ITMG?s revenue down 21% on lower coal price
Thursday, November 17 2016 - 01:22 AM WIB
IDX-listed coal mining firm PT Indo Tambangraya Megah Tbk (ITMG) reported lower sales revenue in the first nine months of this year compared to the corresponding period of last year due to weaker coal price, but third quarter results were better than the second quarter on improving coal price.
ITMG said in a statement on Wednesday that with average coal selling price at US$47.5 per ton in the first nine months of 2016, or 18 percent lower than that in the same period last year, the company has booked sales revenue of $958 million, or 21 percent lower than that of $1,206 million in the same period last year.
In this first nine months, gross profit margin was recorded 20 percent, or 2 percent lower than it was in the same period last year. EBIT in the first nine months of this year was worth $106 million versus $146 million in the same period last year.
ITMG, however, said that it recorded higher sales revenue by 25 percent from $278 million in the second quarter to $349 million in the third quarter with average coal price staying at $49.9 per ton, or 12 percent higher from $44.7 per ton in the last quarter.
Gross profit margin went up by 5 percent from the last quarter to 22 percent in the third quarter. Earnings Before Tax and Interest (EBIT) rose by 132 percent from $20 million in the previous quarter to $47 million in the third quarter. Net income was recorded 146 percent higher, from $13 million in the second quarter to $33 million in the third quarter.
ITMG said that throughout the first nine months of the year the company has produced an output of 19 million tons of coal with total sales volume of 20.1 million tons shipped to China (5.2 million tons), Japan (3.8 million tons), Indonesia (2.8 million tons), India (2.5 million tons) and other customers in Europe, East Asia, Pacific, and Southeast Asia.
?For 2016, higher-than-expected rainfalls have impacted our production, and the production volume is now targeted at 26.2 million tons while sales volume target has been set to 27.1 million tons,? ITMG said in the statement.
Of that sales number, 99 percent has been sold. The positive impact of higher coal prices is expected to be realized in the fourth quarter performance, the company said.
The company said it has focused on productivity improvement and cost rationalization to create an operating platform that is sustainable during the downturn while maintaining flexibility to capture opportunities when the market improves. ?Our production costs have been reduced by 31 percent since the program was tightly applied in 2013. As a result, an increase in average coal price since mid-year has resulted in a larger gross profit margin than that in previous years.?
ITMG has five producing coal concessions in Kalimantan operated by subsidiaries PT Indominco Mandiri, PT Trubaindo Coal Mining, PT Bharinto Ekatama, PT Kitadin (Embalut and Tandung Mayang) and PT Jorong Barutama Greston.
Editing by Reiner Simanjuntak