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Lower ASP hurt Adaro in 2013
The old pain: Tutupan coal mine, owned by PT Adaro Energy, in Balangan, South Kalimantan
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The old pain: Tutupan coal mine, owned by PT Adaro Energy, in Balangan, South Kalimantan. Adaro Energy recorded a 40.2 percent plunge in its net profit in 2013 due to a drop in the coal average selling price (ASP). (JP/R. Berto Wedhatama) (ASP). (JP/R. Berto Wedhatama)
T
span class="inline inline-none">The old pain: Tutupan coal mine, owned by PT Adaro Energy, in Balangan, South Kalimantan. Adaro Energy recorded a 40.2 percent plunge in its net profit in 2013 due to a drop in the coal average selling price (ASP). (JP/R. Berto Wedhatama)
Coal miner PT Adaro Energy (ADRO) says a lower coal average selling price (ASP) once again hurt its business as its net profit plunged 40.2 percent last year.
Adaro's latest financial report shows that its net profit stood at US$229.26 million in 2013, down from $383.31 million booked in 2012.
In a statement, Adaro president director Garibaldi Thohir attributed the figure to the lower ASP, which fell 19 percent year-on-year, in addition to other expenses.
Adaro has seen its ASP decline two years in a row since 2012 as a result of weakening global coal prices even though it posted higher production and sales volumes.
Its production volume actually grew double digits, up almost 11 percent to 52.27 million tons, while its sales volume surged 10 percent to 53.47 million tons in 2013.
Adaro investor relations head Cameron Tough said that last year's production volume was its annual highest and that its fourth quarter production volume, which was 13.59 million tons, was its second-highest quarterly production in the company's history.
Adaro's Tutupan pit in South Kalimantan remains its main coal production source, contributing to 73.9 percent of the production volume.
However, its production stagnated at 38.65 million tons last year.
On the other hand, the Paringin pit, also in South Kalimantan, recorded the highest production as the volume soared more than six times to 5.74 million tons.
With overall higher production and sales volume, but lower ASP, the company's revenues dropped 11.7 percent year-on-year to $3.28 billion. Its costs of revenues decreased as well by 5 percent to $2.54 billion.
Besides coal mining and trading, Adaro currently runs mining services and logistics businesses.
Mining and trading made up 93.4 percent of its total revenues, followed by mining services with 4.5 percent and logistics with 2.1 percent.
For 2014, Adaro hopes to see its production volume increase to a minimum 54 million tons.
Garibaldi said that Southeast Asian countries, along with China and India, would continue to boost energy demand, especially with their large population and vibrant economic activities.
Adaro allocated $200 million to $250 million in its capital expenditure and expects this year's operations to push its earnings before interest, taxes, depreciation and amortization (EBITDA) higher to reach up to $1 billion.
It is also looking to produce coal from its Balangan Coal Project in South Kalimantan in 2014.
The Balangan pit is estimated to be able to produce up to 8 million tons of coal per year.
According to the financial report, Adaro had $6.73 billion in total assets, its liabilities stood at $3.54 billion and its equities amounted to $3.19 billion.
Meanwhile, its shares closed at Rp 965 on Tuesday following the announcement of its 2013 financial performance. The price fell 3.5 percent from the previous day.
