Adaro?s revenue up 24% on higher coal price
Saturday, April 29 2017 - 07:38 AM WIB
Courtesy of Adaro
IDX-listed coal giant PT Adaro Energy Tbk said that revenue in the first quarter of this year increased by 24 percent to US$727 million compared to revenue in the same period of last year, thanks primarily to higher selling price of coal.
The company said in a statement Friday that core earnings during the period rose 63 percent to $132 million, reflecting the strength of its after-tax earnings derived from core operations.
Adaro said its average selling price increased by 39 percent compared to the same period last year as coal market conditions improved this year.
Coal production in the January-March 2017 period, however, was lower at 11.86 million tons, compared to output in the corresponding period of last year at 12.64 million tons. Adaro said that it remains on track to achieve its 2017 production guidance of 52-54 million tons.
?We recorded better profitability on the back of higher coal prices conditions and continuous efficiency with operational EBITDA of $276 million, up by 44 percent. We are on track to achieve our operational EBITDA guidance of $900 million to $1,100 million, as we will continue to operate in an efficient manner and pursue the highest standard of excellence,? the company said in the statement.
Adaro said cost of revenue went up by 18 percent to $509 million due to higher strip ratio and fuel prices year over year. At the same time, the company continued to sustain drive for efficiency and operational excellence along its vertically integrated supply chain. Strip ratio for the period was 4.62x, slightly lower than company guidance of 4.85x for 2017 due to high levels of rainfall.
The company said it has hedged approximately 50 percent of its fuel requirements for the rest of 2017 at prices below its budget to mitigate risks associated with oil price fluctuations.
Due to the higher revenue, the royalties to the Government of Indonesia that accounted for 15 percent of the total cost of revenue in the first quarter of 2017 grew 26 percent to $75 million.
Total assets were up by 9 percent to $6.51 billion. Current assets increased by 42 percent to $1.65 billion, mainly due to higher cash balance as a result of strong operating cash flows. Noncurrent assets increased by 1 percent to $4.86 billion.
Total liabilities increased 6 percent to $2.69 billion on the back of higher current liabilities and lower non-current liabilities. Current liabilities increased by 54 percent to $665 million. Non-current liabilities declined by 3 percent to $2.03 billion essentially due to lower long-term bank loans as we made regular payments, enhancing Adaro?s capital structure. As a result, long-term bank loans decreased by 10 percent to $1.20 billion. ?Our balance sheet continued to improve over time with net debt to last 12 months operational EBITDA of 0.31x and net debt to equity of 0.08x.?
Adaro said capital expenditure during the first quarter of this year decreased 36 percent to $9 million. The company remains in free cash flow positive of $182 million driven by strong generation of operational EBITDA and efficient capital spending.
?We remain cautiously optimistic with the dynamics in the coal market. Amidst the volatile condition, we continue to promote operational excellence and focus on efficiency and productivity across our three pillars of growth. We generated a solid Operational EBITDA and maintained a strong liquidity, ensuring business sustainability. Adaro Energy?s good start to the year demonstrated the strength of our vertically integrated business model and we are well positioned for the challenges and opportunities that lie ahead?.
Editing by Reiner Simanjuntak