Feb 9, 2011

Bukit Asam expects above Rp3 trio profit

The state-owned coal miner PT Tambang Bukit Asam Tbk (PTBA) expects to reach 2011's net profit above Rp3 trillion from above Rp2 trillion last year.
The earning increase is mainly underpinned by higher sales volumn and prices. PTBA is targeting a 31% increase in sales volume to 16.9 million tons this year from 12 million tons last year.
The company expects a 46.34% rise in revenue to Rp12 trillion this year from Rp8.2 trillion last year. "We predict our 2011's average selling price at US$80 per ton from US$61.5 ton," Sukrisno, Bukit Asam CEO, said in a press conference today.
According to him, PTBA sets capital expenditure of Rp1.8 trillion to support this target. It will be generated from internally cash flow. The company records Rp5 trillion of free cash flow.
As a part of business diversification, PTBA and Germany's Lurgi AG are studying to develop coal gassifiction in Riau provinces with capacity 800,000 metric british thermal unit per year.
At end of January, they expect the feasibility studies are final.  "We  will supply 6 million tons of coal and the off taker is PT Pertamina with total contract 30 years."  The coal gassification project development requires 2-3 years.
Dono Boestami, PTBA Finance Director, said to finance the capex PTBA from internally generated cash and bank loans to finance the capex in 2011.
PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia Tbk and PT Bank Negara Indonesia Tbk have committed to bankroll the project.
PTBA requires US$350 million to finance lot of projects until 2014. The investment will be financed by cash internal, bonds or bank loans.
PT Bukit Asam Transpacific Railway a joint venture company beetwen PTBA (10%) PT Transpacific Railway Infrastructure (80%) and  China Railway Engineering Corporation (10%) with project values US$1.5 billion.
The development of the project will start in first half 2010 and will be finished in 2014. Power plants project with capacity 2 x 100 megawatt in South Sumatera requires US$350 million.
PTBA also has joint partners a railway project with PT Kereta Api Indonesia with total investment of US$47.7 millions.
Other projects are Pelabuhan Tarakan expansion, exploitation  and acquisition. The company plans to acquire one or two coal mining company in South Kalimantan in this year.
The company prepares Rp1 trillion for this plans. Boestami said with all these business expansion the capacity production of Bukit Asam will achieve 40 million tons in 2014 from the existing capacity productions 12.5 million tons in 2010.

Disclosure: No position at the stock mentioned above.  

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