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T Delta Dunia Makmur (DOID), which owns the nation’s second largest mining contractor, PT Bukit Makmur Mandiri Utama (BUMA), spent US$111 million over the first three months of this year to support its businesses, but while doing so has apparently disrupted the parent company’s balance sheet.

Delta Dunia has set aside $300 million for capital expenditures this year. “Most of the spending was for the purchase of heavy equipment,” company investor relations director Rani Sofjan said.

Spending on heavy equipment would add to the company’s assets, but it also created higher depreciation expenses.

Delta Dunia recorded Rp 361 billion ($40 million) in depreciation expenses during the January-March period of this year, according to a file available on the company’s web site.

It reported a net loss of Rp. 95.9 billion during the first quarter after booking a Rp 164.87 billion net profit in the same period last year.

“Net loss during Q1 2012 was due to flat production, large depreciation charges associated with increased capital expenditures and a double declining policy plus foreign exchange losses,” Delta said in a written statement.

Those factors offset the higher revenues Delta Dunia saw in the first quarter of this year, up by 12 percent to Rp 1.74 trillion from Rp 1.55 trillion over the January-March period last year.

Growing cost of revenue, at Rp 1.54 trillion during the first three months of this year, brought down Delta Dunia’s gross profit to Rp 199.17 billion, a 28 percent decline from Rp 278.85 billion during the first quarter of last year.

The company recorded a foreign exchange loss of Rp 91.88 billion due to the depreciation of the rupiah. Most of Delta Dunia’s mining service contracts are denominated in US dollars, but the company stated its income in rupiah.

Delta Dunia, through Bukit Makmur, saw a 1.8 percent increase in the overburden removal business to 76.7 million bank cubic meter (bcm) during the January-to-March period from 75.4 million bcm during the same period last year.

Coal production, however, declined 3.1 percent to 7.5 million metric tons in the first quarter of the year from 7.7 million metric tons in the same period last year.

The coal hauling business reported better growth at 9.8 percent to 2.4 million metric tons from 2.2 million metric tons.

The company also saw another setback due to higher than normal rainfall over the first quarter of the year, particularly at major sites, such as Lati and Kideco in Kalimantan, which hampered production activities.

Rani said that Delta maintained its target of 5 to 10 percent growth in coal production this year to between 36 and 38 million metric tons compared to 34.8 million tons last year.

“We are still optimistic about meeting the target. We shall see later, however, considering the possibility of bad weather in the fourth quarter,” Rani added.

Delta Dunia’s total assets were worth Rp 10.99 trillion, with liabilities and equity respectively at Rp 10.08 trillion and Rp 913.55 billion at the end of March. Cash and cash equivalents were Rp 1.12 trillion.

The company’s stock traded at Rp 410 a share on this week’s last trading day (Wednesday), up 9.33 percent from the previous day.

—JP/ Raras Cahyafitri