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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, 27 August 20
BANGLADESH POWER MINISTRY SEEKING AUTHORITY TO CANCEL 13,000 MW OF PROPOSED COAL-FIRED CAPACITY - BUSINESS STANDARD
In a bid to move away from dirty energy, the Ministry of Power, Energy and Mineral Resources is seeking the prime minister’s approval to conv ...
Wednesday, 26 August 20
ASIAN COAL PRICES LIKELY TO REMAIN DEPRESSED SAY TRADERS, ANALYSTS - REUTERS
Asian coal prices, which have fallen around 25% this year as power demand slumped due to the coronavirus outbreak, are unlikely to move higher befo ...
Wednesday, 26 August 20
WORLD COAL EXPORTS: INDONESIAN THERMAL COAL EXPORTS HAVE COME UNDER PRESSURE AS THERMAL COAL PRICES WEAKEN - REPORT
Indonesia’s exports to decline sharply from record highs
Indonesia is the world’s largest thermal coal exporter, sellin ...
Wednesday, 26 August 20
JAPAN'S COAL IMPORTS ARE BEING AFFECTED BY COMPETING INFLUENCES - REPORT
Japan is the world’s third largest thermal coal importer, importing an estimated 135 million tonnes of thermal coal in 2019. The country&rsqu ...
Wednesday, 26 August 20
PENDING SOUTH KOREA LEGISLATION COULD FORCE HALT TO COUNTRY’S COAL PLANT EXPORT DEALS - KOREA ECONOMIC DAILY
South Korea’s parliament looks set to pass new legislation to ban financing on foreign coal power projects, putting all overseas coal-fired p ...
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- White Energy Company Limited
- Sakthi Sugars Limited - India
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Interocean Group of Companies - India
- Central Electricity Authority - India
- Heidelberg Cement - Germany
- Coal and Oil Company - UAE
- Parliament of New Zealand
- Maheswari Brothers Coal Limited - India
- International Coal Ventures Pvt Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Offshore Bulk Terminal Pte Ltd, Singapore
- Siam City Cement - Thailand
- Sinarmas Energy and Mining - Indonesia
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Chamber of Mines of South Africa
- PTC India Limited - India
- Carbofer General Trading SA - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Australian Commodity Traders Exchange
- ICICI Bank Limited - India
- European Bulk Services B.V. - Netherlands
- AsiaOL BioFuels Corp., Philippines
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- Indian Oil Corporation Limited
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- Indonesian Coal Mining Association
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- Bulk Trading Sa - Switzerland
- Posco Energy - South Korea
- Iligan Light & Power Inc, Philippines
- Renaissance Capital - South Africa
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining Corp, Philippines
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Mintek Dendrill Indonesia
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Sical Logistics Limited - India
- Parry Sugars Refinery, India
- Merrill Lynch Commodities Europe
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- Madhucon Powers Ltd - India
- Chettinad Cement Corporation Ltd - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- SMG Consultants - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Minerals Council of Australia
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- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Larsen & Toubro Limited - India
- Salva Resources Pvt Ltd - India
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- GVK Power & Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Mercuria Energy - Indonesia
- Xindia Steels Limited - India
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kartika Selabumi Mining - Indonesia
- Videocon Industries ltd - India
- Price Waterhouse Coopers - Russia
- Kideco Jaya Agung - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- Bukit Makmur.PT - Indonesia
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Borneo Indobara - Indonesia
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- Kaltim Prima Coal - Indonesia
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Sarangani Energy Corporation, Philippines
- IEA Clean Coal Centre - UK
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Bukit Asam (Persero) Tbk - Indonesia
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- Global Green Power PLC Corporation, Philippines
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Grasim Industreis Ltd - India
- New Zealand Coal & Carbon
- Indika Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- Commonwealth Bank - Australia
- Global Coal Blending Company Limited - Australia
- Karaikal Port Pvt Ltd - India
- Mjunction Services Limited - India
- The University of Queensland
- London Commodity Brokers - England
- Baramulti Group, Indonesia
- Globalindo Alam Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Meenaskhi Energy Private Limited - India
- Orica Mining Services - Indonesia
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Georgia Ports Authority, United States
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Finance - Indonesia
- Aditya Birla Group - India
- Deloitte Consulting - India
- Directorate Of Revenue Intelligence - India
- TeaM Sual Corporation - Philippines
- Eastern Energy - Thailand
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Savvy Resources Ltd - HongKong
- India Bulls Power Limited - India
- Kobexindo Tractors - Indoneisa
- Economic Council, Georgia
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Siam City Cement PLC, Thailand
- Barasentosa Lestari - Indonesia
- Energy Link Ltd, New Zealand
- GMR Energy Limited - India
- Indogreen Group - Indonesia
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- Jindal Steel & Power Ltd - India
- Gujarat Sidhee Cement - India
- Meralco Power Generation, Philippines
- Cement Manufacturers Association - India
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Coalindo Energy - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- MS Steel International - UAE
- Attock Cement Pakistan Limited
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ceylon Electricity Board - Sri Lanka
- Alfred C Toepfer International GmbH - Germany
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Bhushan Steel Limited - India
- Indo Tambangraya Megah - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- Bukit Baiduri Energy - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Antam Resourcindo - Indonesia
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Port Waratah Coal Services - Australia
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