Geo Energy?s quarter net profit up 20%, revenue down 8%
Tuesday, May 14 2013 - 01:03 AM WIB
SGX-listed Geo Energy Resources Limited, an Indonesian based coal mining specialist, recently announced on Monday it has posted a 20% increase in its net profit after tax to US$5.1 million for its first quarter ended 31 March 2013, despite seeing a 8% dip in revenue.
Revenue from the group?s activities in coal sales, mining services and equipment rental, totaled US$17.8 million in the quarter, a dip of 8% from US$19.3 million in the same quarter last year, is mainly due to the termination of coal cooperation contracts and decrease in average selling price (ASP) by US$47.5 per ton from US$70.4 per ton in 1Q-2012 to US$22.9 per ton in 1Q-2013.
"The decrease in ASP was mainly due to the lower average calorific value of coal produced from our PT Bumi Enggang Khatulistiwa (BEK) mining concession as compared to coal sales under our coal cooperation contracts in 1Q-2012, which commanded a higher ASP due to the presence of higher calorific value coal," the group said in a statement to the exchange, adding that the group decided to increase coal sales and production volumes from BEK because of it.
The Group?s gross profit grew to US$9.7 million in 1Q-2013, an increase of US$2.1 million from US$7.6 million in 1Q-2012. The increase in gross profit was mainly due to increases in revenue from BEK mining concession, mining services and equipment rental, although this was partially offset by the termination of coal cooperation contracts; and changes in fair value in respect of the inventories held for coal trading.
Despite the lower revenue, the group enjoyed a better gross profit margin of 54.9%, an increase of 15.2 percentage points from 39.7% in 1Q-2012.
"This was due to an increase in production volume by 0.2 million tonnes from 0.3 million tonnes in 1Q-2012 to 0.5 million tonnes in 1Q-2013, while production costs decreased as our average strip ratio decreased from 11.7 in 1Q-2012 to 3.6 in 1Q-2013," it said.
In line with the increase in gross profit, the group?s net profit grew by 20% to US$5.1 million in 1Q-2013 from US$4.3 million in 1Q-2012.
?This is a positive set of results for the Group to begin FY2013. With better profit margins despite the lower average selling price of coal, we are optimistic that our planned increase in production capacity will increase our production volume. In addition, we have begun our coal trading operations and early indications have shown positive results. We are optimistic that in time, this will prove to be a steady source of revenue and profit for the Group. We are working tirelessly towards the completion of the five acquisitions. We are confident that upon completion, the Group has the right experience and capability to ensure that the acquisitions will be of long term benefit to the Group,? Charles Antonny Melati, Executive Chairman of Geo Energy said, referring to the conditional sale and purchase agreements process done since the beginning of FY-2013 to purchase five mining concessions in Kutai Barat Regency, East Kalimantan, which are located in close proximity to the Group?s current BEK Mine.
Editing by Er Audy Zandri