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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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Friday, 07 August 20
PEABODY'S $1.42 BILLION WRITE-DOWN CONCEDES COAL MINES HAVE LITTLE VALUE AND DIM FUTURE - IEEFA
Trouble at biggest mine in Powder River Basin speaks volumes about state of industry
Peabody Energy, the world’s largest priva ...
Thursday, 06 August 20
SUPRAMAX MARKET CONTINUED SIDEWAYS TREND, AND LITTLE INSPIRING NEWS APPEAR - FEARNLEYS
Capesize
There is presently a small correction in rates, but overall levels are up from previous week mainly due to increased demand in the Eas ...
Thursday, 06 August 20
KOREA SOUTH-EAST POWER INVITING BIDS FOR MIN 3,600-MAX 3,800 NCV COAL
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) inviting bids for 80,000 Tons (MT) Min 3,600~Max 3,800 kcal/kg NCV coal f ...
Wednesday, 05 August 20
NO NEW MINING LICENSES - A REMINDER TO GOVERNORS IN INDONESIA - SSEK
Indonesia’s acting Director General of Mining and Coal (“DGMC”) has issued a letter to the country’s provincial Governors t ...
Wednesday, 05 August 20
AUGUST 2020 HBA HITTING ITS LOWEST LEVELS IN HISTORY
COALspot.com: The Indonesia Coal Price Reference for the month of August plunged 30.73% YoY, hitting its lowest levels in history and highlighting ...
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- Sarangani Energy Corporation, Philippines
- Malabar Cements Ltd - India
- Riau Bara Harum - Indonesia
- CNBM International Corporation - China
- Sojitz Corporation - Japan
- Borneo Indobara - Indonesia
- ICICI Bank Limited - India
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Eastern Coal Council - USA
- Meralco Power Generation, Philippines
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Indian Oil Corporation Limited
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Anglo American - United Kingdom
- Goldman Sachs - Singapore
- Siam City Cement PLC, Thailand
- Edison Trading Spa - Italy
- Latin American Coal - Colombia
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SMG Consultants - Indonesia
- Thiess Contractors Indonesia
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- Larsen & Toubro Limited - India
- Videocon Industries ltd - India
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- PTC India Limited - India
- Planning Commission, India
- Parliament of New Zealand
- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Directorate Of Revenue Intelligence - India
- Dalmia Cement Bharat India
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Asmin Koalindo Tuhup - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mjunction Services Limited - India
- Indian Energy Exchange, India
- ASAPP Information Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Eastern Energy - Thailand
- Bangladesh Power Developement Board
- Energy Link Ltd, New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- LBH Netherlands Bv - Netherlands
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Miang Besar Coal Terminal - Indonesia
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Merrill Lynch Commodities Europe
- Tamil Nadu electricity Board
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- Alfred C Toepfer International GmbH - Germany
- Energy Development Corp, Philippines
- Singapore Mercantile Exchange
- Chamber of Mines of South Africa
- India Bulls Power Limited - India
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Kartika Selabumi Mining - Indonesia
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Australian Commodity Traders Exchange
- Central Java Power - Indonesia
- White Energy Company Limited
- Sinarmas Energy and Mining - Indonesia
- Petron Corporation, Philippines
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- European Bulk Services B.V. - Netherlands
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Romanian Commodities Exchange
- London Commodity Brokers - England
- Lanco Infratech Ltd - India
- Semirara Mining Corp, Philippines
- Altura Mining Limited, Indonesia
- Bhoruka Overseas - Indonesia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Bhushan Steel Limited - India
- Binh Thuan Hamico - Vietnam
- Indo Tambangraya Megah - Indonesia
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Renaissance Capital - South Africa
- Oldendorff Carriers - Singapore
- Bharathi Cement Corporation - India
- SMC Global Power, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- Minerals Council of Australia
- Global Coal Blending Company Limited - Australia
- PNOC Exploration Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Maheswari Brothers Coal Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Bulk Trading Sa - Switzerland
- Sree Jayajothi Cements Limited - India
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- Electricity Generating Authority of Thailand
- Australian Coal Association
- The State Trading Corporation of India Ltd
- Iligan Light & Power Inc, Philippines
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Medco Energi Mining Internasional
- Barasentosa Lestari - Indonesia
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- Marubeni Corporation - India
- Mintek Dendrill Indonesia
- Deloitte Consulting - India
- Price Waterhouse Coopers - Russia
- Jaiprakash Power Ventures ltd
- Electricity Authority, New Zealand
- Sical Logistics Limited - India
- Interocean Group of Companies - India
- Vijayanagar Sugar Pvt Ltd - India
- PowerSource Philippines DevCo
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- Wilmar Investment Holdings
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Antam Resourcindo - Indonesia
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Wood Mackenzie - Singapore
- Star Paper Mills Limited - India
- Central Electricity Authority - India
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Jindal Steel & Power Ltd - India
- Straits Asia Resources Limited - Singapore
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
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