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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, 30 June 12
THE FREIGHT RATES ARE EXPECTED TO BE STEADY TO FIRM NEXT WEEK - VISTAAR SINGAPORE
COALspot.com – The BDI was up by 2.66 pct (up by 26 points) closing at 1,004 points crossing the 1000 point barrier this week.
The c ...
Friday, 29 June 12
INDONESIAN PRODUCERS ARE PLANNING TO CUT PRODUCTION IF COAL PRICES FALL FURTHER
COALspot.com: Indonesia, the world largest multi grade coal exporter, shipped 31.54* million tons of coal in May 2012, compared to 31.86* mill ...
Friday, 29 June 12
DRY BULK SHIP OWNERS DOING THEIR MATHS BEFORE PLACING NEWBUILDING ORDERS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
With oversupply having plagued the dry bulk shipping fleet since the end of 2011, it’s become ever so evident that placing a newbuilding order ...
Thursday, 28 June 12
DRY BULK MARKET HIGHER ON CAPESIZE OPTIMISM - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market inched a bit higher yesterday, as the BDI (Baltic Dry Index) ended up by 0.71% to 988 points. Most ship types were up, with the ...
Wednesday, 27 June 12
DIRECTORATE GENERAL OF MINERAL AND COAL OF INDONESIA INTRODUCES ON-LINE SYSTEM FOR MINING PRODUCTS EXPORT APPROVAL
COALspot.com - Directorate General of Mineral and Coal of Indonesia has released "Clear and Clean" certificate for another 33 coal miners ...
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- Indonesian Coal Mining Association
- Karbindo Abesyapradhi - Indoneisa
- Energy Development Corp, Philippines
- Intertek Mineral Services - Indonesia
- Australian Coal Association
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Medco Energi Mining Internasional
- Bangladesh Power Developement Board
- Chettinad Cement Corporation Ltd - India
- The Treasury - Australian Government
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Heidelberg Cement - Germany
- Standard Chartered Bank - UAE
- Indogreen Group - Indonesia
- Bhatia International Limited - India
- Agrawal Coal Company - India
- Central Java Power - Indonesia
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Bayan Resources Tbk. - Indonesia
- Gujarat Sidhee Cement - India
- Barasentosa Lestari - Indonesia
- Mercator Lines Limited - India
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Tata Chemicals Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Krishnapatnam Port Company Ltd. - India
- Dalmia Cement Bharat India
- Ind-Barath Power Infra Limited - India
- Indian Energy Exchange, India
- San Jose City I Power Corp, Philippines
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Bulk Trading Sa - Switzerland
- Price Waterhouse Coopers - Russia
- Directorate Of Revenue Intelligence - India
- Bhoruka Overseas - Indonesia
- Sinarmas Energy and Mining - Indonesia
- ICICI Bank Limited - India
- India Bulls Power Limited - India
- Thai Mozambique Logistica
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Kepco SPC Power Corporation, Philippines
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Commonwealth Bank - Australia
- Petrochimia International Co. Ltd.- Taiwan
- New Zealand Coal & Carbon
- Kumho Petrochemical, South Korea
- Timah Investasi Mineral - Indoneisa
- London Commodity Brokers - England
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Wood Mackenzie - Singapore
- Siam City Cement PLC, Thailand
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Latin American Coal - Colombia
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Star Paper Mills Limited - India
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Larsen & Toubro Limited - India
- Sical Logistics Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Madhucon Powers Ltd - India
- Orica Mining Services - Indonesia
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- International Coal Ventures Pvt Ltd - India
- Tamil Nadu electricity Board
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- SMC Global Power, Philippines
- OPG Power Generation Pvt Ltd - India
- Ministry of Transport, Egypt
- Eastern Energy - Thailand
- VISA Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- PowerSource Philippines DevCo
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Meenaskhi Energy Private Limited - India
- Jaiprakash Power Ventures ltd
- PNOC Exploration Corporation - Philippines
- Eastern Coal Council - USA
- ASAPP Information Group - India
- Cement Manufacturers Association - India
- GN Power Mariveles Coal Plant, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Merrill Lynch Commodities Europe
- White Energy Company Limited
- Malabar Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Marubeni Corporation - India
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Indian Oil Corporation Limited
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Toyota Tsusho Corporation, Japan
- Globalindo Alam Lestari - Indonesia
- Petron Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Maheswari Brothers Coal Limited - India
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Manunggal Multi Energi - Indonesia
- Altura Mining Limited, Indonesia
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- Cigading International Bulk Terminal - Indonesia
- Bharathi Cement Corporation - India
- MS Steel International - UAE
- European Bulk Services B.V. - Netherlands
- Thiess Contractors Indonesia
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- Minerals Council of Australia
- Ambuja Cements Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Parliament of New Zealand
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Carbofer General Trading SA - India
- Kapuas Tunggal Persada - Indonesia
- Port Waratah Coal Services - Australia
- Aditya Birla Group - India
- Kalimantan Lumbung Energi - Indonesia
- Kideco Jaya Agung - Indonesia
- Electricity Generating Authority of Thailand
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Essar Steel Hazira Ltd - India
- Antam Resourcindo - Indonesia
- Lanco Infratech Ltd - India
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- IHS Mccloskey Coal Group - USA
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Global Green Power PLC Corporation, Philippines
- CNBM International Corporation - China
- Straits Asia Resources Limited - Singapore
- Grasim Industreis Ltd - India
- Africa Commodities Group - South Africa
- Semirara Mining Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Miang Besar Coal Terminal - Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- SN Aboitiz Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Electricity Authority, New Zealand
- Coastal Gujarat Power Limited - India
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