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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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- Simpson Spence & Young - Indonesia
- Independent Power Producers Association of India
- The Treasury - Australian Government
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Petron Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Global Business Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- ASAPP Information Group - India
- Posco Energy - South Korea
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Medco Energi Mining Internasional
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Heidelberg Cement - Germany
- Planning Commission, India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- CNBM International Corporation - China
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Chettinad Cement Corporation Ltd - India
- Vedanta Resources Plc - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- London Commodity Brokers - England
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining and Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aditya Birla Group - India
- Indogreen Group - Indonesia
- Cigading International Bulk Terminal - Indonesia
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Manunggal Multi Energi - Indonesia
- Anglo American - United Kingdom
- Edison Trading Spa - Italy
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Bharathi Cement Corporation - India
- Power Finance Corporation Ltd., India
- Thiess Contractors Indonesia
- Sarangani Energy Corporation, Philippines
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Bulk Trading Sa - Switzerland
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Parliament of New Zealand
- European Bulk Services B.V. - Netherlands
- Agrawal Coal Company - India
- Iligan Light & Power Inc, Philippines
- PowerSource Philippines DevCo
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Trasteel International SA, Italy
- Energy Link Ltd, New Zealand
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Meenaskhi Energy Private Limited - India
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Mercator Lines Limited - India
- Attock Cement Pakistan Limited
- Asmin Koalindo Tuhup - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Xindia Steels Limited - India
- Holcim Trading Pte Ltd - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Singapore Mercantile Exchange
- Commonwealth Bank - Australia
- Videocon Industries ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- GVK Power & Infra Limited - India
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Electricity Authority, New Zealand
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
- Directorate Of Revenue Intelligence - India
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- Eastern Energy - Thailand
- Alfred C Toepfer International GmbH - Germany
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Eastern Coal Council - USA
- AsiaOL BioFuels Corp., Philippines
- Jindal Steel & Power Ltd - India
- Wood Mackenzie - Singapore
- Interocean Group of Companies - India
- Gujarat Electricity Regulatory Commission - India
- CIMB Investment Bank - Malaysia
- Uttam Galva Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- Deloitte Consulting - India
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Billiton Holdings Pty Ltd - Australia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- South Luzon Thermal Energy Corporation
- Latin American Coal - Colombia
- Central Electricity Authority - India
- Sindya Power Generating Company Private Ltd
- Jorong Barutama Greston.PT - Indonesia
- Borneo Indobara - Indonesia
- Ministry of Transport, Egypt
- Bayan Resources Tbk. - Indonesia
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Pipit Mutiara Jaya. PT, Indonesia
- Bhatia International Limited - India
- Semirara Mining Corp, Philippines
- Larsen & Toubro Limited - India
- Ambuja Cements Ltd - India
- Sical Logistics Limited - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Wilmar Investment Holdings
- White Energy Company Limited
- Straits Asia Resources Limited - Singapore
- Indonesian Coal Mining Association
- Essar Steel Hazira Ltd - India
- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Krishnapatnam Port Company Ltd. - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Orica Mining Services - Indonesia
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- PTC India Limited - India
- Thai Mozambique Logistica
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
- Ministry of Finance - Indonesia
- India Bulls Power Limited - India
- Central Java Power - Indonesia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Africa Commodities Group - South Africa
- Chamber of Mines of South Africa
- International Coal Ventures Pvt Ltd - India
- Indika Energy - Indonesia
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