Release: Straits Asia?s results continue to surge
Friday, November 14 2008 - 02:56 AM WIB
In line with the excellent results, the Group?s strong balance sheet and cash flow, the Board of Straits Asia has approved a second interim dividend of 1.55 US cents per share for payment on 10 December 2008.
Group revenues derived from thermal coal safes were a record US$433 million and are reflective of the very strong increase in prices for the Group?s products from its two mines. Coal production at 6.6 million tonnes was another record for Straits Asia. Whilst a strong recovery in production from the rainfall in Q3 2008 is taking place, the Group?s ability to achieve its production target of 9 million tonnes of coal for FY2008 will depend on good weather for the rest of the year and safes will also depend on available shipping schedules. The average selling price will be not less than US$70.50 per tonne, as previously announced.
Operations
Q3 2008 operations were affected by heavy rainfall, which slowed production, particularly in September. Nevertheless, there was no repeat of the flooding that affected Sebuku last year and both Jembayan and Sebuku coped well, as the Group had previously invested and planned for bad weather contingencies. The rain has abated in recent weeks.
The capacity upgrades at Jembayan (5.5 mtpa to 11 mtpa) and Sebuku (4 mtpa to 8 mtpa) remain on schedule.
The Group has priced 6.6 million tonnes of its 2009 production at prices averaging US$114 per tonne. While contract prices have receded from the highs experienced in Q3 2008, customers in the seaborne thermal coal market continue to show firm demand for Straits Asia?s coal despite the global threat of recession.
Straits Asia has reviewed the progress of the reclassification of the key forestry areas on Sebuku and now believes that the process is unlikely to be ratified by the end of 2008. The discussions have progressed well and are continuing, with positive feedback received from the relevant authorities; hence Straits Asia remains confident that the approval will be given in due course.
Exploration
The Group has 16 drilling rigs operating at Jembayan and Sebuku and expects to make further, positive announcements on its reserve and resource position in the near future.
Chief Executive Officer?s Comments
Mr Richard Ong Chui Chat, Straits Asia?s Chief Executive Officer said: ?In today?s business climate where there are so many challenges and concerns, it gives Straits Asia immense pleasure to announce these very strong results and to be able to look at the future with an underlying degree of confidence.
?I was particularly pleased that we have received a firm offer to refinance the 2007 bridge loan and that, with over US$ 80 million cash on hand, Straits Asia is able to reward its shareholders with an interim dividend for Q3 2008, the second interim dividend we have paid in 2008.
?Going forward, we are well advanced with our planning for 2009 with a key objective of maintaining the strong momentum in our Group?s operations and results.? (end of edited release)