Geo Energy reports 14% increase in first-half net profit
Tuesday, August 13 2013 - 02:07 AM WIB
SGX-listed mining group Geo Energy Resources Limited, which operates in Indonesia, said Monday that net profit in the first half of this year increased by 14 percent to US$10.4 million compared to the same period of last year.
The company said that revenue in the six months ended June 30 increased by 11 percent to $50 million.
The group benefited from an increase in coal production and sales from its coal mining subsidiary PT Bumi Enggang Khatulistiwa (BEK), coupled with an increase in equipment rental income in first-half of this year, the company said.
In addition, the group's new businesses, namely mining services and coal trading, also registered additional revenue.
The aforementioned was partially offset by the termination of the group's coal cooperation contracts and the decrease in the average selling price (ASP) from $62.2 per ton in HY2012 to U.S. $ 34.7 per ton in HY2013, Geo Energy said.
The decrease in ASP was mainly due to the lower average calorific value of coal produced from the BEK mining concession as compared to coal sales under the previous coal cooperation contracts.
The group?s ASP increased by $21.0 per ton from $22.9 per ton in 1Q2013 to US$43.9 per tonne in 2Q2013 due mainly to the higher average calorific value of coal sold under its coal trading segment.
The statement said that group will 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.
In addition to the mining services contracts as well as coal sale and purchase contracts recently secured and announced in the past three months, the group intends to continue to enter into suitable coal mining arrangements with other third party sources to gain access to new concession areas in order to expand its operations, it added.
Since the beginning of 2013, the group has entered into conditional sale and purchase agreements to purchase five mining concessions in Kutai Barat Regency, East Kalimantan, located in close proximity to the group?s current BEK mine, allowing the group to synergise its upcoming operations.
?Though coal prices are expected to remain relatively soft in the near future due to the growth in supply of coal, we note market expectations that demand from countries like China and India will continue to remain strong. Geo Energy is also in an advantageous position with our full suite of in-house mining capabilities and relatively low gearing position vis-?-vis some of our other counterparts in the coal mining industry,? said Executive Chairman of Geo Energy Charles Antonny Melati on the group?s long-term growth strategy.
Editing by Reiner Simanjuntak