GEAR swings back to profit
Wednesday, March 1 2017 - 01:21 AM WIB
SGX-listed coal firm Golden Energy and Resources Limited (GEAR) swung back to record a net profit of US$33.7 million in the financial year ended December 31, 2016 (FY2016), compared to a net loss of $8.7 million in FY2015.
The company said in a statement on Tuesday that FY2016 is the first year in which GEAR had accounted for the complete year?s financial performance of IDX-listed coal firm PT Golden Energy Mines Tbk (GEMS), which it had acquired in April 2015.
The company said the surge in GEAR?s profitability in FY2016 was driven by broad-based growth in revenue contribution across the group?s business divisions, particularly within the coal mining division, which recorded higher sales volume compared to FY2015 on the back of an increase in the average realized selling price from $32.89 per metric ton in the fourth quarter of 2015 (4Q2015) to $38.68 per metric ton in 4Q2016.
Fuganto Widjaja, Executive Director and Group CEO of GEAR, said, ?We are heartened by the strength of revenue growth in the coal mining division, our group?s key revenue contributor. This serves as an affirmation of our operational strategy to ramp up our coal production in view of the persisting strong demand for coal in Indonesia and abroad, and this has culminated in a robust set of results for GEAR in FY2016.?
?With GEAR in a net cash position, we are poised for strong organic growth in production from our coal mines, as well as to look at additional strategic acquisitions which would be earnings accretive to the group?, Widjaja added.
For FY2016, GEAR achieved revenue of $393.3 million, up 9.3 percent from $359.8 million a year ago. The increase in revenue was backed by higher sales volume in the group?s coal mining division, which recorded a 9.7 percent increase in revenue for the segment to $329.5 million from $300.4 million in FY2015. Correspondingly, gross profit grew 29.0 percent to $144.1 million in FY2016 from $111.7 million in the previous corresponding period.
In the year under review, GEAR?s finance cost remained relatively stable and the group ended the year with a healthy cash position of $79.0 million, resulting GEAR to be in a net cash position with only $49.7 million of outstanding bank loans.
As at August 31, 2016, GEAR?s coal business, which is held by the GEMS, is valued at $3.1 billion in an independent business valuation report by Jones Lang LaSalle Corporate Appraisal and Advisory Limited, taking into account the group?s coal resources estimates of 2,154 million tons (MT). GEAR holds a 66.9998 percent equity interest in GEMS.
As at December 31, 2016, the group has aggregate coal resources estimates of 2,331 MT across its concessions.
In FY2016, GEAR achieved a total coal production volume of 9.5 MT. Of which, approximately 7.5 MT were mined from the group?s largest concession PT Borneo Indobara (BIB), successfully reaching the maximum output limit approved by the Indonesian Government in September 2016.
Editing by Reiner Simanjuntak