Bumi?s operating performance hampered by heavy rains

Petromindo

IDX-listed coal giant PT Bumi Resources Tbk said that operating performance in the first half of this year was hampered by the unusually heavy rains during the period.

The company reported on Wednesday that coal production in the January-June period of this year only increased by 0.9 percent to 40.2 million tons compared to the corresponding period of last year. Meanwhile, first-half sales volume was also relatively flat at 41.5 million tons. The company hopes to boost sales in the second half of the year as rains subside.

These first-semester 2017 operating metrics were on full consolidation basis, taking into account 100 percent of coal subsidiaries PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia.

The company said it has actually reported its first-half 2017 performance based on PSAK 66 of IAI on Joint Venture Agreements and, hence, does not consolidate KPC and Arutmin. The 51 percent KPC and 70 percent Arutmin stakes that Bumi holds is equity accounted.

Bumi said that combined strip ratio in the first six months of this year (1H17) was reduced by 4.5 percent to 7.2x compared with first-half 2016.

The company, however, said that coal price increased to US$54.8/ton in 1H17 compared with $39.8/ton in 1H16 ? or an increase by 37.6 percent. In 2Q17 the realized coal price was $55.8/ton compared with $39.7/ton in 1H16 or an increase by 40.3 percent. ?There is indication of continuing rise in coal price presently this augurs well for prospects of the company for rest of the year,? Bumi said in the statement.

Bumi said the increase in coal price by $15/ton year-on-year resulted in sales revenue of $2,344 million in 1H17 (full consolidation basis), several times year-on-year. Consolidated net income is $248.1 million in 1H17

Net Income (after adjustment for non-controlling interest) is $162.3 million compared with loss of $20.8 million in 1H16, or a positive profit swing by $183.1 million, Bumi said.

The company said it has been able to increase inventory since end 2016 and expects to improve output and shipments in 2H17 as rains subside and the additional efficiency measures taken.

?For the present there is no change in guidance of 5 percent increase in coal mined and minimum 30 percent increase in coal price compared with FY16,? Bumi said.

Bumi late last month finally completed its rights issue and mandatory convertible bond (MCB) programs, reducing its debts to $1.6 billion from $4.2 billion previously.

Editing by Reiner Simanjuntak