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Thursday, 05 July 12
BUMI ACHIEVES HIGHER SELLING PRICE IN FIRST QUARTER
 COALspot.com - PT Bumi Resources Tbk (BUMI), Indonesia's largest coal producer and exporter, has successfully maintained a higher sales margin, despite months of despair in the commodities sector, especially, thermal coal due to apprehension about the Eurozone crisis and speculation of lower short term growth prospects in China and India.
− Sales revenue up 19%, crosses $1 billion mark
− strong operating performance; approaching 16 million tons Volume
− stable operating income $149 million
− falling market, weakening currency hurts bottom line
− on track to cross 100 million tons coal production in 2014
According to BUMI’s today press release, first quarter 2012 audited financial results, a production and sales of 15.9 million tons was recorded compared with 14.3 million tons and 13.9 million tons, respectively, in the same period last year.
Bumi’s sales revenue was $1,007.9 million in Jan/Mar '12 up 18.6 percent compared with $849.9 million in this period last year. This revenue excludes 30 percent of coal sales from KPC and Arutmin attributable to Tata Power, according to BUMI’s press release.
Quite to the contrary, the average selling price of our coal is $92.8/ton in Q1'12 compared with $87.7/ton in Q1'11 or higher by 5.8 percent. BUMI has benefited greatly by its long term contracts with its blue chip customers. Although we experienced an 18.9% fuel cost increase ($0.98/liter in Q1'12 vs $0.83/liter in Q1'11) and expensed full stripping, our gross margin increased by 18.6 percent to $321.3 million yoy, the report said.
Bumi has been able to reduce selling commission to 2.5% (from 4%) when Glencore became its agent for Arutmin in the fourth quarter last year.
Operating income of $149.1 million in Jan/Mar '12 was recorded. A point to note is that this number adjusts $ 65.7 million as a one off amortization on our development assets arising from the new internal accounting policy we adopted this year, the report furtherer said.
The lower restated net income for Q1'11 is due to the new accounting policy adopted last year. Under this policy we have restated some figures from last year which may attract investors' attention in the short term. However, we believe that the benefits from an improved reputation and adoption of best international practices would far outweigh the short term book adjustments necessary, Bumi said in its report.
An adverse global market environment, the worsening Eurozone situation, a weakening rupiah and lower activity at Newmont's Indonesia operations have contributed in,
a) reversing our previous derivative gains because our share price fell by 30% yoy and revaluation of prepayment options of the 2 remaining tranches of CIC loan,
b) forex losses arising from the quarterly revaluations of VAT refundable by the Government of Indonesia,
c) a much lower income inflow from Newmont Nusa Tenggara because of the expected reduced activity from their Batu Hijau mine until their new mines are operational.
These factors have been the primary reasons for recording a reversal of our net income from positive to negative in Q1'12. But as the global and market environment registers improvement we believe the situation would favour Bumi during the later part of this year, BUMI explained its report.
Still delivering all promises
Acording to press release from BUMI, the proactive adjustments to new accounting standards - as per regulation and our new management policy in line with international practices -is another step by BUMI to deliver its promises in addressing four strategic issues the market is focused on i.e.
a) debt reduction (deleveraging and interest cost reduction),
b) value improvement,
c) operational excellence, and
d) a perception turnaround.
On operational excellence, Bumi's production increased by 11.5 percent to 15.9 million tons in Q1'12 from 14.3 million tons in Q1'11. We are hopeful of ending the year at ca 75 million tons (compared with 65.9 million tons in 2011), of this 80 percent is already contracted and priced at upwards of $85/ton FOB, the report said.
The average strip ratio in Q1'12 is 10.8 compared with 11.9 in the same period last year and we are working to drop this further to ca 10 which is targeted for this year. This indicates increasing efficiency in coal production. If fuel price weakens, we benefit by lower costs. Since 2009 the cost of diesel oil to produce 1 ton of coal has ranged from $ 5.6 (2009) to a high of $12.6/ton (Q1'12). Hence, the impact is significant and accounted for 27% of our production cash cost in Q1’12. A lower strip ratio (which is the volume of overburden removed - bcm - for every ton of coal mined) would be another downward cost trigger.
Infrastructure balancing projects to achieve a production capability exceeding 100 million tons/annum of coal in 2014 are on track. The underlying principle adopted is to build overcapacity across all elements of the coal supply chain and give us a 'make up' capability during adverse environmental conditions.
The 2nd OLC (Overland Conveyor) has already been installed in KPC - this now enables KPC to transport 64 million tons of processed coal to the port in a year (in 25 minutes at a speed of 30 km/ hour). The ship loading capacity at Tanjung Bara port in KPC is already operating at 7500 tons per hour (compared with earlier rate of 4500 tons per hour).
According to Bumi Resources Tbk's President Director Ari Hudaya, “Sustaining BUMI's global market leadership in thermal coal export while facing an uncertain and declining price environment can only be done by investing more in company's production facility to increase production capacity whilst improving efficiency.”
"This way, not only are we in a position to lower unit production cost but ensure the company's ability to offer long term supply contracts at best prices. Our standing in the short term remains very strong, and our global clientele can have peace of mind due to safe supply," said Dileep Srivastava, Director and Corporate Secretary of Bumi Resources.
Bumi's management was challenged with maintaining sustainable transformation of the company in the short term while strengthening its market leadership for the long term, in our businesses. "For our coal operations, depreciation charges are expected to be higher due to replacement of older equipment with newer technology and machinery to increase efficiency. So are stripping and increased mining activity, historical exploration expenses. We expense these today, as far as we can, as part of our commitment in transforming BUMI as the National Coal Champion with best global practices," Dileep added.
Prospects for 2012
Production - ca 75 million tons (no change)
Expected price - +$85/ton (from ca $90/ton)
Production cash cost -$42/ ton (from $40/ton & restated $44/ton in FY 2011)
We plan to review in October 2012 and provide a further refinement for this year - based on Jan/Sep year to date figures, Bumi's said on its report.
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Saturday, 07 July 12
EXCESS SUPPLY & WEAK DEMAND KEEP COAL PRICES LOW
COALspot.com - SGX AsiaClear OTC Coal Swaps for August and Q4 deliveries slipped slightly this week. SGX’s Indonesian sub-bituminous coal swap ...
Saturday, 07 July 12
BALTIC INDEX UP ON STRONG CAPE, PANAMAX RATES - VISTAAR
COALspot.com - This week all the segments were firmed up with BDI up by 15.23 pct (up by 153 points) closing at 1,157 points.
The cape index also ...
Saturday, 07 July 12
DRY BULK MARKET NOT ABLE TO FIND SOLID GROUND SAY EXPERTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With the second half of each, traditionally looking the most active one, especially in terms of newbuildings being delivered, it's highly unlikely ...
Thursday, 05 July 12
GOVT GETS READY FOR $1.8B SUIT - THE JAKARTA POST
The Jakarta Post, one of the leading Indonesian English new papers reported that, several ministries and the Attorney General’s Office held a ...
Thursday, 05 July 12
DRY BULK MARKET MOVES FURTHER UP THE HILL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept its growth momentum by the middle of the week, as the BDI (Baltic Dry Index) rose by an additional 40 points to 1,103 p ...
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- Indonesian Coal Mining Association
- Straits Asia Resources Limited - Singapore
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- Altura Mining Limited, Indonesia
- Timah Investasi Mineral - Indoneisa
- Xindia Steels Limited - India
- Riau Bara Harum - Indonesia
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Thiess Contractors Indonesia
- Therma Luzon, Inc, Philippines
- Siam City Cement - Thailand
- CNBM International Corporation - China
- Bahari Cakrawala Sebuku - Indonesia
- Chamber of Mines of South Africa
- Simpson Spence & Young - Indonesia
- The State Trading Corporation of India Ltd
- Indo Tambangraya Megah - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- PTC India Limited - India
- Coal and Oil Company - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- Oldendorff Carriers - Singapore
- Australian Commodity Traders Exchange
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sarangani Energy Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Makarim & Taira - Indonesia
- Star Paper Mills Limited - India
- Eastern Energy - Thailand
- Maheswari Brothers Coal Limited - India
- Intertek Mineral Services - Indonesia
- Salva Resources Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Ind-Barath Power Infra Limited - India
- Jindal Steel & Power Ltd - India
- Power Finance Corporation Ltd., India
- San Jose City I Power Corp, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Ambuja Cements Ltd - India
- IEA Clean Coal Centre - UK
- Kapuas Tunggal Persada - Indonesia
- Petron Corporation, Philippines
- Australian Coal Association
- Ministry of Transport, Egypt
- Independent Power Producers Association of India
- Gujarat Sidhee Cement - India
- Standard Chartered Bank - UAE
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Planning Commission, India
- Mercuria Energy - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Bangladesh Power Developement Board
- Semirara Mining and Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Kideco Jaya Agung - Indonesia
- Anglo American - United Kingdom
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- New Zealand Coal & Carbon
- Karbindo Abesyapradhi - Indoneisa
- Edison Trading Spa - Italy
- Vijayanagar Sugar Pvt Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- ICICI Bank Limited - India
- Bulk Trading Sa - Switzerland
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Vedanta Resources Plc - India
- Grasim Industreis Ltd - India
- Economic Council, Georgia
- Central Electricity Authority - India
- Ministry of Finance - Indonesia
- SMC Global Power, Philippines
- Antam Resourcindo - Indonesia
- Semirara Mining Corp, Philippines
- Indian Energy Exchange, India
- Global Coal Blending Company Limited - Australia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- PetroVietnam Power Coal Import and Supply Company
- Interocean Group of Companies - India
- The Treasury - Australian Government
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- Latin American Coal - Colombia
- Leighton Contractors Pty Ltd - Australia
- Uttam Galva Steels Limited - India
- Alfred C Toepfer International GmbH - Germany
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Indogreen Group - Indonesia
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Videocon Industries ltd - India
- OPG Power Generation Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Directorate Of Revenue Intelligence - India
- Heidelberg Cement - Germany
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Sree Jayajothi Cements Limited - India
- Rashtriya Ispat Nigam Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Sojitz Corporation - Japan
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- Renaissance Capital - South Africa
- Binh Thuan Hamico - Vietnam
- Kobexindo Tractors - Indoneisa
- Bhushan Steel Limited - India
- London Commodity Brokers - England
- Parliament of New Zealand
- Gujarat Mineral Development Corp Ltd - India
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Wilmar Investment Holdings
- Kaltim Prima Coal - Indonesia
- Meralco Power Generation, Philippines
- GMR Energy Limited - India
- SMG Consultants - Indonesia
- Larsen & Toubro Limited - India
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- LBH Netherlands Bv - Netherlands
- Mintek Dendrill Indonesia
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Carbofer General Trading SA - India
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- Sical Logistics Limited - India
- CIMB Investment Bank - Malaysia
- Savvy Resources Ltd - HongKong
- Ministry of Mines - Canada
- Commonwealth Bank - Australia
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Singapore Mercantile Exchange
- Sakthi Sugars Limited - India
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Kohat Cement Company Ltd. - Pakistan
- Mjunction Services Limited - India
- Goldman Sachs - Singapore
- Neyveli Lignite Corporation Ltd, - India
- TNB Fuel Sdn Bhd - Malaysia
- Holcim Trading Pte Ltd - Singapore
- Globalindo Alam Lestari - Indonesia
- White Energy Company Limited
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Vizag Seaport Private Limited - India
- India Bulls Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Generating Authority of Thailand
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