Jul 28, 2011

Bukit Makmur vs Pamapersada

PT Delta Dunia Makmur Tbk (DOID), parent of PT Bukit Makmur Mandiri Utama (BUMA), Indonesia's second largest coal mining contractor, reported a 14.59% increase in overburden removal for the first 6 months of this year. However, its coal output was unchanged.
Delta Dunia posted 155.5 million bank cubic meter (bcm) of overburden removal in 1H 2011 from 135.7 million bcm in 1H 2010. Coal production was flat at 16.5 million tons in 1H 2011.
How about its competitor, PT Pamapersada Nusantara, a wholly owned subsidiary of PT United Tractors Tbk?
Pamapersada's coal output made a slight increase of 5.84% to 39.9 million tons from 37.7 million tons. Overburden removal rose 15.95% to 364.9 million bcm from 314.7 million bcm.
With flat coal output and nearly 15% growth in overburden, Delta Dunia is indicated to post a weak earning in the second quarter of this year (2Q2011), mainly due to margin compression driven by a jump in depreciation cost, spare part-maintenance cost, and accounting changes in salary and bonus payment from cash basis into accrual basis. 
"In addition, there would be one-off refinancing cost of US$16 million-US$17 million," said a morning notes issued by PT Mandiri Sekuritas last week.
Overall, it potentially reduces Mandiri Sekuritas's FY11 forecast operating margin by 2%-3% or equivalent to Rp130 billion-Rp200 billion earning, compared to the brokerage's previous FY11F net profit forecast of Rp454 billion. 

Disclosure: No position at the stock mentioned above.

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