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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 $44/ton in FY 2011)
We plan to review in October 2012 and provide a further refinement for this year - based on Jan/Sep year to date figures, Bumi's said on its report.
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Tuesday, 22 May 12
DRY BULK MARKET STEADY, AWAITING FURTHER RISE IN DEMAND WHICH IS DOUBTFUL - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Traditionally, the second and third quarters of the year are the strongest for the dry bulk market, but this year, things seem to be quite subdued, ...
Sunday, 20 May 12
SPOT FREIGHT RATE DIPS FURTHER - VISTAAR
COALspot.com - The BDI was marginally up by 3 points (0.26 pct) closing at 1,141 points.
The cape index was up by 1.17 pct closing at 1,633 point ...
Saturday, 19 May 12
INDONESIAN SUB-BITUMINOUS COAL SWAPS DROP US$ 2.88 PMT W-O-W
COALspot.com - Indonesian sub-bituminous coal swaps and CFR South China coal contracts for June deliveries have drops this week by 3.86 percent and& ...
Saturday, 19 May 12
INDONESIAN EXPORT TAX GIVES COAL MINERS A CHEAP RIDE: ANALYSTS - THE JAKARTA GLOBE
The Jakarta Globe reported that, Indonesia’s policy to exclude coal from an export tax that has been applied to 14 other mineral commodities h ...
Friday, 18 May 12
EXPORT TAX WILL ERODE PROFITS, INDONESIAN COAL EXEC COMPLAINS - THE JAKARTA GLOBE
The Jakarta Globe reported that, A 20 percent export duty the government has imposed on 14 mineral ore products will not only take a toll on mining ...
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- Kaltim Prima Coal - Indonesia
- Deloitte Consulting - India
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- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Banpu Public Company Limited - Thailand
- Kepco SPC Power Corporation, Philippines
- Wilmar Investment Holdings
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Planning Commission, India
- Australian Coal Association
- Ministry of Mines - Canada
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Siam City Cement - Thailand
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Generating Authority of Thailand
- Karbindo Abesyapradhi - Indoneisa
- Latin American Coal - Colombia
- Marubeni Corporation - India
- McConnell Dowell - Australia
- Alfred C Toepfer International GmbH - Germany
- Gujarat Mineral Development Corp Ltd - India
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- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- The Treasury - Australian Government
- Bharathi Cement Corporation - India
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Attock Cement Pakistan Limited
- Vizag Seaport Private Limited - India
- Maharashtra Electricity Regulatory Commission - India
- White Energy Company Limited
- Metalloyd Limited - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
- Salva Resources Pvt Ltd - India
- Cement Manufacturers Association - India
- Globalindo Alam Lestari - Indonesia
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- Interocean Group of Companies - India
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- Simpson Spence & Young - Indonesia
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- Miang Besar Coal Terminal - Indonesia
- Eastern Coal Council - USA
- Bukit Asam (Persero) Tbk - Indonesia
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Meenaskhi Energy Private Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Parliament of New Zealand
- Mercator Lines Limited - India
- London Commodity Brokers - England
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Lanco Infratech Ltd - India
- Kumho Petrochemical, South Korea
- Ceylon Electricity Board - Sri Lanka
- Standard Chartered Bank - UAE
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Asmin Koalindo Tuhup - Indonesia
- Price Waterhouse Coopers - Russia
- Indonesian Coal Mining Association
- Formosa Plastics Group - Taiwan
- Heidelberg Cement - Germany
- IEA Clean Coal Centre - UK
- Binh Thuan Hamico - Vietnam
- Bhatia International Limited - India
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Kapuas Tunggal Persada - Indonesia
- Mjunction Services Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Ambuja Cements Ltd - India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- CNBM International Corporation - China
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Commonwealth Bank - Australia
- Africa Commodities Group - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Central Electricity Authority - India
- Billiton Holdings Pty Ltd - Australia
- MS Steel International - UAE
- Bangladesh Power Developement Board
- Carbofer General Trading SA - India
- Holcim Trading Pte Ltd - Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- OPG Power Generation Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Kohat Cement Company Ltd. - Pakistan
- Anglo American - United Kingdom
- Mintek Dendrill Indonesia
- LBH Netherlands Bv - Netherlands
- Petron Corporation, Philippines
- Trasteel International SA, Italy
- The University of Queensland
- European Bulk Services B.V. - Netherlands
- Jaiprakash Power Ventures ltd
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Jindal Steel & Power Ltd - India
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Coal and Oil Company - UAE
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Semirara Mining Corp, Philippines
- SN Aboitiz Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Essar Steel Hazira Ltd - India
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- San Jose City I Power Corp, Philippines
- Meralco Power Generation, Philippines
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- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- ICICI Bank Limited - India
- Krishnapatnam Port Company Ltd. - India
- Kalimantan Lumbung Energi - Indonesia
- Sojitz Corporation - Japan
- Edison Trading Spa - Italy
- Bhushan Steel Limited - India
- Samtan Co., Ltd - South Korea
- Aboitiz Power Corporation - Philippines
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Bayan Resources Tbk. - Indonesia
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- TNB Fuel Sdn Bhd - Malaysia
- PTC India Limited - India
- GMR Energy Limited - India
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Ministry of Transport, Egypt
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Medco Energi Mining Internasional
- Maheswari Brothers Coal Limited - India
- Posco Energy - South Korea
- Therma Luzon, Inc, Philippines
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Thiess Contractors Indonesia
- Wood Mackenzie - Singapore
- AsiaOL BioFuels Corp., Philippines
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