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espite increasing sales and acquisition plans in the offing, publicly listed coal miner PT Harum Energy (HRUM) forecasts that its performance might remain flat next year.

Harum Energy pointed toward the unfavorable price of coal and slowdown of demand for the commodity as influential factors.

President director of Harum Energy Roy Antonia Gunara said his company forecast global demand for coal would only grow 2 to 3 percent annually in the coming years.

'€œWhat we are going to do next year is maintain our margins,'€ Roy explained. '€œWe are expecting to at least have our sales increase by 10 percent next year from coal purchased from third parties.'€

Harum Energy saw its sales plunge by 20.1 percent in the third quarter of this year, from US$835.1 million (Rp 9.7 trillion) in the same period last year to $666.9 million. Most of its sales were exported to other Asian countries, with China and South Korea contributing 42 percent and 28 percent of the total sales last year respectively.

Profits slumped to $43.4 million, down 71.5 percent compared to $152.1 million in 2012.

The company had foreseen the likely pressure of the third quarter of this year as it agreed to sell its entire third quarter production before the middle of June, when the coal price was even lower.

Moreover, it said, a more competitive market was on the horizon as Australian producers would likely discount their coal as the depreciation of the Australian dollar against the US dollar would favor their performance.

The company sold 10.8 million tons of coal up to September this year, slightly decreasing compared to 11.4 million tons during the same period last year. It produced 9 million tons of coal up to the third
quarter this year, a 0.8 decrease compared to 9.1 million tons last year.

It also reported an 8 percent decrease in assets to $495.8 million due to shrinking coal reserves up to $50.8 million.

Average selling price for its subsidiary PT Mahakam Sumber Jaya (MSJ), which contributes 90 percent of Harum Energy'€™s total sales, was down by 17.6 percent from $84.9 per ton in the third quarter of last year to $70 a ton in the same period this year.

Harum Energy is now expecting to stock more reserves from its subsidiary PT Karya Usaha Pertiwi (KUP), which is expected to produce one million tons of coal next year.

The company acquired a 50.5 percent stake worth $2 million in KUP, a coal mining company in East Kalimantan, late last year.

It also planned to acquire another coal mining concession on the island. Roy, however, said that Harum Energy was still studying the plan and declined to provide further details.

The company is also planning to buy new shares in Australian coal miner Cockatoo Coal Ltd., which will cost Harum Energy around $20 million.

Harum Energy'€™s stake in the company will increase to 12 percent from previously 4 percent.

Currently, Harum Energy has five coal mining companies: KUP, MSJ, PT Santan Batubara, PT Tambang Batubara Harum and Harum Energy Australia '€” which is operated by Cockatoo.

MSJ, Santan and Tambang are also based in East Kalimantan. They have combined coal resources and coal reserves of 73 million tons, 10 million tons and 12 million tons respectively.

Harum Energy'€™s shares were traded on the Indonesia Stock Exchange at Rp 3,550 on Friday, a 2.07 percent drop compared to a day earlier.