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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, 16 June 12
INDONESIAN SUB-BITUMINOUS COAL & CFR SOUTH CHINA COAL CONTRACT SWAPS ARE UNDER PRESSURE
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for July deliveries seems to be under pressure this week.&nbs ...
Friday, 15 June 12
CAPESIZE - THE LEVELS THAT DID FIX ARE DOWN W-O-W LEVELS - FEARNLEYS
Handy
Another slow-moving market with rates hovering at same level as last week. US Gulf positions fixed USD 25,000 for trips to Cont/Passero and S ...
Thursday, 14 June 12
SMALLER DRY BULK CARRIERS LIKELY TO FACE MORE CHALLENGES; DEMOLITION ACTIVITY SET FOR RECORD YEAR - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
In its latest update on the dry bulk markets, BIMCO said that China is partly “failing to deliver” on raw material imports that can affe ...
Wednesday, 13 June 12
LOW COAL PRICES COULD CHANGE SUPPLY SIDE DYNAMICS - FITCH RATINGS
Fitch Ratings believes that the weakness seen in thermal coal prices in recent months should reverse once demand from major importers recovers, alth ...
Tuesday, 12 June 12
ITACHA RESOURCES BUYS SARANA MARINE - INSIDER STORIES
Insider Stories reported that, coal mining company PT Itacha Resources, a joint venture between Anthoni Salim and Glenn Yusuf, announced that Itacha ...
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- Standard Chartered Bank - UAE
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- Mintek Dendrill Indonesia
- Bhushan Steel Limited - India
- Sindya Power Generating Company Private Ltd
- Energy Development Corp, Philippines
- Globalindo Alam Lestari - Indonesia
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
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- Eastern Coal Council - USA
- Edison Trading Spa - Italy
- PNOC Exploration Corporation - Philippines
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- Gujarat Mineral Development Corp Ltd - India
- Interocean Group of Companies - India
- Commonwealth Bank - Australia
- Dalmia Cement Bharat India
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- White Energy Company Limited
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
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- Madhucon Powers Ltd - India
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- Ministry of Mines - Canada
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- Economic Council, Georgia
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- New Zealand Coal & Carbon
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- Therma Luzon, Inc, Philippines
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- Romanian Commodities Exchange
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- Tamil Nadu electricity Board
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- Orica Australia Pty. Ltd.
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- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Georgia Ports Authority, United States
- European Bulk Services B.V. - Netherlands
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Intertek Mineral Services - Indonesia
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maharashtra Electricity Regulatory Commission - India
- IEA Clean Coal Centre - UK
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- SMC Global Power, Philippines
- Jindal Steel & Power Ltd - India
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Sidhee Cement - India
- Grasim Industreis Ltd - India
- The Treasury - Australian Government
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Baramulti Group, Indonesia
- Meenaskhi Energy Private Limited - India
- Bangladesh Power Developement Board
- Africa Commodities Group - South Africa
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- Vizag Seaport Private Limited - India
- Rio Tinto Coal - Australia
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- Videocon Industries ltd - India
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- Cigading International Bulk Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
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- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
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- Maheswari Brothers Coal Limited - India
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- Latin American Coal - Colombia
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Australian Commodity Traders Exchange
- Parry Sugars Refinery, India
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- VISA Power Limited - India
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- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Straits Asia Resources Limited - Singapore
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- Ministry of Transport, Egypt
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- Bayan Resources Tbk. - Indonesia
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- Wood Mackenzie - Singapore
- Thiess Contractors Indonesia
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
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- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- GVK Power & Infra Limited - India
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Sojitz Corporation - Japan
- Indian Energy Exchange, India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Petrochimia International Co. Ltd.- Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Independent Power Producers Association of India
- Meralco Power Generation, Philippines
- Singapore Mercantile Exchange
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
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- GAC Shipping (India) Pvt Ltd
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- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
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- Coal and Oil Company - UAE
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- International Coal Ventures Pvt Ltd - India
- Thai Mozambique Logistica
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- Ceylon Electricity Board - Sri Lanka
- Binh Thuan Hamico - Vietnam
- Semirara Mining and Power Corporation, Philippines
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- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Parliament of New Zealand
- Minerals Council of Australia
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- Savvy Resources Ltd - HongKong
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- ASAPP Information Group - India
- Metalloyd Limited - United Kingdom
- Renaissance Capital - South Africa
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- TeaM Sual Corporation - Philippines
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