PT Adaro Energy Indonesia Tbk : Financial Press Release 1Q22

NEWS RELEASE

Jakarta, April 28, 2022

PT Adaro Energy Indonesia Tbk Maintains Solid Quality of Earnings and Achieves

Operational EBITDA of US$755 Million

Jakarta, April 28, 2022 - PT Adaro Energy Indonesia Tbk (IDX: ADRO) (AEI) today released its financial performance for the three months period ended March 31, 2022, alongside its operational performance for the period. We booked operational EBITDA of US$755 million, and maintained solid operational EBITDA margin of 62%. Coal sales in 1Q22 decreased 3% y-o-y to 12.20 Mt while coal production decreased 6% y-o-y to 12.15 Mt, as heavy rains affected mining activities in the quarter. We remain focus on efficiency and operational excellence to ensure that we continue to be a reliable partner for our customers and other stakeholders.

Our President Director and Chief Executive Officer, Mr. Garibaldi Thohir, said:

"Our resilient, integrated business model continues to deliver. The higher coal prices in the quarter coupled with our operational excellence benefited Adaro and we were able to book solid profitability in 1Q22. We generated operational EBITDA of US$755 million and core earnings of US$484 million, which reflect the strength of our operations and earnings. We will continue to focus on operational excellence and be disciplined in cost and capital spending."

Highlights of 1Q22 performance:

• • We recorded an operational EBITDA of US$755 million. Operational EBITDA excludes non-operational items and reflects the true performance of our operations.

• • We generated US$352 million of free cash flows in 1Q22, 237% increase y-o-y. The company remained in a net cash position during 1Q22.

• • Our underlying core earnings for the period was US$484 million, 341% higher y-o-y. Core earnings exclude non-operational items net of tax and reflect our performance without the effect of accounting.

• 1 Profit for the period, excluding non-operational items net of tax (amortization of mining properties, prior year tax assessment, decommissioning cost, and recovered allowance for receivable)

• 2 EBITDA excluding decommissioning cost, and recovered allowance for receivables

• 3 Cash including the current portion of other investments

• 4 Capex spending defined as: purchase of fixed assets - proceed from disposal of fixed assets + payment for addition of mining properties + addition of lease liabilities

• 5 Operational EBITDA - taxes - change in net working capital - capital expenditure excluding lease liabilities

Operating Segment

FINANCIAL PERFORMANCE ANALYSIS FOR THE FIRST THREE MONTHS OF 2022 (1Q22)

Revenue, Average Selling Price and Production

We booked revenue of US$1,225 million in 1Q22, a 77% increase compared to 2021, mainly due to 86% higher average selling price (ASP) y-o-y on the back of strong coal price. Our coal production volume in 1Q22 was 12.15 Mt, 6% lower y-o-y, and our coal sales volume in 1Q22 was 12.20 Mt, 3% lower y-o-y. The wet season in 1Q22 affected our operations.

Cost of Revenue

Our cost of revenue in 1Q22 increased by 24% y-o-y to US$623 million, mainly due to higher royalty expense as a result of higher ASP y-o-y. Total fuel cost increased by 64% in-line with higher fuel cost per liter, albeit lower fuel consumption y-o-y. We recorded overburden removal of 48.22 Mbcm in 1Q22, 8% lower y-o-y and strip ratio of 3.97x during 1Q22. Normal wet season in the quarter slowed down our overburden removal activities. Coal cash cost per tonne (excluding royalty) decreased by 17% y-o-y.

Royalties to Government and Corporate Income Taxes

Royalties to the Government of Indonesia and income tax expense reached US$320 million, increased by 159% y-o-y as a result of higher revenue from sales of coal driven by higher ASP.

Operating Expenses

Our operating expenses in 1Q22 increased by 45% y-o-y to US$67 million, mainly due to higher sales commission, higher employee costs, and professional fees.

Operational EBITDA

Our operational EBITDA increased by 209% y-o-y to US$755 million in 1Q22 as the increase in our revenue way surpassed the increase in costs. We recorded a solid operational EBITDA margin of 62% as we continued to improve operational efficiency and cost control.

Core Earnings

Our underlying core earnings in 1Q22 was US$484 million, 341% higher y-o-y. Core earnings excludes non-operational accounting items net of tax, which consisted of, among others, amortization of mining properties, decommissioning cost, and prior year tax assessment.

Total Assets

Our total assets increased by 18% to US$7,630 million. Current assets at the end of 1Q22 was US$2,573 million, or 40% higher y-o-y mainly due to higher cash balance and trade receivables. At the end of 1Q22, our cash balance stood at US$1,556 million. Non-current assets at the end of 1Q22 was 9% higher y-o-y or US$5,057 million.

Fixed Assets

Fixed assets as at the end of 1Q22 were 9% lower y-o-y or US$1,368 million, and accounted for 18% of total assets.

Mining Properties

At the end of 1Q22, our mining properties were 12% lower y-o-y or US$1,186 million, due to regular amortization.

Total Liabilities

Total liabilities of US$2,720 million was 14% higher compared to the same period last year mainly due to higher non-current bank loans. Current liabilities declined by 14% y-o-y to US$980 million, while non-current liabilities increased by 40% y-o-y to US$1,740 million.

Current Maturity of Long-Term Borrowings

The current portion of long-term borrowings in 1Q22 was US$326 million, 47% lower y-o-y compared to US$617 million at the same period last year.

Long-term Borrowings, net of Current Maturity

The non-current portion of long-term borrowings decreased 57% y-o-y to US$1,303 million as some portions of our bank loans are maturing and we booked lower lease liabilities.

Debt Management and Liquidity

Our cash balance at the end of 1Q22 was US$1,556 million. We also had access to US$185 million in other investments and a total of US$242 million in undrawn committed loan facilities, which brought our total liquidity to US$1,983 million at the end of 1Q22.

Our interest bearing debts at the end of 1Q22 were US$1,629 million, 13% higher y-o-y, as the amount that we drew down from our bank facilities was offset by our regular loan payments.

Equity

At the end of 1Q22, our equity level was 20% higher y-o-y, or US$4,910 million, compared to US$4,100 million in 1Q21.

Cash Flows from Operating Activities

During 1Q22, cash flows from operating activities increased 67% to US$214 million, mainly driven by 79% increase in receipts from customers.

Cash Flows from Investing Activities

We booked US$96 million in net cash flows used in investing activities, 78% higher y-o-y, mainly for the purchase of other investments.

Capital Expenditure and Free Cash Flows

Our net capital expenditure in 1Q22 was US$70 million, 73% higher y-o-y. The capital expenditure spending in the period was mainly for purchase and replacement of heavy equipment. We also generated solid free cash flows of US$352 million in 1Q22, 237% higher y-o-y as a result of higher Operational EBITDA.

Cash Flows from Financing Activities

Net cash flows used in financing activities in 1Q22 was US$371 million, which was mainly for dividend payments to our shareholders.

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