Geo Energy books 13% profit growth in Indonesia
Wednesday, November 13 2013 - 12:57 PM WIB
SGX-listed Geo Energy Resources Limited an Indonesian coal mining specialist listed in Singapore, announced on Wednesday a 43 percent growth in revenue, from US$59.2 million in the first nine months of 2012 to $84.7 million in the corresponding period of this year.
The growth in revenue translated into a 13 percent increase in net profit to $13.9 million, despite the current challenging coal price environment, the firm said in a statement filed with the Singapore Stock Exchange.
The 43 percent increase in revenue was due mainly to the following factors; (i) increase in coal sales from the mining concession in West Kutai, East Kalimantan owned by PT Bumi Enggang Khatulistiwa (BEK) as a result of production ramp-up, (ii) additional revenue contribution from mining services and coal trading and (iii) growth in revenue from equipment rental.
The increase in revenue though, was partially offset by the termination of Geo Energy?s coal cooperation contracts and the decrease in average selling price (ASP) from $56.2 per ton in the first nine months of 2012 to $39.9 per ton in the corresponding period of this year.
However, in the third quarter ended Sept. 30, 2013, the firm?s ASP has actually increased by $6.3 per ton from $42.9 per ton in the third quarter of 2012 to $49.2 per ton in the third quarter of 2013. This higher ASP can be attributed to the firm?s coal trading business, as the underlying average calorific value of the coal was higher than that of the coal produced in the its prior coal cooperation contracts (CCC).
Commenting on the Group?s performance, Mr. Charles Antonny Melati, Executive Chairman of Geo Energy Group said, ?The first nine months of the year has shown that Geo Energy is fully capable of delivering on its production targets. Our operational excellence has shone through as the Group has continued to deliver steady growth in profits despite the current challenging conditions that coal prices have continued to flounder in,? Charles Antonny Melati, Executive Chairman of Geo Energy Group said.
As part of its plans to further increase and diversify its revenue streams, it recently announced that it had secured another mining services agreement, its second such agreement for the year. This new mining services agreement also represents a significant shift in the capabilities of Geo Energy, as it gradually begins to handle a larger quantity of higher calorific coal as compared to the current lower calorific coal produced in its own BEK mine. This shift will continue Geo Energy?s transformation into a value-added coal mining organization with a full range of services and capabilities, the firm said.
?With the two mining services agreements in place, the Group will be able to increase and diversify its revenue streams, allowing it greater flexibility over its productions and operations while easing any possible overdependence on the operations of the BEK mine.
?The Group will also continue to look out for business expansion opportunities, which may include acquisitions, joint ventures and/or strategic alliances, to expand its business operations and increase its coal production levels,? the firm said.
Editing by Johannes Simbolon