Toba Bara reports lower sales on coal price drop
Thursday, July 30 2015 - 01:15 AM WIB
IDX-listed coal miner PT Toba Bara Sejahtera Tbk said that sales revenue in the first six months of this year dropped by 22.7 percent compared to the corresponding period of last year due to a combination of falling price of the commodity and lower sales volume.
Toba Bara said in a statement obtained Thursday that revenue during the first semester of this year fell to US$190.8 million to $246.8 million in the same period of last year as the company saw its average selling price (ASP) fell by 10.3 percent during the period in line with global price drop, while sales volume contracted by 15.4 percent year-on-year (y-o-y).
The company, which operates mines in East Kalimantan, said that profit (before minority interest) in the first six months of this year was $15.3 million. In did not provide comparative figure for last year?s corresponding period.
?The company anticipated lower profits and EBITDA due to lowered production and sales volumes and decreased NEWC Index price. However, due to the company?s resilient operational performance, discipline in implementing cost efficiency initiatives, and successful marketing strategies, the company was able to achieve a y-o-y gross profit margin increase from 18.1 percent to 18.9 percent, EBITDA margin improvement from 15.5 percent to 15.6 percent, and only a marginal 0.6 percent decrease in operating margin,? Toba Bara said in the statement unveiling its second quarter report.
Toba Bara said that coal production in the second quarter of this year reached 1.5 million tons, which in line with its 2015 quarterly guidance of between 1.5 ? 2.0 million tons. Such production volume resulted from operations of all three operating subsidiaries with the following respective contributions: about 1.0 million tons from PT Adimitra Baratama Nusantara (ABN), ~0.2 million tons from PT Indomining (IM), and ~0.3 million tons from PT Trisensa Mineral Utama (TMU), which are all located in East Kalimantan. ABN remained as the main contributor to the Company?s total production volume, while all three subsidiaries achieved their respective second quarter production volume targets.
The company said that y-o-y stripping ratio (SR) declined by 8.1 percent to 12.5x in the first-half of this year (1H15) from 13.6x in 1H14, while quarter on quarter (q-o-q) SR remained stable, reflecting the company?s continued efforts in improving its operational performance amidst the low coal price environment.
It said that this was in line towards achieving the company?s 2015 annual SR target of 11x ? 12x. ABN lowered its SR from 14.6x in 1H14 to 13.2x in 1H15, IM from 13.1x to 12.3x, and TMU from 11.6x to 9.8x over the same period. In line with the strategy to continually lower overall costs towards maintaining certain profitability margin, the company managed to reduce its SR and to sustain stable overburden dump (OB) distance, which, including fuel cost, typically account for 65-70 percent of FOB cash cost.
Elsewhere, Toba Bara said that as of 1H15, it has secured contracts accounting for around 80 percent of its 2015 sales volume target at fixed price. ?The terms of payment were relatively favorable such that the typical quality buyers were committed to prepay certain percentage of the contract values. This marketing initiative has enabled the company to maximize its pricing strategy given the adverse coal market condition,? it said.
Toba Bara said that a 23.5 percent decrease in cost of goods sold from $202.2 million in 1H14 to $154.7 million in 1H15 stemmed from a reduction in FOB cash cost, slipping by a significant 11.8 percent y-o-y to $44.8/ton in 1H15. ?This resulted from cost efficiency initiatives, better execution of mine plan, and lower fuel costs.?
Editing by Reiner Simanjuntak