Geo Energy swings to profit
Friday, November 11 2016 - 12:35 AM WIB
SGX-listed Geo Energy Resources Limited, an integrated Indonesian coal mining group, announced Thursday a net profit attributable to shareholders of US$7.4 million for the three months ended September 30, 2016 (3Q), compared to a gross loss of $0.1 million in the corresponding period of last year.
The company said in a statement that revenue increased closed to tenfold from $5.2 million in 3Q2015 to $56.9 million in 3Q2016, attributed to higher revenue recognition from coal sales delivered by PT Sungai Danau Jaya (SDJ) mine. SDJ?s coal production more than doubled from 850,000 tons of coal in 2Q2016 to 1.8 million tons of coal in 3Q2016 as the group stays on track to deliver its target of 6 million tons of coal per year.
Geo Energy said there was no revenue contribution from the group?s other coal mine PT Bumi Enggang Khatulistiwa (BEK) as production has been placed under care and maintenance since end of 2014. Strategically, the group said it would prefer the ICI for 3,400 GAR coal to achieve a more cost effective price range to commence mining and to focus more on coal production in SDJ?s region.
Gross profit and EBITDA margins in 3Q2016 were 22.4 percent and 25.1 percent, respectively.
The company said it has continued to keep its operating costs low and maintain a lean upkeep in 3Q2016 as general and administrative expenses remained relatively flat increasing by 5 percent year-on-year (yoy) to $1.6 million in 3Q2016. Finance costs decreased marginally by 3 percent yoy to $1.5 million in 3Q2016 mainly due to lower amortized borrowing costs pertaining to its Medium-Term-Note (MTN).
Earnings per share increased yoy from a loss of 0.12 US cents to an earnings of 0.61 US cents in 3Q2016.
The group?s cash and bank balances improved by $5.2 million from $12.4 million as of December 31, 2015 to $17.6 million as of September 30, 2016. Following the group?s divestment of mining services and coal haulage services businesses under wholly owned subsidiaries, PT Mitra Riau Pratama (MRP) and PT Geo Mineral Trading (GMT) in June 2016, finance leases have notably decreased from $9.4 million as of December 31, 2015 to $0.1 million as of September 30, 2016, thereby generating much cost savings for the group.
Net asset value per share increased from 7.91 US cents per share as of December 31, 2015 to 8.92 US cents per share as of September 30, 2016 while total number of shares issued increased from 1,185,050,891 shares as of December 31, 2015 to 1,212,273,113 shares as of September 30, 2016.
Barring any unforeseen circumstances, Geo Energy said it is expecting an initial target production of more than 600,000 tons of coal for each of the remaining months in 2016 and 10 million tons of coal production and sales per year by 2017.
The company said the ICI for 4,200 GAR coal has continued its uptrend increasing 77 percent from US$26.69 per ton in January 2016 to $47.20 per ton on November 4, 2016. Barring any unforeseen circumstances, the group said it remains confident of maintaining profitability going forward based on its current low cash production costs of about $25 per ton.
Editing by Reiner Simanjuntak