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Adaro Energy sees profit rise despite lower coal prices
Coal mining company Adaro Energy has increased its net profit to US$128.79 million in the first half of the year, up 3.3 percent from the same period last year, despite lower thermal coal prices.
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A backhoe loads coal onto a heavy-duty truck at Adaro Energy's mining site in Kalimantan. (Courtesy of http://www.adaro.com//-)
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oal mining company Adaro Energy has increased its net profit to US$128.79 million in the first half of the year, up by 3.3 percent from the same period last year, despite lower thermal coal prices.
The second biggest thermal coal producer in Indonesia posted a relatively flat sales volume at 27.1 million tons. As prices were 17 percent lower than in 2015, the company saw its revenue drop by 16 percent in the first half of the year.
However, an efficiency program and a lower stripping ratio resulted in a 21 percent reduction in the cost of revenue, allowing the company to increase its gross profit margin to 25.7 percent from 21.4 percent last year. The net profit margin increased to 10.5 percent from 8.5 percent.
(Read also: Indonesia can apply clean coal technology to reduce emissions)
"We are pleased to see the recent improvement in thermal coal market dynamics on the back of supply rationalization in major coal producing countries. We continue to believe the current market downturn is cyclical and that the long-term fundamentals for coal remain intact," president director Garibaldi "Boy" Thohir said.
The company’s strategy to add energy production to its business portfolio would yield significant growth, said Body, adding that the company’s subsidiary PT Bhimasena Power Indonesia had secured financing for the Batang geothermal power plant.
The 2-gigawatt power plant is slated to enter operation in 2020 and will supply electricity to state-owned electricity company PLN for 25 years. The total initial outlay is $4.2 billion, $3.4 billion of which will come from the Japan Bank for International Cooperation (JBIC) – a consortium of nine Japanese commercial banks. (bbn)
