Jan 13, 2011

Harum Energy hits 7.4 mio tons target

Coal miner PT Harum Energy Tbk (HRUM), controlled by Indonesian businessman Kiki Barki, is confident to reach its annual production target last year of 7.4 million tons, combining Mahakam Sumber Jaya and Santan Batubara.
Harum Energy President Director Ray A. Gunara said the 2010's coal production hasn't been finalized yet because the company is still in data verification.
"However, based on the initial data, we are confident to reach the existing target," he told Insider Stories. According to him, average selling price (ASP) in 2010 is still calculated, but it will be better from 9M 2010 as a higher realization ASP in the fourth quarter of last year.
In the 9M 2010 statement, Harum Energy said the ASP in 1Q, 2Q, and 3Q 2010 were US$65.1 per ton, US$72.8, and US$81.8 per ton respectively. In 9M 2010, Harum Energy produced 5.2 million tons and sold 6 million tons.
Mahakam Sumber Jaya produced 3.6 million tons and Santan Batubara's production was 1.6 million tons.
Harum Energy is optimist on its 4Q 2010 outlook on the back of expected strong ASP and stronger production. Substantiallu all the expected production in 4Q 2010 has already been sold and priced at similar level to the realized ASP in 3Q 2010.
In a morning note published by Mandiri Sekuritas today, pricing for 1Q 2011 is 75% fixed and 25% index linked, while the rest quarters have not been priced yet. 1Q 2011 is expected to contribute 25% of the total full year 2011 sales volume, so it will lead to only 18%-19% fixed price for FY2011 sales volume.
"This is great pricing strategu in our view amidst coal price hike. Therefore, we expect much higher selling price in 2Q2011 which potentially to reach around US$90 per ton.

Disclosure: No position at the stock mentioned above.

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