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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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Monday, 02 April 12
BANGLADESH EYEING INDONESIA FOR COAL
COALspot.com - The high level executives of Center for Environmental and Geographic Information Services (CEGIS) of Bangladesh is visiting Ind ...
Monday, 02 April 12
WEEKLY DRY MARKET OVERVIEW - MARIA BERTZELETOU, HELLENIC SHIPPING
The first quarter of the New Year ended with the BDI standing 42% above from the 26 years’ bottom low of 662 points on February 1st, and a pos ...
Saturday, 31 March 12
THE BDI CONTINUED TO MOVE UPWARD - VISTAAR
COALspot.com - The BDI continued to move upward and rose by 2.86 pct closing at 934 points.
The cape index was up by 3.14 pct closing at 1,412 po ...
Saturday, 31 March 12
SRI LANKA IMPORTS 152,555 MT OF INDONESIAN COAL IN FEBRUARY
COALspot.com: Indonesia, the world largest coal exporter, shipped 27.126* million tons of coal in February 2012, compared to 28.21* million to ...
Friday, 30 March 12
RECOND NUMBERS SURROUNDING THE SUPRAMAX DRY BULK MARKET - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Last year proved to be both a record year in the number of deliveries of dry bulkers between 40,000dwt and 64,000dwt, as well as a record year in th ...
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- Asia Pacific Energy Resources Ventures Inc, Philippines
- Barasentosa Lestari - Indonesia
- Georgia Ports Authority, United States
- Mintek Dendrill Indonesia
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- Binh Thuan Hamico - Vietnam
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- European Bulk Services B.V. - Netherlands
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Makarim & Taira - Indonesia
- Vizag Seaport Private Limited - India
- Bangladesh Power Developement Board
- CNBM International Corporation - China
- Chamber of Mines of South Africa
- Parliament of New Zealand
- IHS Mccloskey Coal Group - USA
- Economic Council, Georgia
- Anglo American - United Kingdom
- South Luzon Thermal Energy Corporation
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- MS Steel International - UAE
- Wood Mackenzie - Singapore
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- Energy Development Corp, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Interocean Group of Companies - India
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Coal and Oil Company - UAE
- Deloitte Consulting - India
- PNOC Exploration Corporation - Philippines
- Ministry of Finance - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Planning Commission, India
- Vedanta Resources Plc - India
- Ceylon Electricity Board - Sri Lanka
- Aboitiz Power Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Trasteel International SA, Italy
- Leighton Contractors Pty Ltd - Australia
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Romanian Commodities Exchange
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Global Business Power Corporation, Philippines
- GMR Energy Limited - India
- Sinarmas Energy and Mining - Indonesia
- SMC Global Power, Philippines
- Simpson Spence & Young - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kartika Selabumi Mining - Indonesia
- GVK Power & Infra Limited - India
- Bhushan Steel Limited - India
- Siam City Cement PLC, Thailand
- Malabar Cements Ltd - India
- Dalmia Cement Bharat India
- Edison Trading Spa - Italy
- Jindal Steel & Power Ltd - India
- Indonesian Coal Mining Association
- Gujarat Electricity Regulatory Commission - India
- Salva Resources Pvt Ltd - India
- Tamil Nadu electricity Board
- Thiess Contractors Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Iligan Light & Power Inc, Philippines
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Oldendorff Carriers - Singapore
- Kideco Jaya Agung - Indonesia
- Intertek Mineral Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- McConnell Dowell - Australia
- Bharathi Cement Corporation - India
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Cigading International Bulk Terminal - Indonesia
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- Pipit Mutiara Jaya. PT, Indonesia
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Videocon Industries ltd - India
- Ministry of Transport, Egypt
- Holcim Trading Pte Ltd - Singapore
- Sakthi Sugars Limited - India
- Marubeni Corporation - India
- Petrochimia International Co. Ltd.- Taiwan
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- White Energy Company Limited
- Global Green Power PLC Corporation, Philippines
- London Commodity Brokers - England
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Star Paper Mills Limited - India
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Therma Luzon, Inc, Philippines
- Mercuria Energy - Indonesia
- New Zealand Coal & Carbon
- Ind-Barath Power Infra Limited - India
- Australian Coal Association
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Baramulti Group, Indonesia
- Ministry of Mines - Canada
- Posco Energy - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Grasim Industreis Ltd - India
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- Chettinad Cement Corporation Ltd - India
- Sarangani Energy Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Eastern Energy - Thailand
- Semirara Mining and Power Corporation, Philippines
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Coalindo Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Electricity Generating Authority of Thailand
- Asmin Koalindo Tuhup - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- The State Trading Corporation of India Ltd
- Global Coal Blending Company Limited - Australia
- San Jose City I Power Corp, Philippines
- Uttam Galva Steels Limited - India
- Aditya Birla Group - India
- Ambuja Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Samtan Co., Ltd - South Korea
- LBH Netherlands Bv - Netherlands
- Australian Commodity Traders Exchange
- Commonwealth Bank - Australia
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Sojitz Corporation - Japan
- Heidelberg Cement - Germany
- Kohat Cement Company Ltd. - Pakistan
- Straits Asia Resources Limited - Singapore
- ASAPP Information Group - India
- Central Electricity Authority - India
- Independent Power Producers Association of India
- Indian Energy Exchange, India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Altura Mining Limited, Indonesia
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
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