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ining services company PT Darma Henwa is optimistic that it will bounce back after continuously suffering financial losses since 2011 despite skepticism it would be difficult for the company to reduce the gap.

Newly appointed president director Wachjudi Martono said on Friday the company expected to resume posting profit by the end of this year.

He said the company was upbeat on meeting the revenue target of at least US$310 million, with an 8 percent profit margin from its five existing projects in Kalimantan after the selling or disposing of bad assets that contributed to the company'€™s losses last year.

'€œThe forecast has yet to take into account our upcoming projects,'€ he said after a general shareholders'€™ meeting.

'€œThe figure will increase once we confirm our next projects,'€ he added, while declining to disclose details of the next projects as they were still being negotiated.

Darma Henwa has five projects that have run since last year in Kalimantan from five different clients: a $340 million mining project from PT Berau Coal; a $2.65 billion mining project from PT Kaltim Prima Coal in East Kalimantan; a $2.1 billion mining project from PT Arutmin Indonesia in South Kalimantan; a $8.33 million coal haul upgrading project in Central Kalimantan from PT Tamtama Perkasa; and a $250 million mining project in North Kalimantan from PT Mitrabara Adiperdana.

He said high intensity rainfall forced the company, which served as a mining contractor for other companies, to halt production for days last year, in addition to landslides at some of the mining sites where it operated.

'€œMoreover, the coal industry saw volume increase last year, both in production and export, but had no increase in selling price,'€ he said, adding that selling price ranged around $58-$70 per ton last year, still below the economic price level for coal businesses.

All those factors brought the company'€™s revenue to $222.03 million last year, 33.7 percent lower than the $334.9 million a year before.

The company'€™s net losses hence went deeper to $51.74 million last year, compared to $41.42 million in net losses in 2012.

According to Wachjudi, the company has been undergoing asset revaluation since 2011 by selling or disposing of heavy machineries, earning a total of $134 million by the end of 2013.

Darma Henwa has also sold its shares in several companies, which according to Wachjudi were deemed unproductive.

Last year, the company divested 100 percent shares of Corfield Investments Limited and 93.47 percent shares of PT DH Energy, one of Darma Henwa'€™s subsidiaries, to Canoncom Limited and Lenette Limited, respectively.

Investa Sarana Mandiri analyst Kiswoyo Adi Joe said serving as a contractor and running its own mining had made Darma Henwa operate inefficiently and post losses, rather than profits.

'€œDarma is also suffering losses by owning shares at unproductive companies [on top of the bad assets it has sold]. It will be hard for the company just to cut its losses, let alone make profits,'€ he told The
Jakarta Post.

The Indonesia Stock Exchange recorded the price of the company'€™s shares (DEWA) has been stagnant at Rp 50 apiece since July 30, 2012. (dwa)