Nov 11, 2010

Adaro estimates 40% net profit drop

One of Indonesia's coal miners PT Adaro Energy Tbk projected its net income at the end of this year will drops 40% compared to the end of 2009.
Director of Adaro Energy Andre J. Mamuaya said the heavy rainfall in the mining site is one of the reasons for the net income drop.
“The conditions make us have to lower the target. At least similar to the one that occurred in quarter III/2010 year on year [YOY],” he said.
Up to 2009, the listed coal mining company has booked a net income of Rp4.4 trillion with drop estimation around 40% while the corporate bottom line projected to be around Rp2.64 trillion.
Meanwhile, the net income of ADRO-coded company until the end of September 2010 has reached Rp1,6 trillion or decreased 52% compared to Rp3.5 trillion in same period last year.
The drop of net income caused by weather factor so that the company’s coal production only increased 12% to 31.84 million tons while its sales volume at 32.36 million tons.
In addition, the strengthening rupiah up to September 2010 also influenced its revenues.
The heavy rainfall made the consolidated operating revenue of the company up to quarter III/2010 dropped 9.7% to Rp18,07 trillion compared to Rp20,01 trillion in same period last year.
Andre Mamuaya also added that the coal average prices are in range of US$56–US$57 per metric ton.
“We are trying to restore the company performance by increasing the production volume next year,” Andre said.
Adaro plans to spend capital expenditure for next year as much as US$464 million and will be financed by the company internal cash. So far, Adaro total cash amounting to US$1.2 billion.
The company will conduct a number of business expansions by entering electrical sector as eyeing the power plant project in Pemalang worth of US$106 million. The rest will be used to buy bulk carrier for coals.
“We will use the rest of the cash for coal acquisition. However, we will increase the number of mines,” said Andre Mamuaya.

Disclosure: No position at the stock mentioned above.  

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