DSSA sees higher revenue in 2017 on coal recovery, starts power plant construction
Wednesday, December 14 2016 - 01:49 AM WIB
IDX-listed coal mining and power plant firm PT Dian Swastatika Sentosa Tbk (DSSA) expected higher revenue next year on recovery in the price of coal and higher revenue from new power plant.
The company is also seeking to start construction of another power plant project next year, and to grab a new project.
?Revenue is projected to reach US$750 million next year,? said Hermawan Tarjono, Director and Corporate Secretary of DSSA on Tuesday. Revenue this year is estimated at around $600 million.
DSSA through subsidiary IDX-listed coal firm PT Golden Energy Mines Tbk, operates mines in Kalimantan and Sumatra. Hermawan said that revenue from coal is projected to account for up to 65 percent of total revenue next year.
?It is expected there will be an increase in sales because of coal price recovery. And then, electricity (production) from PLTU Sumsel-5 (coal-fired power plant next year will start full operation,? Hermawan said.
The 2x150 MW Sumsel-5 coal-fired power plant in Musi Banyuasin, South Sumatra, currently runs at less than 50 percent of capacity.
Elsewhere, Hermawan said that DSSA will allocate US$100 million of its planned $150 million capital expenditure next year to help finance the construction of two other coal-fired power plant projects, namely the 2x50 MW Kendari III power plant project in Southeast Sulawesi, and the 2x100 MW Kalteng I power plant project in Central Kalimantan. The remaining capex will be allocated for coal business, trading, and multimedia.
DSSA through indirect subsidiary PT DSSP Power started in September construction of the estimated $200 million Kendari III project, which has been targeted to be completed in three years. China Development Bank Corporation provided $150 million loan for the project. Jiangxi Jianglian International Engineering Co Ltd has been appointed as the EPC contractor for the project.
DSSP signed in May of last year a power purchase agreement with state-owned electricity firm PT PLN for the plant to supply power to the later for 25 years.
Construction of the Kalteng I power plant project is targeted to start at the end of 2017 or early 2018. The company has signed financial close for the estimated $337 million project, of which $260 million will come from loans. Dongfang Electric Corporation has been appointed as the EPC contractor.
Elsewhere, Hermawan said that DSSA is also seeking to grab a new power plant project next year by participating in a tender to be held by state-owned power firm PT PLN. He added there?s also possibility for the company to acquire an operating power plant as part of expansion strategy in the power plant business.
He said that the power plant business is projected to account for up to 25 percent of total consolidated revenue over the next five years. DSSA currently operates a combined 900 MW power plants including power captive power plants for internal use in Serang, Tangerang, and Karawang.
In the three months period of this year, DSSA saw revenue increased by 21 percent to $435.9 million compared to the corresponding period of last year. Meanwhile, net profit jumped by 105 percent to $1.41 million in the January-September period of this year compared to the same period of last year. Coal mining accounted for 64 percent of the total revenue, while chemical trading 21 percent, power plant 11 percent, multimedia 2 percent, and the remaining is contributed by other businesses.
Editing by Reiner Simanjuntak