Mariel Grazella, The Jakarta Post, Jakarta | Business | Sat, September 01 2012
PT Adaro Energy, Indonesia’s second largest coal miner, saw its net revenues increase 9.1 percent to US$1.9 billion in the first half of this year despite sinking coal prices, the company’s latest financial report shows.
Global coal prices dipped 22.5 percent from $109.29 per ton to $84.65 in August. Other major local coal mining firms, including PT Bumi Resources, blamed weak prices for lackluster performance in the first half.
Garibaldi Thohir, Adaro Energy’s president director, attributed higher net revenues to strong coal prices at the end of 2011 and at the beginning of the year.
Besides revenues, PT Adaro Energy also reported growth in earnings before interest, taxes, depreciation and amortization (EBITDA), which climbed 4.4 percent to $667.5 million.
The company’s liabilities stood at $812.5 billion, 4 percent higher than the same period in 2011, while PT Adaro Energy’s net income declined by 3 percent to $260.1 million.
The company also reported that its gross profit margin was stagnant at 33 percent, given that production costs excluding royalties rose 10.4 percent to $38.03 per ton.
The company attributed the rise in production costs to “longer overburden hauling distances and higher fuel costs”.
“Originally, our guidance for the full year of 2012 was $40 to $45 per ton. However, we are now look at $39 to $42 due to below-budget fuel prices from our fuel swap and cost reduction initiatives,” Garibaldi said.
In addition to revising production costs, the firm has readjusted its production, earnings and capital expenditure target, citing turbulence in commodity prices and market conditions.
The US and European markets continue to remain weak, while China’s economy has experienced a slowing down.
“Given the market circumstances, we have reevaluated the timing of our capital expenditures in
an effort to preserve cash,” Garibaldi said.
Garibaldi said that PT Adaro Energy has lowered its capital expenditures from between $650 and $700 million to $400 and $500 million.
“The largest reduction in spending will be for heavy equipment, as our current fleet provides us adequate capacity for our production targets,” Garibaldi said, adding that PT Adaro Energy’s production targets have also been readjusted.
“We revised down our production guidance for 2012 to 48 to 51 million tons from 50 to 53 million tons due to challenging market conditions,” Garibaldi said.
The revisions consequently brought down PT Adaro Energy’s earning expectations from between around $1.2 billion to $1.5 billion to between $1 billion and $1.3 billion.
He added that PT Adaro Energy planned to “focus on cost control and improving operational efficiencies” to weather the “cyclical downturn”.
“We are not immune to cyclical downturns,” Garibaldi said. “At times like these, we need to get back to the basics.”
The share price of PT Adaro Energy was Rp 1,370 apiece at the close of today’s trading session on the Indonesia Stock Exchange (IDX), down 1.5 percent from the previous day’s close of Rp 1,350 apiece.
PT Adaro Energy, Indonesia’s second largest coal miner, saw its net revenues increase 9.1 percent to US$1.9 billion in the first half of this year despite sinking coal prices, the company’s latest financial report shows.
Global coal prices dipped 22.5 percent from $109.29 per ton to $84.65 in August. Other major local coal mining firms, including PT Bumi Resources, blamed weak prices for lackluster performance in the first half.
Garibaldi Thohir, Adaro Energy’s president director, attributed higher net revenues to strong coal prices at the end of 2011 and at the beginning of the year.
Besides revenues, PT Adaro Energy also reported growth in earnings before interest, taxes, depreciation and amortization (EBITDA), which climbed 4.4 percent to $667.5 million.
The company’s liabilities stood at $812.5 billion, 4 percent higher than the same period in 2011, while PT Adaro Energy’s net income declined by 3 percent to $260.1 million.
The company also reported that its gross profit margin was stagnant at 33 percent, given that production costs excluding royalties rose 10.4 percent to $38.03 per ton.
The company attributed the rise in production costs to “longer overburden hauling distances and higher fuel costs”.
“Originally, our guidance for the full year of 2012 was $40 to $45 per ton. However, we are now look at $39 to $42 due to below-budget fuel prices from our fuel swap and cost reduction initiatives,” Garibaldi said.
In addition to revising production costs, the firm has readjusted its production, earnings and capital expenditure target, citing turbulence in commodity prices and market conditions.
The US and European markets continue to remain weak, while China’s economy has experienced a slowing down.
“Given the market circumstances, we have reevaluated the timing of our capital expenditures in
an effort to preserve cash,” Garibaldi said.
Garibaldi said that PT Adaro Energy has lowered its capital expenditures from between $650 and $700 million to $400 and $500 million.
“The largest reduction in spending will be for heavy equipment, as our current fleet provides us adequate capacity for our production targets,” Garibaldi said, adding that PT Adaro Energy’s production targets have also been readjusted.
“We revised down our production guidance for 2012 to 48 to 51 million tons from 50 to 53 million tons due to challenging market conditions,” Garibaldi said.
The revisions consequently brought down PT Adaro Energy’s earning expectations from between around $1.2 billion to $1.5 billion to between $1 billion and $1.3 billion.
He added that PT Adaro Energy planned to “focus on cost control and improving operational efficiencies” to weather the “cyclical downturn”.
“We are not immune to cyclical downturns,” Garibaldi said. “At times like these, we need to get back to the basics.”
The share price of PT Adaro Energy was Rp 1,370 apiece at the close of today’s trading session on the Indonesia Stock Exchange (IDX), down 1.5 percent from the previous day’s close of Rp 1,350 apiece.
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