Geo Energy reports record revenue
Tuesday, November 14 2017 - 01:10 AM WIB
SGX-listed coal firm Geo Energy Resources Limited achieved its highest revenue to-date since its listing in 2012, as revenue from continuing operations surged to US$223.5 million in the first nine-month of this year (9M2017) from $90.1 million in 9M2016.
The company said in a statement on Monday this was mainly due to higher revenue contribution from its coal mining as well as additional revenue streams deriving from its coal mining management services and coal trading businesses.
Geo Energy?s gross profit more than tripled (+ 325%) from $14.2 million in 9M2016 to $60.5 million in 9M2017. Excluding non-cash depreciation and amortization of $12.0 million, the group generated cash profits of $72.5 million where its coal mining segment substantially contributed 98.7 percent of the cash profits.
The group?s cash profit per ton almost doubled from $6.51 per ton in 9M2016 to $12.86 per ton in 9M2017 as a result of the Indonesian Coal Price Index (ICI) for 4,200 GAR CV coal trading above $40 per ton for the most part of 9M2017.
The group recorded other income of $7.1 million in 9M2016 because of a one-off gain on the disposal of subsidiaries and late payment interest charged to certain debtors during the period.
General and administrative expenses increased from $4.7 million in 9M2016 to $7.8 million in 9M2017 as the group incurred higher staff costs due to expanding operations and bank fees relating to processing ?Letters of Credits? from buyers and to a subsidiary for coal sales in the normal course of business.
The group managed to lower its finance costs by 16 percent from $4.6 million in 9M2016 to $3.9 million, mainly attributed to lower amortised borrowing costs on the MTN payable. The group has recently completed the redemption on 13 October 2017 of its existing MTN due in January 2018, following the successful issuance of a $300 million 8 percent unsecured senior note due 2022 (?US$ Note?) on 4 October 2017.
The group incurred other expenses of $2.5 million in 9M2017 mainly due to forex loss on the monetary assets (mostly intercompany receivables) held by the company, which are denominated in US$, following the appreciation of S$ against the US$.
Overall, the group registered a 344 percent jump in profit attributable to shareholders from $7.5 million in 9M2016 to $33.2 million for 9M2017.
Following the successful issuance of Geo Energy?s $300 million US$ notes, which was more than three times oversubscribed, Geo Energy said it is exploring for acquisition and investments opportunities in Indonesia and the region to grow the group?s revenue base further, to replenish its coal reserves, diversifying its geographical spread and to move up its calorific value grade of coal for sale. Presently, only the group?s PT Sungai Danau Jaya (SDJ) coal mine is in operation.
The group has received offers to offtake its coal and is in final discussions with various off takers to kick-start coal production at its PT Tanah Bumbu Resources (TBR) coal mine as soon as 1Q2018. Based on the Joint Ore Reserves Committee (JORC) report prepared by SMG Consultants, the combined mineable coal reserves of SDJ and TBR stood at 85.2 million tons as at 19 May 2017.
Commenting on the improved financial results and the positive outlook of the group, Tung Kum Hon, Chief Executive Officer of Geo Energy said, ?This was a good quarter for production, although coal shipments were impacted by an acceleration in jetty, hauling road and river dredging maintenance programs following poor weather in 2Q2017. As a result of adverse weather conditions in 2Q2017 and part of 3Q2017, and the delay in the start of production of the TBR mine, our group has now revised our coal production and sales target for 2017 to between 7 to 8 million tons of coal. The group had earlier projected a total sale of 10 million tons of coal from the production of the SDJ and TBR mines in 2017.?
Editing by Reiner Simanjuntak