Adaro to lower output this year

IDX-listed coal giant PT Adaro Energy Tbk projected coal production this year to decline to 50 million ? 52 million tons, compared to the estimated 53 million-54 million tons for 2015, President Director Garibaldi Tohir said.

He was quoted by Kontan as saying that the lower production was due to the lingering coal price downturn.

He added that in the meantime, the company will continue diversification into coal-fired power plant development.

Garibaldi said that Adaro?s net profit will be flat in 2015 and 2016.

The company currently has two coal-fired power plant projects which are expected to enter financial closing stage. The company through a consortium called PT Bhimasena Power Indonesia is planning to develop a 2x1,000 MW coal-fired power plant in Batang, Central Java, with estimated investment of US$4 billion.

Adaro through PT Tanjung Power Indonesia will also develop a 2x100 MW coal-fired power plant in South Kalimantan worth $550 million.

Garibaldi said that over the next four-five years, the company?s source of revenue will be diversified from the current structure, in which 60 percent is contributed by coal, 30 percent logistics business, and power sector 10 percent. Going forward, each is projected to contribute about a third to total revenue. (*)