May 1, 2011

Adaro 1Q net profit increases 11.3%

PT Adaro Energy Tbk (ADRO), Indonesian coal miner, reported US$108.9 million net profit for the first quarter of this year, a 11.3% increase from US$98 million a year earlier on the higher average selling price (ASP).
The increase in Adaro's net profit, that is owned by several Indonesian tycoons such as Edwin Soeryadjaja, Sandiaga Uno, T.P. Rahmad, and Boy Garibaldi Thohir, was also underpinned by foreign exchange gain of US$8.7 million, no goodwill amortization as compared to US$13 million in 1Q 2010.
Adaro's earning per share increased to US$0.00341 in 1Q 2010 from US$0.00306 in 1Q 2010.
However, the company posted a slight decline of 1.2% in its operating profit to US$219 million from US$222 million, resulting a lowered operating margin of 3.8% to 29% from 32.8%.
The decline was driven by operating expanses which increased nearly 50% to US$30.4 million from US$20.4 million.
Adaro's net revenue increased 11.7% to US$757 million from US$678 million due to higher average selling price (ASP). 
These was because better pricing conditions in line with the global market recovery in 2010. The company recorded a 16.3% increase in ASP in 1Q 2011.
Production & sales
Adaro's production volume fell 6.8% to 10.60 million tons from 11.36 million tons, while coal sales volume slightly decreased 4.8% to 10.91 million tons from 11.46 million tons.
The production decrease was because the pre-stripping and other waterproofing activities carried out in the dry season of 2009, which allowed production to continue at a high rate during 1Q 2010.

Disclosure: No position at the stock mentioned above.

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