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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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Wednesday, 12 August 20
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Wednesday, 12 August 20
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EIA expec ...
Tuesday, 11 August 20
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Monday, 10 August 20
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Saturday, 08 August 20
GLOBAL COAL POWER PUZZLE - BALTIC EXCHANGE
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Economic Council, Georgia
- Indian Energy Exchange, India
- Gujarat Mineral Development Corp Ltd - India
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Sarangani Energy Corporation, Philippines
- Antam Resourcindo - Indonesia
- Heidelberg Cement - Germany
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Tamil Nadu electricity Board
- Kohat Cement Company Ltd. - Pakistan
- Merrill Lynch Commodities Europe
- Xindia Steels Limited - India
- Agrawal Coal Company - India
- Global Coal Blending Company Limited - Australia
- Posco Energy - South Korea
- Borneo Indobara - Indonesia
- Indonesian Coal Mining Association
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Sakthi Sugars Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Ind-Barath Power Infra Limited - India
- Petron Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Trasteel International SA, Italy
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Gujarat Sidhee Cement - India
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- PetroVietnam Power Coal Import and Supply Company
- Bangladesh Power Developement Board
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- Kaltim Prima Coal - Indonesia
- IHS Mccloskey Coal Group - USA
- Vedanta Resources Plc - India
- Marubeni Corporation - India
- Ambuja Cements Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Coastal Gujarat Power Limited - India
- Salva Resources Pvt Ltd - India
- OPG Power Generation Pvt Ltd - India
- Thiess Contractors Indonesia
- PTC India Limited - India
- Sinarmas Energy and Mining - Indonesia
- Orica Australia Pty. Ltd.
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Bulk Trading Sa - Switzerland
- Banpu Public Company Limited - Thailand
- PowerSource Philippines DevCo
- Pipit Mutiara Jaya. PT, Indonesia
- South Luzon Thermal Energy Corporation
- Altura Mining Limited, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- Malabar Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Power Finance Corporation Ltd., India
- Iligan Light & Power Inc, Philippines
- Commonwealth Bank - Australia
- Miang Besar Coal Terminal - Indonesia
- Makarim & Taira - Indonesia
- Bhoruka Overseas - Indonesia
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- GVK Power & Infra Limited - India
- Jaiprakash Power Ventures ltd
- London Commodity Brokers - England
- GMR Energy Limited - India
- Videocon Industries ltd - India
- Globalindo Alam Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Alfred C Toepfer International GmbH - Germany
- Parry Sugars Refinery, India
- Kideco Jaya Agung - Indonesia
- Madhucon Powers Ltd - India
- Deloitte Consulting - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Indogreen Group - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bharathi Cement Corporation - India
- Kumho Petrochemical, South Korea
- Georgia Ports Authority, United States
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Sical Logistics Limited - India
- Bayan Resources Tbk. - Indonesia
- Chamber of Mines of South Africa
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Independent Power Producers Association of India
- Gujarat Electricity Regulatory Commission - India
- Aditya Birla Group - India
- Goldman Sachs - Singapore
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Planning Commission, India
- Port Waratah Coal Services - Australia
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Medco Energi Mining Internasional
- MS Steel International - UAE
- IEA Clean Coal Centre - UK
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- PNOC Exploration Corporation - Philippines
- Australian Commodity Traders Exchange
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- Bukit Baiduri Energy - Indonesia
- The State Trading Corporation of India Ltd
- Coal and Oil Company - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Interocean Group of Companies - India
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Billiton Holdings Pty Ltd - Australia
- Minerals Council of Australia
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Anglo American - United Kingdom
- Carbofer General Trading SA - India
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Indian Oil Corporation Limited
- White Energy Company Limited
- Parliament of New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Simpson Spence & Young - Indonesia
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Renaissance Capital - South Africa
- Riau Bara Harum - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- McConnell Dowell - Australia
- Karaikal Port Pvt Ltd - India
- International Coal Ventures Pvt Ltd - India
- Vizag Seaport Private Limited - India
- Uttam Galva Steels Limited - India
- Manunggal Multi Energi - Indonesia
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