Harum revenues up as sales increase

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Coal mining and logistics company, PT Harum Energy (HRUM), recorded a 71.1 percent jump in revenues to US$583.1 million in the first half of this year thanks to a sharp increase in sales to big markets such as South Korea, Taiwan and China.

The increase in revenues is in contrast to the downturn faced by giant coal companies, including PT Bumi Resources (BUMI), which suffered from a $334.1 million loss partly due to falling coal prices.

Coal prices slid 22.5 percent from $109.29 per tonne in January to $84.64 per tonne in August.

“The rise in revenues is a result of a roughly 70 percent increase in sales volume in this semester compared to the same period in 2011,” Veronica Jordan, PT Harum Energy’s head of investor relations, told The Jakarta Post.

The rise in revenues, therefore, brought up the company’s gross profit by 33 percent to $189.9 million from $142.5 million, she added.

The production capacity of the company including that of its subsidiaries PT Mahakam Sumber Jaya, PT Santan Batubara and PT Tambang Batubara Harum mining subsidiaries was roughly 20 million tons, she went on.

“Meanwhile, the total production volume for PT Harum Energy in the first half of 2012 was 6.1 million tonnes,” she said, adding that the major markets for the company in the first half of the year were South Korea, Taiwan and China.

The production activities of the company in this half of the year generated a rise in production costs, which leaped by 98.3 percent to $393.2 million in the second of this year compared to $198.2 million in the same period last year.

“The rise in fuel prices is one of the triggers behind the increase in production costs,” Jordan noted.

She added that in order to control the rise in production costs, the company planned to take steps to promote efficiency.

“The steps we are taking include implementing fuel efficiency programs, decreasing the utilization of non-essential equipment and rescheduling all non-production related projects,” she pointed out.

On the liabilities side, PT Harum Energy’s liabilities sat at $148.4 million by June 2012. The figure was 23.7 percent, or $28.4 million, more than their liabilities by the end of December last year.

“The rise in liabilities is due to an increase in operational debts to the company’s mining contractors. The rise is in line with the increase in the company’s level of production. These debts are part of the company’s capital cycle,” Jordan explained.

According to her, the company had not yet revised its targets, although commodity prices remained low and foreign markets remained under the pressure of sluggish growth in Western economies.

“However, the drop in commodity prices will affect the selling price of the company’s [coal] by approximately 10 percent,” she noted.