Agritrade sees 487.8% annual revenue growth for coal

By Peni Pedriawan

Hongkong listed Agritrade Resources Limited recently stated its revenue has gone up by 143.7 percent year on year to HK$527.9 million, boosted by sharpening focus on growing coal mining business.

The company, has since 2010 acquired and operated a 2,000-hectare coal mine in Central Kalimantan previously secured by PT Senamas Energindo Mineral (SEM). It now produces its own brand of SEM coal, a sub-bituminous, low-sulphur, low-pollutant thermal coal with calorific value of 3,700 kcal/kg (ADB).

Currently, 600 Ha of the 2,000 Ha mining concession has been explored under the Australasian JORC (Joint Ore Reserves Committee) review by Minarco-MineConsult with an estimation of at least 100 million tons of reserves for the entire 2,000 Ha mining concession.

As a business segment, Agritrade?s coal mining business generated a 487.8 percent increase in revenue from HK$72.7 million in FY2011 to HK$427.2 million in FY2012. Coal production has increased exponentially since operations commenced in February of 2010, with production capacity increasing five-fold from 300,400 tons in FY2011 to 1.58 million tons in FY2012.

"We are witnessing the beginning of our efforts to sharpen our business focus as a coal mining company, as we embark on our three-pronged strategy of capacity expansion, market expansion, and continuous R&D to add value to our coal and operations. We are fully committed to driving an even better performance and enhancing long term returns to our shareholders,? Rashid Maidin, Chief Executive Officer of Agritrade Resources Limited said in a statement submitted to the Hong Kong Stock Exchange.

Agritrade is said to apply three-pronged strategy to realize its long term growth aspirations, including to increase its production and reserves capacity by further exploring the remaining 1,400-hectares of its mine concession, while remaining on the lookout for opportunities to acquire other commercially viable coal assets in Indonesia.

Its second strategy is to expand its market base to cover more Indonesian market while continuing to strengthen its base of international customers with a view on further extending its reach to fast-growing markets, such as China and India, to tap on growing global coal demand.

The Company has started building its own coal upgrading facility and is currently applying the use of GEO-COAL? technology, which will process and upgrade SEM coal to a higher rank coal with increased calorific value, lower moisture levels and enhanced profit margin. This coal upgrading facility will have a processing capacity of 500,000 tons of upgraded SEM coal per annum, and is expected to be completed and commissioned commercially by 2013.

"On the back of higher revenue, gross profit registered a year-on-year increase from HK$16.5 million to HK$103.7 million in FY2012. Gross profit margin rose 12 percentage points year-on-year to 19.6 percent in FY2012, enabled by economies of scale from an increase in coal production," the company said.

Editing by Audy Zandri