Adaro Energy?s net income surges 96.5%

Coal giant PT Adaro Energy almost doubled its consolidated nine-month net income from a year earlier to record-high US$376 million, thanks to production growth and higher selling prices.

A media statement reveals that as of September this year, net revenue rose 48% year-on-year to US$2.9 billion, while gross profit margins improved to 34.4% from 31.8%. The record net income pushed up earnings per share by 97% to US$0.01176.

Our record nine month performance demonstrates our commitment to our core operations. We delivered strong production growth, while maintaining our robust profit margins. We remain on track to reach our full-year production target of 46-48 million tonnes and our profitability goals, said President Director Garibaldi Thohir.

Quarterly production hit record levels during the third quarter of 2011 due to favorable weather conditions, as well as the arrival of new and larger sized heavy equipments. Production and sales volume for the first nine months of the year increased 10.8% and 18.4% year over year to 35.28 million tonnes and 38.33 million tonnes, respectively.

Another contributing factor to the company?s robust income growth is the average selling price which climbed 25% year-on-year due to higher thermal coal prices and more index linked contracts. Total group cash cost (excluding royalty) increased 20.3% to US$41.30 per tonne because of a higher planned strip ratio, longer overburden hauling distances and rising fuel costs.

In addition to higher production and selling price, the rise in net income was also supported by a foreign exchange gain of US$9.0 million. Net income includes payments to the government for taxes and royalties of US$288.3 million and US$281.8 million, respectively.

EBITDA climbed 49% to a record US$1.0 billion with an EBITDA margin of 35.8%, on track to meet full-year EBITDA projection of US$1.1 to US$1.3 billion.

On August 19, 2011, Adaro acquired a 75% stake in PT Mustika Indah Permai for US$222.5 million for a greenfield coal project in South Sumatra.? A portion of the company?s revolving credit facility was used to finance this transaction, increasing net debt to equity to 0.61x and net debt to EBITDA to 1.01x.

Liquidity remains strong with access to cash of more than US$1.4 billion (including US$850 million of unutilized committed bank facilities) as of September. (romel)