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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, 17 March 12
THE FREIGHT RATES FOR INDONESIA TO INDIA REMAINED FIRM - VISTAAR SINGAPORE
COALspot.com - The market continued to be firm and all segments were up except for Cape Index which was down by 2.46 pct closing at 1,466 points.
...
Saturday, 17 March 12
INDIAN GOVT FINALIZES DRAFT BILL FOR COAL REGULATOR - PTI
The coal sector would soon get a regulator as the government has finalised a draft bill for the purpose, Coal Minister Sriprakash Jaiswal said Wedne ...
Friday, 16 March 12
THE PACIFIC MARKET IS FIRMING UP - FEARNLEYS AS
Handy
A slightly positive trend was seen last week in the Atlantic. Skaw-Passero deliveries fixed around USD 3k to US Gulf, while US Gulf deliveres ...
Thursday, 15 March 12
RAINS AVERAGE SELLING PRICE OF COAL WENT UP BY 22 % IN 2011
COALspot.com - PT. Resource Alam Indonesia Tbk, an Indonesian CCoW (3rd Generation) holder reported Wednesday a 171 percent increase in net profits ...
Thursday, 15 March 12
RESOURCE ALAM FY11 PROFIT UP 171% - INSIDER STORIES
Insider Stories reported that, coal mining company PT Resource Alam Indonesia Tbk (KKGI) reported a 171.16% jump in net profit last year on the back ...
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- Mercuria Energy - Indonesia
- CIMB Investment Bank - Malaysia
- Timah Investasi Mineral - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Planning Commission, India
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Trasteel International SA, Italy
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Billiton Holdings Pty Ltd - Australia
- Grasim Industreis Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Intertek Mineral Services - Indonesia
- Coalindo Energy - Indonesia
- Singapore Mercantile Exchange
- Ind-Barath Power Infra Limited - India
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Parry Sugars Refinery, India
- Latin American Coal - Colombia
- Banpu Public Company Limited - Thailand
- Makarim & Taira - Indonesia
- Carbofer General Trading SA - India
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Salva Resources Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Savvy Resources Ltd - HongKong
- Price Waterhouse Coopers - Russia
- Australian Commodity Traders Exchange
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Sojitz Corporation - Japan
- Baramulti Group, Indonesia
- Aboitiz Power Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Miang Besar Coal Terminal - Indonesia
- Edison Trading Spa - Italy
- Standard Chartered Bank - UAE
- Deloitte Consulting - India
- Petrochimia International Co. Ltd.- Taiwan
- Sarangani Energy Corporation, Philippines
- Interocean Group of Companies - India
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Bharathi Cement Corporation - India
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Marubeni Corporation - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Larsen & Toubro Limited - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- GN Power Mariveles Coal Plant, Philippines
- Samtan Co., Ltd - South Korea
- OPG Power Generation Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Chettinad Cement Corporation Ltd - India
- Economic Council, Georgia
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Orica Mining Services - Indonesia
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- IEA Clean Coal Centre - UK
- International Coal Ventures Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Central Java Power - Indonesia
- Bangladesh Power Developement Board
- Global Coal Blending Company Limited - Australia
- Antam Resourcindo - Indonesia
- Energy Development Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Aditya Birla Group - India
- Bhatia International Limited - India
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Bhushan Steel Limited - India
- Tata Chemicals Ltd - India
- Kumho Petrochemical, South Korea
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Formosa Plastics Group - Taiwan
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Straits Asia Resources Limited - Singapore
- Kapuas Tunggal Persada - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- GMR Energy Limited - India
- Mercator Lines Limited - India
- Star Paper Mills Limited - India
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Mjunction Services Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Directorate Of Revenue Intelligence - India
- TNB Fuel Sdn Bhd - Malaysia
- Coal and Oil Company - UAE
- Simpson Spence & Young - Indonesia
- White Energy Company Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Ministry of Mines - Canada
- Ambuja Cements Ltd - India
- Thai Mozambique Logistica
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Parliament of New Zealand
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Binh Thuan Hamico - Vietnam
- Merrill Lynch Commodities Europe
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Kohat Cement Company Ltd. - Pakistan
- LBH Netherlands Bv - Netherlands
- Offshore Bulk Terminal Pte Ltd, Singapore
- PTC India Limited - India
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- Attock Cement Pakistan Limited
- Malabar Cements Ltd - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- London Commodity Brokers - England
- Sree Jayajothi Cements Limited - India
- VISA Power Limited - India
- Siam City Cement - Thailand
- India Bulls Power Limited - India
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Pipit Mutiara Jaya. PT, Indonesia
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Ministry of Transport, Egypt
- AsiaOL BioFuels Corp., Philippines
- Sindya Power Generating Company Private Ltd
- Kaltim Prima Coal - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Eastern Coal Council - USA
- Sinarmas Energy and Mining - Indonesia
- Bukit Makmur.PT - Indonesia
- Agrawal Coal Company - India
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Indo Tambangraya Megah - Indonesia
- GVK Power & Infra Limited - India
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