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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, 25 August 20
INDIA'S IMPORTS FALL AS LOCKDOWNS IMPACT THE POWER AND INDUSTRIAL SECTORS - REPORT
India is the world’s second largest thermal coal consumer and importer, importing an estimated 211 million tonnes of thermal coal in 2019.&nb ...
Monday, 24 August 20
A COMBINATION OF DEVELOPMENTS DROVE THE FALLOFF COAL PRICES - CHIEF ECONOMIST’ OFFICE, AUSTRALIA
China, rising domestic production combined with subdued power demand;
India, a lockdown coupled with government directives that fav ...
Monday, 24 August 20
AUSTRALIA'S THERMAL COAL EXPORTS ARE FORECAST TO DROP FROM AN ESTIMATED $20 BILLION IN 2019-20 TO $16 BILLION IN 2020-21: REPORT
Thermal coal spot prices have fallen sharply as the impact of COVID-19 drives a contraction in seaborne trade for only the second time this century ...
Saturday, 22 August 20
REPORT SEES INDIA’S RELIANCE ON THERMAL POWER DROPPING TO 50% IN 2021, 43% IN 2026 - ET ENERGY | IEEFA
India’s dependence on thermal power will reduce to 50 per cent by 2021-22 and 43 per cent by 2026-27 on the back of renewable energy (RE) cap ...
Friday, 21 August 20
323 MILLION ELECTRIC VEHICLES WILL BE ON THE ROADS BY 2040 - WOOD MACKENZIE
Electric vehicle (EV) sales are expected to reach 45 million units per year by 2040, with a total global EV stock of 323 million, according to new ...
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- Mintek Dendrill Indonesia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Georgia Ports Authority, United States
- Sical Logistics Limited - India
- Indogreen Group - Indonesia
- Meralco Power Generation, Philippines
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Star Paper Mills Limited - India
- GAC Shipping (India) Pvt Ltd
- Sinarmas Energy and Mining - Indonesia
- Price Waterhouse Coopers - Russia
- Coal and Oil Company - UAE
- Indian Oil Corporation Limited
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Authority, New Zealand
- Kartika Selabumi Mining - Indonesia
- TeaM Sual Corporation - Philippines
- Economic Council, Georgia
- The State Trading Corporation of India Ltd
- Coalindo Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Bayan Resources Tbk. - Indonesia
- Romanian Commodities Exchange
- Ind-Barath Power Infra Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Bhatia International Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- The Treasury - Australian Government
- Posco Energy - South Korea
- Cement Manufacturers Association - India
- Billiton Holdings Pty Ltd - Australia
- India Bulls Power Limited - India
- Deloitte Consulting - India
- Chamber of Mines of South Africa
- GVK Power & Infra Limited - India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Aditya Birla Group - India
- Thiess Contractors Indonesia
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kumho Petrochemical, South Korea
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Ministry of Transport, Egypt
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Videocon Industries ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Eastern Coal Council - USA
- Ministry of Mines - Canada
- Electricity Generating Authority of Thailand
- The University of Queensland
- Wood Mackenzie - Singapore
- Indika Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Jindal Steel & Power Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Anglo American - United Kingdom
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Agrawal Coal Company - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Latin American Coal - Colombia
- European Bulk Services B.V. - Netherlands
- Orica Australia Pty. Ltd.
- Medco Energi Mining Internasional
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- PNOC Exploration Corporation - Philippines
- Sindya Power Generating Company Private Ltd
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Directorate Of Revenue Intelligence - India
- Oldendorff Carriers - Singapore
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- Semirara Mining Corp, Philippines
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Maheswari Brothers Coal Limited - India
- Indo Tambangraya Megah - Indonesia
- Samtan Co., Ltd - South Korea
- Wilmar Investment Holdings
- Sarangani Energy Corporation, Philippines
- Dalmia Cement Bharat India
- Kapuas Tunggal Persada - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Goldman Sachs - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Barasentosa Lestari - Indonesia
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- Standard Chartered Bank - UAE
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Independent Power Producers Association of India
- Planning Commission, India
- PTC India Limited - India
- Rashtriya Ispat Nigam Limited - India
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Siam City Cement PLC, Thailand
- Holcim Trading Pte Ltd - Singapore
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Central Java Power - Indonesia
- ICICI Bank Limited - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Tata Chemicals Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Uttam Galva Steels Limited - India
- Siam City Cement - Thailand
- Bhushan Steel Limited - India
- Gujarat Sidhee Cement - India
- Karbindo Abesyapradhi - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- CNBM International Corporation - China
- Marubeni Corporation - India
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Intertek Mineral Services - Indonesia
- Petron Corporation, Philippines
- Tamil Nadu electricity Board
- Antam Resourcindo - Indonesia
- Ambuja Cements Ltd - India
- Binh Thuan Hamico - Vietnam
- Energy Link Ltd, New Zealand
- SMG Consultants - Indonesia
- SMC Global Power, Philippines
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Australian Coal Association
- Salva Resources Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sree Jayajothi Cements Limited - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Indian Energy Exchange, India
- Ministry of Finance - Indonesia
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Makarim & Taira - Indonesia
- Karaikal Port Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- MS Steel International - UAE
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- Vedanta Resources Plc - India
- San Jose City I Power Corp, Philippines
- Vizag Seaport Private Limited - India
- Orica Mining Services - Indonesia
- GMR Energy Limited - India
- Cigading International Bulk Terminal - Indonesia
- Lanco Infratech Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- Mjunction Services Limited - India
- Metalloyd Limited - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Semirara Mining and Power Corporation, Philippines
- Parliament of New Zealand
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