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View all search resultsCoal miner Adaro books 126 percent increase in net profit
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A backhoe loads tons of coal into a heavy-duty truck at Adaro Energy's site in Kalimantan. The company is planning to expand into a green-energy business starting this year through its subsidiary Adaro Power. (Courtesy of http://www.adaro.com//-)
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ublicly listed coal miner PT Adaro Energy booked a 126 percent annual increase in net profit to US$341 million in 2016 amid volatility in global coal prices, thanks to a 14 percent drop in cost of revenue to $1.84 billion.
Last year, the company saw a nearly 6 percent annual decrease in net revenue to $2.52 billion. Due to the lower revenue, the royalties to the government fell 6 percent year-on-year to $259 million. Royalties accounted for 14 percent of its total cost of revenue.
The drop in cost of revenue was also triggered by a lower strip ratio, a lower-than-expected fuel price and Adaro’s various internal efficiency measures.
(Read also: Adaro wants more power plants to shift core business)
“We have hedged approximately 10 percent of our fuel requirements for the year 2017 at prices below our budget to mitigate risks associated with oil price fluctuations in the coming year,” the company stated in a statement on Tuesday.
Moreover, Adaro’s operational earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 22 percent to $893 million year-on-year. The company plans to maintain the operational EBITDA at around $900 million to $1.1 billion in 2017.
Adaro also expects that it can produce around 52 million tons of coal in 2017, more or less the same with its production last year, with a capital expenditure of around $200 million to $250 million. (bbn)
