GTBO may loss Rp 711 billion due to problematic contract
Saturday, November 3 2012 - 05:22 AM WIB
The company has said that it would revise certain clausal in its sales contract with a buyer from the United Arab Emirates (UAE). The revision would result in the change in the company?s financial reports for second and third quarters because earnings worth about Rp 711.15 billion would be transferred into the current liability post in the company?s balance sheets.
In its third quarter financial report, the company for example booked total revenues of Rp 1.52 trillion as of the end of September, which reflected a 823.78 percent increase compared to those recorded in the same period last year.
With the sharp increase in the revenues, the company?s net profit also jumped to Rp 1.2 trillion in the same period from only Rp 86.89 billion at the end of the third quarter of last year.
The sharp increase in the revenues and profits was seen since the first semester of this year, after the company secured sales contracts for 10 million tons of coal to the UAE.
Under the contract, GTBO would deliver the coal in three stages. The first shipment of about 3 million tons will be carried out before December, 2014, the second shipment of about 3.5 million tons before December, 2015 and the third shipment of another 3.5 million tons will be carried before December 2016.
The sale contract also contains a clausal which is not common in the mining industry. The buyer, for example, also has an option to use its own operator to conduct mining activities in GTBO?s mining concession in Bunyu island, East Kalimantan.
In addition, the contract also requires the buyer to settle the payment in advance or before the coal shipment.
Fajar Indra, an analyst at Panin Securities, said that the revision should be made because the advance payment received by GTBO should be considered as liabilities instead of revenues.
?It is not right if the advance payment was booked as revenues because the coal shipment has not been conducted,? he told Kontan.(*)