Adaro Q3 coal output up 2%
Friday, October 31 2014 - 01:06 AM WIB
In an already oversupply global coal market that has undermined price, IDX-listed coal giant PT Adaro Energy Tbk reported that coal production in the third quarter of this year increased by 2 percent to 14.03 million tons compared to the corresponding period of last year.
The third quarter production sent the nine-month production to 41.90 million tons, putting the company on track to meet production guidance of 54-56 million tons for this year.
?This increase was mainly due to a combination of sound contractors? performance and good weather conditions,? Adaro said in the third quarter report published Thursday.
Adaro said it sold 14.13 million tons of coal during the third quarter as it continued to see solid demand for its coal. At the end of the nine-month period of this year, coal sold totaled 42.37 million tons.
?We are also pleased with the progress of Balangan?s operations. We produced 0.47 million tons of Balangan Coal, and sold 0.33 million tons to customers in India and Thailand during the quarter. This coal has similar low pollutant characteristics as our Envirocoal,? the company said.
?As this coal continued to receive interest from a range of customers, we plan to produce up to 1 million tons of Balangan Coal for this year,? it added.
Adaro said overburden removal increased by 13 percent to 92.15 million bank cubic meter (Mbcm). Adaro Indonesia?s actual strip ratio during the third quarter was 6.67x, resulting in actual strip ratio of 5.79x for the nine-month period, which is in line with the target of 5.78x for the year.
?We are able to maintain our strip ratio at a relatively flat level for two years in a row without harming our long-term mine plan due to the investment we made to increase overburden removal during higher coal price environment. Furthermore, the lower average planned strip ratio remained higher than the life of mine strip ratio.?
Despite the continued weakness in coal price, Adaro claimed it is doing relatively well and remains on track to achieve this year?s guidance and long-term objectives of creating maximum sustainability value from Indonesian coal. ?We put greater focus on cost reduction, improving efficiency and productivity on each part of our coal supply chain,? it said.
Meanwhile, Adaro Energy said that revenue in the third quarter increased by 3 percent to US$2,507 million year-on-year due to higher sales volume of 8 percent, while our average selling price (ASP) declined 5 percent. ?Our cost of revenue was relatively flat at US$1,921 million, which translated to an 11 percent increase in EBITDA to US$701 million,? the company said.
Nine-month operational EBITDA, which excludes non-operational accounting items, increased 11 percent to US$701 million compared to the same nine-month period of last year. Operational EBITDA excluded a one-time gain from the sale of a 35 percent interest in PT Servo Meda Sejahtera (SMS) and an expense related to a prior tax assessment for fiscal year 2012, it said.
?Our net income for nine-month 2014 decreased 29 percent to US$225 million mainly due to the inclusion of a gain from the Balangan acquisition in 2013,? Adaro said. ?Our core earnings, which exclude non operational accounting items, rose by 36 percent to US$291 million.?
Elsewhere, Adaro said coal cash cost (excluding royalty) was lowered by 8 percent to US$32.65 per ton in the nine-month period of this year, mostly due to cost reduction initiatives, while overburden volumes increased 8 percent.
Editing by Reiner Simanjuntak