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nergy company PT Indika Energy is likely to experience growth challenges despite foreseeing increasing outputs from its main coal units this year amid falling coal prices in the global market.

Finance director Azis Armand said on Wednesday that the company expected at least 39.5 million tons in total coal production by year's end from its units, PT Kideco Jaya Agung and PT Santan Batubara.

Kideco, 46 percent controlled by Indika, is estimated to produce 37 million tons by year's end, an 8 percent increase from 2012. Meanwhile, Santan Batura is expected to produce around 2.5 million tons this year ' about the same amount it produced last year.

Santan Batura is a joint venture between publicly listed firm PT Harum Energy and listed PT Petrosea, Indika's subsidiary with 69.8 percent ownership of the parent company.

Indika also controls 60 percent and 85 percent shares of miners PT Mitra Energi Agung (MEA) and PT Multi Tambangjaya Utama (MTU), respectively. Both have yet to produce coal.

Azis said that MTU would start production in the second half of the year.

'MTU has a production license of 1.2 million tons,' he said after the company's annual general shareholders meeting.

In the shareholders meeting, Wishnu Wardhana was appointed president director, replacing Arsjad Rasjid, who now serves as vice president director.

Wishnu said that all of the company's coal units were already in contracts.

'Prices will be determined based on the index,' he said.

Wishnu said that Kideco assumed coal prices of between US$56 and $57 a ton this year, 17 percent lower than its selling price of $69 per ton last year.

In the first quarter only, Kideco's selling price dropped 20 percent to $60.4 per ton from $75.1 in the same period last year. Kideco produced 8.9 million tons of coal in the first quarter of the year, 10 percent higher compared to 8.1 million tons in the corresponding period of last year.

Kideco sells about 26 percent of its coal to the domestic market.

Indika booked $183.6 million in revenues in the first quarter of the year, up 15 percent from $158.9 million in the same period last year. Its net profits nosedived to $9.15 million in the first quarter of the year from $50.29 million in the same period last year, partly due to declining contributions from Kideco.

Azis said that Indika's declining net profits would continue to the end of the year.

Besides coal mining, the company also has a 51 percent stake in listed shipping firm PT Mitrabahtera Segara Sejati and 100 percent in PT Tripatra Engineering.

Shares in Indika, traded under the code INDY, closed at Rp 1,020 on Wednesday, a 0.97 percent drop from a day earlier.