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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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Thursday, 03 May 12
DRY BULK MARKET REMAINS INACTIVE, POSTING MILD DECREASE - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
The dry bulk market has kept retreating this week, although at a very low pace, on the back of a lull in demand. The industry's benchmark, th ...
Thursday, 03 May 12
MINERS DEMAND LEGAL CERTAINTY ON PRE-BAN INTERIM POLICY - THE JAKARTA POST
The Jakarta Post reported that, Mining companies represented by the Indonesian Mining Association (IMA) welcomed the government’s plan to impo ...
Thursday, 03 May 12
HANDY EAST COAST INDIA - CHINA AROUND USD 7000 - FEARNLEYS AS
Handy - Stable demand in the Atlantic offered good rates for the tonnage.
USG/Cont was worth USD 17500 and more. Baltic and Black Sea appeared to ...
Wednesday, 02 May 12
CHINA BLACKOUTS HIGHLIGHT PRICING POLICY WEAKNESS - FITCH
Fitch reported that, the likelihood of further electricity blackouts in China this summer underlines Fitch's view of the basic problem f ...
Tuesday, 01 May 12
VIETNAM FEARS IT MAY NOT SEEK COAL SUPPLIES - TBKTSG / VIETNAMNET BRIDGE
TBKTSG / VietNamNet Bridge reported that, with five coal-run thermopower plants under construction, PetroVietnam alone would need 18 million tons of ...
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- Trasteel International SA, Italy
- Simpson Spence & Young - Indonesia
- Kartika Selabumi Mining - Indonesia
- Chettinad Cement Corporation Ltd - India
- Formosa Plastics Group - Taiwan
- Straits Asia Resources Limited - Singapore
- Eastern Coal Council - USA
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Oldendorff Carriers - Singapore
- Attock Cement Pakistan Limited
- Semirara Mining and Power Corporation, Philippines
- Renaissance Capital - South Africa
- PetroVietnam Power Coal Import and Supply Company
- Barasentosa Lestari - Indonesia
- Malabar Cements Ltd - India
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Georgia Ports Authority, United States
- International Coal Ventures Pvt Ltd - India
- Indogreen Group - Indonesia
- CIMB Investment Bank - Malaysia
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Energy Link Ltd, New Zealand
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Madhucon Powers Ltd - India
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- PowerSource Philippines DevCo
- Gujarat Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Kepco SPC Power Corporation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Essar Steel Hazira Ltd - India
- Samtan Co., Ltd - South Korea
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- Indo Tambangraya Megah - Indonesia
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Kapuas Tunggal Persada - Indonesia
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Mercuria Energy - Indonesia
- The University of Queensland
- Medco Energi Mining Internasional
- Tamil Nadu electricity Board
- Petrochimia International Co. Ltd.- Taiwan
- Cement Manufacturers Association - India
- Altura Mining Limited, Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Heidelberg Cement - Germany
- Bhushan Steel Limited - India
- Cigading International Bulk Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Central Java Power - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Holcim Trading Pte Ltd - Singapore
- Kobexindo Tractors - Indoneisa
- IHS Mccloskey Coal Group - USA
- Sakthi Sugars Limited - India
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Central Electricity Authority - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- LBH Netherlands Bv - Netherlands
- Tata Chemicals Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Deloitte Consulting - India
- Australian Coal Association
- Latin American Coal - Colombia
- AsiaOL BioFuels Corp., Philippines
- Lanco Infratech Ltd - India
- Rio Tinto Coal - Australia
- Videocon Industries ltd - India
- Uttam Galva Steels Limited - India
- Billiton Holdings Pty Ltd - Australia
- Bukit Makmur.PT - Indonesia
- The State Trading Corporation of India Ltd
- VISA Power Limited - India
- Thai Mozambique Logistica
- Jaiprakash Power Ventures ltd
- Australian Commodity Traders Exchange
- Metalloyd Limited - United Kingdom
- Kalimantan Lumbung Energi - Indonesia
- Goldman Sachs - Singapore
- Marubeni Corporation - India
- GMR Energy Limited - India
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Alfred C Toepfer International GmbH - Germany
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- Riau Bara Harum - Indonesia
- Vedanta Resources Plc - India
- Baramulti Group, Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Ministry of Finance - Indonesia
- Maheswari Brothers Coal Limited - India
- Petron Corporation, Philippines
- Bharathi Cement Corporation - India
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- Singapore Mercantile Exchange
- CNBM International Corporation - China
- Interocean Group of Companies - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Binh Thuan Hamico - Vietnam
- New Zealand Coal & Carbon
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Anglo American - United Kingdom
- Romanian Commodities Exchange
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Merrill Lynch Commodities Europe
- San Jose City I Power Corp, Philippines
- SMG Consultants - Indonesia
- MS Steel International - UAE
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- White Energy Company Limited
- Directorate General of MIneral and Coal - Indonesia
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Banpu Public Company Limited - Thailand
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Mercator Lines Limited - India
- Semirara Mining Corp, Philippines
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Directorate Of Revenue Intelligence - India
- Maharashtra Electricity Regulatory Commission - India
- Standard Chartered Bank - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Independent Power Producers Association of India
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Planning Commission, India
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Ceylon Electricity Board - Sri Lanka
- European Bulk Services B.V. - Netherlands
- Antam Resourcindo - Indonesia
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- SMC Global Power, Philippines
- The Treasury - Australian Government
- Rashtriya Ispat Nigam Limited - India
- Sree Jayajothi Cements Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- PTC India Limited - India
- Makarim & Taira - Indonesia
- Aboitiz Power Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- IEA Clean Coal Centre - UK
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Sinarmas Energy and Mining - Indonesia
- Parry Sugars Refinery, India
- Bukit Asam (Persero) Tbk - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
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