Apr 28, 2011

Harum Energy 1Q profit surges 142%

Coal miner PT Harum Energy Tbk (HRUM), which is owned by Indonesian tycoon Kiki Barki, reported a 142.43% surge in net profit for the period of March 2011 as a result of higher revenue.
Harum posted Rp377.34 billion net profit or Rp114.46 per share in 1Q 2011 from Rp155.65 billion or Rp53.63 per share.
Operating profit soared 206.94% to Rp502.31 billion from Rp163.65 billion, while gross profit rose 156.08% to Rp628.90 billion from Rp245.59 billion.
Revenue was Rp1.51 trillion, reflecting a 69.26% increase from Rp894.66 billion. "1Q11 net profit accounted for 19.0% ours and 20.2% consensus relatively inline with expectation, considering the seasonality in which 1Q usually account for 16%-20% of full year result. Last year 1Q10 net profit accounted for 16.3% FY10 net profit," said a note distributed by Mandiri Sekuritas. 
Margins jump 
Gross margin and operating margin increased significantly to 41.5% and 33.2% respectively, mainly driven by higher selling price at US$88.4 (+35.8% yoy, +7.5% qoq) near to our FY11F ASP of US$90.5/ton. 
HRUM booked attractive ASP compare to peers, suggesting better pricing strategy and higher exposure to spot market.
Combined 1Q11 coal production from its unit PT Mahakam Sumber Jaya (MSJ) (1.6 million tons) and Santan Batubara (0.4 million tons) reached 2 million tons (+14.9.% yoy, - 7.8% qoq), which represent 19% FY11 target. 
This is inline considering seasonality and Tambang Batubara Harum mine that is expected to commence production of 0.5 million tons in 4Q11. "Currently we have buy rating on the stock. HRUM is traded at 13.2x adjusted PER11F."

Disclosure: No position at the stock mentioned above.

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