UT?s revenue down 6% on weak coal sector
Friday, October 30 2015 - 10:11 AM WIB
IDX-listed heavy equipment and coal mining firm PT United Tractors Tbk (UT) said that revenue in the first nine months ending September of this year declined by 6 percent to Rp 38.3 trillion compared to the same period of last year amid subdued coal mining sector.
The company, however, said in a statement Thursday that net income rose by 17 percent to Rp5.6 trillion with the benefit of favorable US dollar exchange rate.
Construction Machinery segment recorded a decrease in Komatsu sales volume by 40 percent to 1,799 units from 2,982 units. On the other hand, revenue of after sales services increased by 6 percent to Rp4.7 trillion. In total, revenues from Construction Machinery segment reached Rp10.8 trillion or decreased by 10 percent.
Mining Contracting business segment, through PT Pamapersada Nusantara (PAMA), recorded a 7 percent decrease in net revenue or down to Rp23.4 trillion, as coal production volume declined 4 percent to 81.3 million tons, with overburden removal down 3 percent to 593.1 million bcm. Mining business segment recorded 13 percent lower coal sales volume at 3.9 million tons, with net revenue declined by 13 percent to Rp3.3 trillion.
Overall, revenue contribution from Mining Contracting, Construction Machinery, Mining, and Construction Industry was 61 percent, 28 percent, 9 percent, and 2 percent respectively.
The company?s Mining business segment was operated by PT Tuah Turangga Agung (TTA). As per September 2015, total coal sales volume decreased by 13 percent to a total of 3.9 million tons. This has caused a decrease in revenue of Mining business segment by 13 percent, from Rp3.8 trillion to Rp3.3 trillion.
?Considering the ongoing subdued coal market conditions, the company is currently reviewing its coal production plans and the carrying value of it own coal mining properties,? UT said in a statement. If an impairment provision is required to adjust the carrying value of these coal mining properties, such adjustment will be recorded at end of year 2015, it added.
The company operates its Mining Contracting business through its subsidiary PT Pamapersada Nusantara (PAMA). As of September 2015, PAMA captured 47 percent of local market share based on net revenue.
Year on year, PAMA recorded a 4 percent decrease in coal production from 85.1 million tons to 81.3 million tons, and overburden removal down by 3 percent from 611.0 million bcm to 593.1 million bcm. As a result, revenue for the Mining Contracting segment declined by 7 percent to Rp23.4 trillion from Rp25.1 trillion in 2014
As of September 2015, Construction Machinery business segment recorded a decrease in Komatsu sales volume by 40 percent to 1,799 units, lower compared to the sales volume in 2014 of 2,982 units. However, Komatsu was able to maintain its market leader position in heavy equipment sector with the domestic market share of 37 percent (data of internal market research).
The decrease remains due to the ongoing subdued market conditions, and this condition was reflected in market volume of heavy equipment in Indonesia which was down from 7,449 units in 2014 to 4,820 units in 2015 (source: internal research). Further, as the impact of sluggish mining activities, sales volume of other products were also dropped. UD Trucks fell from 154 units to 54 units, while Scania products declined from 308 units to 189 units.
On the other hand, the revenue of after sales services increased by 6 percent to Rp4.7 trillion, due to the need to maintain the life cycle of heavy equipment. Overall, total revenue of Construction Machinery business segment until September 2015 recorded a decrease to Rp10.8 trillion, a down of 10 percent compared to Rp11.9 trillion in same period last year.
Editing by Reiner Simanjuntak