BUMI, subsidiaries extend share price drop
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Shares in coal miner PT Bumi Resources (BUMI) and its affiliated companies have continued to face pressures from commodity prices and investors’ concerns over internal management.
Shares in BUMI closed at Rp 1,100 apiece on Thursday, a 0.9 percent drop from the previous day. The company has seen its shares drop by about 50 percent year-to-date.
The declining price leaves BUMI’s market capitalization in sixth place among other mining companies and 35th out of all firms listed on the Indonesia Stock Exchange (IDX) on Thursday.
BUMI had led the mining sector in market capitalization, reaching Rp 75 trillion (US$8.1 billion) in the middle of 2011. On Thursday, the company’s market capitalization stood at Rp 22.8 trillion.
“BUMI’s share price decline was due to the accumulation of negative sentiments, ranging from declining coal prices to internal management, which market players see as underperforming,” Reza Priyambada of Indo Premier Securities said.
Coal prices have been on a downward trend due to economic slowdowns in big coal consumers such as China and India. Despite the decline, BUMI reported a higher average selling price (ASP) in the first quarter of the year, thanks to its long-term contracts.
The company’s coal sales increased by 14 percent to 15.9 million metric tons in the first quarter of the year, compared to 13.9 million metric tons in the same period last year. The ASP was US$92.80 per metric ton in the first quarter this year, up from $87.70 year on year. Despite higher revenue from higher production and ASP, BUMI remained at a net loss of US$100 million.
Reza said investors were also concerned about BUMI’s efforts to pursue early repayment of the second tranche of loans from the China Investment Corporation amounting to $600 million.
Shares in BUMI’s 87 percent-owned subsidiary PT Bumi Resources Minerals also took a sharp drop on Thursday, closing at Rp 310 apiece, an 8.82 percent fall from a day earlier. The shares, traded under the symbol BRMS, have plunged 70 percent so far this year, compared to Rp 530 in early January. BRMS shares touched their lowest point since the company was listed on the bourse on December 2010.
Meanwhile, shares in PT Borneo Lumbung Energi & Metal (BORN), which owns BUMI through its London-listed subsidiary Bumi Plc, closed at Rp 500 apiece on Thursday, a 1.96 percent drop compared to Rp 510 a day earlier. BORN’s shares slid on Thursday to their lowest level since the company’s stock listing on the bourse in November 2010.
Shares in the coking coal producer have lost 64 percent of their value so far this year.
Reza said that BORN saw its shares price decline after it forged a partnership with Bakrie group.
“Market players already have a negative image of Bakrie-related companies,” he said.
BORN agreed last year to purchase a 23.8 percent stake in Bumi Plc from PT Bakrie & Brothers (BNBR) for $1 billion, which BNBR used to pay down its mounting debts.
BORN is now preparing moves to raise funds to repay the $1 billion it borrowed from Credit Suisse to finance the deal. The company has said that it was considering issuing dollar denominated bonds to refinance the loans.