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Bumi targets 10% rise in output
PT Bumi Resources expects a 10 percent rise in output and sales next year, despite the coal mining company reducing this year's output forecast
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PT Bumi Resources expects a 10 percent rise in output and sales next year, despite the coal mining company reducing this year's output forecast.
Asia's biggest exporter of power-station coal forecasts that next year's output volume will rise to 60.5 million tons, from an estimated production of 55 million tons in 2008, with the company aiming to boost capacity.
The 2008 output estimate is lower than the company's earlier projection made in August when it was hoped to raise output to 57 million tons by the end of this year.
Bumi senior vice president for investors relation Dileep Srivastava said unpredictable factors such as rains, floods and forestry issues all hampered production and delivery and were the main factors affecting the 2008 reduced forecast.
Bumi also set a 10 percent increase target for the volume of coal sales in tons next year, targeting 58.3 million tons, without going into details.
In relation to coal prices, Dileep said the mining company had revised down this year's average selling price to US$73.5 a ton from the previously estimated $77 a ton.
Bloomberg reported that power-station coal prices at Australia's Newcastle port, a benchmark for Asia, have plunged 60 percent from a July record as demand from utilities weakened amid the global economic slowdown. Prices were at $78.25 a ton in the week ended Dec. 12, according to the global COAL NEWC Index.
The company is yet to complete calculations on next year's prices, therefore estimating revenues, as these will be subject to global coal index prices as well as demand.
As of the end of the third quarter, Bumi almost doubled net profits, excluding a one-time gain recorded a year earlier, supported by the price of coal, which peaked in July before dropping to its current level.
Bumi has made headlines recently for other reasons, dragged down by the financial problems faced by its holding company -- PT Bakrie & Brothers.
Bumi is involved in a recent deal struck by its holding company PT Bakrie & Brothers as part of a debt settlement. Bakrie, controlled by the family of People's Welfare Minister Aburizal Bakrie, owns a 35 percent stake in Bumi.
Under the deal, Northstar Pacific, an affiliate of U.S. based equity firm Texas Pacific Group and owned by businessman Patrick Walujo, would buy out Bakrie's US$575 million debt.
Nalinkant A Rathod, a Bumi commissioner and Bakrie & Brother president director who was present at a Wednesday press conference, said the debt deal was still actually in progress and the projection on how many Bumi shares would still be kept by Bakrie would be announced later this month, as scheduled.
