Golden Energy: GEMS 2015 coal output jumps by almost 32%

Despite the global coal market downturn, IDX-listed coal miner PT Golden Energy Mines Tbk (GEMS) saw production last year jumped by 31.8 percent to 8.7 million tons from 6.6 million tons in the previous year.

This was reported on Thursday by SGX-listed Golden Energy and Resources Ltd, which holds a nearly 67 percent stake in GEMS in a filing with the stock exchange.

Golden Energy and Resources said that the coal division continued to be its shining star during the year, contributing approximately 83.5 percent towards the aggregated revenue.

Golden Energy said that GEMS subsidiary PT Borneo Indobara (BIB), which operates mines in South Kalimantan, contributed 72.4 percent to the total production volume, an increase of 37 percent from 4.6 million tons in 2014 to 6.3 million tons in 2015.

In addition, another GEMS subsidiary PT Kuansing Inti Makmur (KIM), which operates mines in Jambi, saw production volume also increased by 20 percent to 2.4 million tons in 2015 from 2 million tons in the previous year.

?We sold 9.5 million tons of coal in 2015, 5.6 percent higher than the 2014 sales volume of 9.0 million tons,? Golden Energy said in the statement.

The company said its coal trading division sales volume in 2015 dropped as a result of lower export sales. The composite average sales realisation for its coal business was US$37.28 per ton in 2015 compared to $48.27 in 2014, impacted by prolonged oversupply situation and weak demand.

Golden Energy elsewhere said that the coal mining division incurred some $2.5 million of capital expenditure on infrastructure enhancement at its BIB mine block and KIM mine block, located in South Kalimantan and Jambi respectively. ?As compared to 2014, we have incurred lower capital expenditure largely driven by prevailing market conditions.In aggregate, our coal mining and coal trading divisions reported $11.2 million of segment results in 2015 amidst the weakening coal market,? Golden Energy said.

?We recognise the survival of our coal mining divisions largely depends on managing our production costs, augmenting productivity and taking a long-term view towards recovery. We have been cutting our operational costs significantly and have engaged a professional firm to work with us on cost rationalisation and process improvements, across the Group?s value chain,? it added.

In aggregate, Golden Energy said it reported loss before tax of $9.2 million in 2015 compared to profit before tax of $15.2 million in 2014. Despite the lower revenue recognised and the loss reported in 2015, EBITA remains positive at $32.7 million and EBITA before foreign exchange differences at $38.0 million.

Golden Energy and Resources Ltd was formed through the recently completed RTO of SGX Mainboard-listed United Fiber System Limited, and is principally engaged in the exploration, mining, processing and marketing of thermal coal sourced from its coal mining concession areas, covering an aggregate of approximately 38,165 hectares in South Kalimantan, Central Kalimantan and Jambi.

Editing by Reiner Simanjuntak