Mar 31, 2011

Adaro FY10 net income plunges 49%

PT Adaro Energy Tbk posted a 49% plunge in net income to IDR2.2 trillion last year on the back of dropped sales prices and increased cost of goods sold.
President Director of Adaro Garibaldi Thohir said the production can be maintained although the company suffered pressure in term of operational due to rain factor so that the revenue increased by 4.9% to US$2.72 billion last year.
“Although the abnormal rainfall provides bad impact to the operational activity, we once again posted a growth in production and continue to maintain the record of annual production growth during 19 years,” he said in official statement, this morning.
Production volume and sales rose 4% and 6% respectively but the coal's average selling price fell 3% last year. Cost of revenue also rose 7% to IDR17 trillion as resulted by the increased of stripping ratio, distance transport of the further cover layer, and other additional costs due to weather.
The gross income declined by 30% to IDR7.7 trillion due to the increased cost of revenue has exceeded the increased net revenue. The declined net income and the increase of financial cost and goodwill amortization in 2010 have made the coal company’s net income eroded by 49% to IDR2.2 trillion.
Earning per share 2010 recorded as much as IDR69 or declined compared to IDR136.5 in previous year. The earning per share was not included in the mining amortization right (IDR496 billion) and goodwill (IDR490 billion) was IDR99.8 billion.
However, Garibaldi is optimistic that coal prospect will lead to a strong performance and a solid margin of EBITDA (earnings before interest, taxes, depreciation, and amortization) in 2011.
“The acquisition of 25% ownership in IndoMet coal project allows us to diversify the product portfolio with metallurgy coal,” he said.

Disclosure: No position at the stock mentioned above.

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