomi Financial, as I said, the equity is slightly down overall year-to-date from December, and the last 12 months consolidated adjusted EBITDA is running at $277 at the moment, slightly down on last, on 2024. because of coal prices. Next slide. And this is just in quarter by quarter, the how that they've built up. And you can see the EBITDA each quarter from this year, like Q1-25, has gradually increased as we're formatting prices slightly rise. If prices continue to rise in Q4, we should see that slightly better as well. Next slide, please. Cash still remains strong at $314 million in total. Below are the breakdown of KPC. Note that we have the CDA restricted funding for payment of contractors at the end of the month, or it gets paid the following month, the one or two days after the year closed. The mine closure deposits you have there of 45 and 59, 100 million, over 100 million is for mine closure. Assuming we get our extensions, we are having to keep these bonds in with the government, even though we have probably another 15 years of live mine life to go. So it's quite frustrating, but that's the rules with the government.

Next slide, please. We're on track, year by year, so up to nine months compared to 2024. We have our CSR program, we spent $3.5 million. We're on track to spend what has been targeted. Our environmental spend overall is on track, and we will end up spending somewhere in the vicinity of $76 million, and that covers reclamation, planting trees, and protecting our environment. Also safety issues. gas emissions, et cetera. What we don't have in this document, which we're doing a lot of work on, we've talked about it previously, is the ESG work we're undertaking now in terms of setting standards and admission targets and reporting on them. Also related to issues such as the weather issues at KPC, we have implemented research in terms of predictive ESG to using our data from all our weather stations to determine better usage of working days and to increase production and also maintenance days. So that's a program that is ongoing. It started the last few months and we will be reporting on results on that as we move forward into the new year. But it is certainly positive in the work we're doing and undertaking on an ESG platform.

Moving on? No, that's about it. But, Norman, that's about it. We won't go into the detail, but KPC details and the Rootman details are attached so that people have the breakdown of the key assets, the core assets. But we're happy to open it up to questions now. Sure.

Thank you. Thank you. Ladies and gentlemen, If you have a question, you can use the raise your hand function. Alternatively, you can also type your question into the Q&A box, and I'll read it out for you. Please limit your questions to a maximum of two each time so everyone has a chance to ask.

I'll let you control it. Okay. Okay.

I think the audience needs some time to warm up. Let me kick it off first. I wanted to check with you what's your view on your 2026 co-production numbers because I understand that a lot of mining companies are in the process to submit RKAP for next year. That's my first question.

Yes, we've all submitted. I think all our pay-a-vis are in, waiting for the government. I think they're having a big review on the total level of coal production they want. I know it used to be about $800-900 million. It came down to $750 million this year. But I understand they are looking at further reductions. To be honest, I don't know what the results of that are going to be. But we're waiting to hear from the government on our IKAV.

I see. The amount that you've submitted is the same as 2025, is it?

Slightly up. It will be slightly up.

Okay.

Okay. Because the Rookman will be probably releasing its production.

Got it. Got it. You said at EGM yesterday, can you like run us through what was the key result from the EGM?

Yeah, I'm happy to do that. The EGM, the basis of the EGM was firstly to address the resignations of the CIC directors. And so it was a formality in having the EGM recognising their resignation. Also, there was a change in one other person. The CFO has moved to a new position outside the group. So those were the two main areas and purpose of having the EGM. And also there was one appointment, which was myself as a director.

Congratulations, Patrice. uh do we have any questions from the floor let's see okay otherwise i'll follow up with my third question but uh from from the news it seems like uh bumiko is quite active in m a recently so we have this uh wolfram acquisition and laman mining right so just just wanted to understand does it does it seems to be uh does it mean that there's a change of uh direction where boomi now is have a more flexible in terms of, you know, doing asset acquisition and how is the, maybe in terms of the financial muscle side of things looks like.

Well, look, it's not secret that this year has been a year of transformation. We announced to the market fairly early this year that we are going through a diversification strategy. I think the market has been fairly surprised in the speed that we've taken this on. And that was the first announcement of the asset in Australia, which is a copper and gold asset, Wolfram Limited. We now have 100% of that asset. It's in northern Queensland in Australia. We visited that site recently, the president, director and myself and a few other directors. It wasn't the first visit from Boomi, but it was certainly the first visit for myself. It's a fantastic asset. It's in care and maintenance, so it's a ground field asset. It will be up and running very quickly. We initially targeted for June next year, although we're keeping to that, but we expect that this will be sped up, and we will announce that when we are ready to. As I said, it's a very good asset. It has a lot of data, it has a lot of resources, and it has processing onsites. So we expect to have some very positive news as we move forward into the new year on that particular asset. Also, on our website, we have announced another asset in Australia called Jubilee Metals, and there will be more information next month on that, but it is also a gold play. So that's the second asset in Australia that we have acquired. so as i said there'll be further news on that in in december uh and also would you just mention bauxite so we've had some agreements on bauxite they're going through a legal process and and as the market well knows that the bauxite industry is is is It's well established in Indonesia. There are some issues over export. So as the market expects, there will be further announcements of what we do with bauxite and when we do it in the near future. So we're certainly moving forward in a transition plan that I think has taken the market by surprise because we talked about it, but we actually are doing it.

Thank you, Bob. Maybe to follow up on this one, right, so these two acquisitions, are they funded by internal cash or debt? And further related to in terms of debt funding, could you remind us what is the current covenant in terms of debt and fundraising?

We've done the ratings. We've raised some of the money through the bond program that we have, the Rupiah bond program that we have. Rates are around 8.5% to 9%, depending on the tenure. Those have been the ones funded. We have no specific covenants other than the normal bond regulations in Indonesia. But we're very confident with gold prices and copper prices where they are, we expect payback within one to two years on these projects.

Okay. Thank you, Pak. We have questions from the box already. The first one is from Benjamin Michael. How big is the bauxite resources of Laman Mining and how big is alumina smelter?

Laban Mining has, I think, job reserves of about 30 million tons, but potentially that could increase with a little bit more. There's a discussion over one area and an agreement. If that agreement is found, that would probably increase it to 50 million tons. And what was the second question? Sorry.

The alumina smelter. How big is the capacity?

That we haven't gone into detail. We can't go into detail at the moment. We'll announce when we get to that point.

Okay, sure. I hope that answers your questions.

What it does say is that Part of our diversification strategy is not just going into minerals away from thermal coal, but also into downstream processing. So, as I mentioned before, we cannot export bauxite, and bauxite can't be exported from Indonesia, so naturally there will be a downstream processing component to that, but we will announce that in due course.

Sure. Second question is coming from Alvin Lam. Is Pak Ashok Mitra still in KPC as CEO? That's his first question.

No, no, he's not in the COVID group. He's outside that now.

Okay. His second question is, can you share your thoughts on the impact of B50 to the Bumi mining costs?

I couldn't give you a number at the moment. I haven't done the numbers, but I should expect another five to ten cents per litre. It may well cost. It's up to see that used to be there by the government is still not there.

I have a client who just texted me. Her question is with regards to the two directors from CIC that has just resigned from the EGM, does it mean that CIC will totally exit from the business? What do you think about it?

We understand The China government had the policy of not being invested in thermal coal. And that's what we believe is the reason. And if you see in the public markets, they're setting down their shares in booming at the moment. So we assume that that's the plan, and that's why they resigned, and their plan is to exit. I think this is their last thermal coal asset that CIT has.

Got it. Okay, a question from Yoga. Can you share production outlook for Wolfram and Jubilee Mining, including annual production target and cash costs?

For Wolfram Mighty, on an annualized basis commencing in June 2026, we're expecting 50,000 ounces at this stage, although we won't be surprised if we commence production prior to that date.

And I think Jubilee would do about $25,000, $5,000 once it's in full production. Cost-wise, we'll come back to you once the budgets are closed and finished.

Thank you. Can I follow up on these two? What are the rough mine life that we should expect with this kind of production?

Well, you know, with gold, it's always the case of you drill as you go and replace the years. There's a lot of my life in both of them, based on the potential resources and reserves available. And we'll update as we go, but we have more than enough life to get our money back and a good return.

Sure, thanks. Benjamin has more questions. He's asking, who is replacing Pak Ashok following the end of his tenure? And any other potential M&A going forward?

Well, after more than I've asked in CFO as well, there's a discussion, a big discussion going on internally, and once it's been resolved, then we'll we'll make an announcement.

And to the second question, which I'm happy to answer, it is also no secret of our expansion plans in terms of the transition model, and we're expecting in the next, within five years, to be, on an IBTAR basis, 50% in power with our coal. So therefore, naturally, we will be announcing further acquisitions as we move forward. And we expect that in the next six to 12 months.

Norman, we can see what you're writing.

I don't know if that was... Oh, so sorry, so sorry. I mean, I have to write it down, right? So, yeah, so sorry. I forgot to off my screen.

So what I'm saying is yes, it's very clear that we're undertaking a very aggressive transformation and we have a very big development unit who are focusing on assets not just in Australia but also in Indonesia. So that has been reflected in some of the announcements that we've talked about today and there certainly will be more coming. But also don't discount that, look, we're still in thermal coal. We are very focused on streamlining, streamlining, streamlining, streamlining, sorry, excuse me, that production. And you would have seen the results today that was significant savings and cost savings we're seeing at the mines. And that will continue. So very much focused on thermal coal, but as we expanded this transition, you'll see more metals and you'll see more downstream processing assets come on board.

Anyone have more questions? Yeah, it seems there's no more questions. Maybe let's wait for a little bit more. Yeah, I think there's no more questions from everyone. Okay, so that concludes the earnings call today. Thank you, Buck and Brew. Thank you, Buck, Chris, for doing this for us. As usual, if you have questions, you can reach out to them directly or you can reach out to me.

Sorry, Norman, can I just add that, look, apart from this transformation, there has been a significant restructure of Germany. We have a much larger investor relations department, and we're very transparent, so we're very happy for engagement from anybody who has questions about the business.

And if you're not getting the updates from the company, please contact us here.

Thank you so much. Thanks, everyone. Thanks so much. Thank you. Thank you.