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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 dWe remain optimistic on the long-term outlook of coal as the Asia-Pacific region will continue to drive global seaborne demand for thermal. Despite alternative energy push, coal remains as the most affordable and reliable source of electricity.

Metallurgical coal, on the other hand, is a non-substitutable product in steel-making. The growing Asia economies create increasing needs for infrastructure, thus strengthen demand for electricity and steel. Out of the seven coal assets that we own, two are world-class metallurgical coal assets. With our extensive range of portfolio of coal products from low pollutant thermal coal to hard coking coal, we are well-positioned to capture these growth potentials.

For a mining company, the quality and extent of its reserves and resources base are essential, because these features provide a range of value-creating options for the future. On an equity adjusted basis, we have estimated our coal reserves at 1.1 Bt and coal resources at 4.7 Bt. We understand the importance of reserves and are focused to maintain our reserve life by implementing good mining practices and continuous exploration.

We have coal mining assets in both Indonesia and Australia, regions of major coal producers and exporters in the seaborne market. Our reserves constitute thermal coal among the lowest pollutant content in the seaborne market to hard coking coal with low sulphur content from the only hard coking coal deposit in Indonesia.

We will continue to develop from these assets and are looking at ways we can create maximum value from them, such as building mine-mouth power plants or coal processing facilities.

Our Envirocoal products are one of the cleanest fossil fuels in the world because of its ultra-low sulphur, ash and nitrogen contents. It has been widely used since 1992 in many countries throughout the world, and domestically in Indonesia, mainly as a blending coal to complement more common high-ash, high-sulphur coals, for creating better cost/value products.

Due to its unique low-pollutant qualities, Envirocoal provides excellent economic and technical benefits, thanks to lower maintenance and operating costs and improved combustion, ash handling and ash disposal efficiencies.

Our integrated eight business pillars differentiate us from others and enable deepened cooperation, synergy and low cost operations. This business model provides a reliable coal production and supply chain as well as multiple opportunities across the value chain. The large business scale we currently have is the result of this integrated supply chain.

Coal mining is a cyclical business, but we have developed non-coal mining businesses to protect earnings during down cycles of coal. These businesses continue to grow their earning contributions to the company, and in 2020 accounted for 46% of our operational EBITDA.

Our integrated business model was once again tested by the challenging market conditions and proved to be resilient, as shown in 2020’s results. Despite tremendous pressure on profitability, we recorded operational EBITDA of US$883 million and core earnings of US$405 million, exhibiting the quality of our earnings and the resilient performance of our business model.

We continuously improve our good corporate governance and recently rour score at the ASEAN Corporate Governance Scorecard significantly increased.

We also have the unceasing support from our reputable and supportive key shareholders. Our major shareholders are respected Indonesian business persons with reputable track records. They collectively own approximately 65% of the company and with each one of them owns a relatively equal stake, we have a system of checks and balances in decision-making to ensure that all decisions are made in the best interest of Adaro Energy and long term value creation. Mining is a long-term, capital intensive business, and our shareholders are committed to building a great company and to continue to contribute to the nation.

Being one of Indonesia’s largest coal producers, we aim to manage our businesses to uphold economic, environmental, social, and governance considerations. From the time we mined our first tonne of coal, the great attention for the well-being of the communities and environment in our operational as well as surrounding areas have always been one of our key focuses. Together with our stakeholders, we strive to create shared values and champion the principles of mutual respect, partnership and long-term commitment.

For our workforce, we are committed to the highest measures of health and safety. Our employees worked over 108 million working hours in 2020, and recorded seven lost-time injury incidents. Amid COVID-19, our main focus is to keep all of our employees safe. We implemented strict health protocols at our operations and were able to keep our operations running smoothly.

We continue to implement various green initiatives to lower the impact of our operations to the environment, such as treatment of ex-mine water and planting trees to absorb CO2.

A long time player in this industry, we are used to cycles. Our strategy to navigate the headwinds in 2020 was to focus on cash preservation, cost discipline, and productivity improvement. We carefully invested US$169 million to grow and sustain our business, and at the end of 2020, we had US$1.17 billion in cash, US$1.71 billion access to liquidity, and generated positive free cash flows of US$630 million. We delivered an industry leading operational EBITDA margin of 35% and contributed to the nation through US$338 million in taxes and royalties.

In a challenging year for the industry, we recorded operational EBITDA of US$883 million, and achieved our operational EBITDA guidance of US$600 million – US$800 million. We maintain a healthy capital structure with a net debt to operational EBITDA ratio of 0.19x and net debt to equity ratio of 0.04x.

Last modified on May 30, 2021, 2:11 pm | 234061