Adaro?s 2010 net profit dips on lower gross profit

Jakarta-listed integrated coal mining conglomerate PT Adaro Energy Tbk reported on Wednesday that its 2010 net earnings dropped by 42 percent to US$243 million due to decline in gross profit and extraordinary demurrage charges.

Consolidated net revenue increased 4.9% to $2.72 billion, attributed to the 4% and 6% increase in production and sales volumes respectively, despite the 3% decline in average selling price.

Cost of revenue increased 22% to $1.87 billion due to higher planned stripping ratio, longer overburden hauling distances and additional weather related costs. As a result, gross profit declined 20% to $851 million, the company reported.

Despite the record-setting high volume of rainfall and number of raindays, Adaro Energy?s production volume increased 4% to 42.2 million tonnes in 2010, with 2.5 million tonnes coming from the new Wara pit, and sales volume increased 6% to 43.84 million tonnes.

Adaro?s average selling price (ASP) in the fourth quarter of 2010 was $58.26 per tonne. As a result, Adaro?s ASP for the full year 2010 slightly decreased 3% over full year 2009 to US$57.18 per tonnes due to the rescheduling of some higher-end priced contracts and quality adjustment to 2011. The rescheduling was a result of unable to produce enough to meet the strong demand, it said.

The company is expecting to produce 46-48 million tonnes this year including 4-5 million tonnes of lower CV Envirocoal-4000 and predicted that EBITDA would be between $1.1 ? 1.3 billion.

Adaro Energy through its subsidiary PT Adaro Indonesia Indonesia?s largest open pit mining in South Kalimantan. (alex)