Mar 31, 2011

Bumi Minerals FY10 net income soars

Newly listed non-coal miner PT Bumi Resources Minerals Tbk (BRM) today reported a 3,655.72% jump in net income last year on the back of steep jump in revenue.
In a press statement obtained by Insider Stories today, Bumi Minerals booked Rp764.60 billion net income last year from Rp209.21 million net loss in the previous year.
A steep jump in net profit was due the increased profit recorded by Bumi Minerals' associated company PT Newmont Nusa Tenggara (NNT).
Revenue skyrocketed 730.59% to Rp148.51 billion from Rp17.89 billion. The company also posted a 113% increase in EBITDA to Rp120 billion from its 1H 2010 results. This was mainly driven from the fees generated by its 100%-owned subsidiary dubbed Bumi Resources Japan Company Limited (BRJ).
"We are happy to report our strong 2010 financial result to our shareholders. The IPO proceed not only successfully deleveraged our balance sheet, but it also allows us to monetize our existing assets," Bumi Minerals CEO Kenneth Farrell said.
Currently, the main revenue and cash flow drivers come from our investments in BRJ and NNT. NNT's copper and gold production showed 10% and 31% increase in 2010 from the previous year. In the next 24 months or 2 years, Bumi Minerals commences the first commercial productions from Bumi Mauritania S.A. (iron ore) and PT Dairi Prima Minerals (zinc and lead).  
Operating risk
In Vallar Plc prospectus page 39, there is risk relating to the operations of Bumi Resources Group, especially Bumi Minerals.
The Bumi Resources Group is considering various other funding alternatives for the BRM group. There can be no assurance that BRM and its subsidiaries will be able to finance the exploration, development and operations of their mining activities without credit support from Bumi Resources or subsidiaries of the Group outside the BRM group.
The Group could also lose part or all of its investments in BRM’s businesses if it fails to successfully develop them into revenue generating units.BRM will need substantial additional financing to build the infrastructure and to satisfy the other requirements necessary to develop its projects to the production phase.

Disclosure: No position at the stock mentioned above.

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