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Coal mining giant Bumi records 97 percent plunge in profit
Indonesia’s largest thermal coal miner, PT Bumi Resources, booked a US$6.84 million profit in 2019, down 97 percent from the previous year's $220.4 million, pinched between falling coal prices and higher fuel-related costs.
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A haul truck passes a coal mining area in South Kalimantan that is operated by mining company PT Arutmin Indonesia, a subsidiary of Bumi Resources. (Courtesy of arutmin.com/-)
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ndonesia’s largest thermal coal miner, PT Bumi Resources, booked a US$6.84 million profit in 2019, down 97 percent from $220.4 million in the previous year partly due to falling coal prices and higher fuel-related costs.
The publicly listed company’s revenue only increased 0.06 percent year-on-year (yoy) to $1.11 billion in 2019 even though sales volume – largely driven by subsidiary Kaltim Prima Coal (KPC) – rose 9 percent to a “record high” 87.7 million tons over the same period. Slumping coal prices severely hurt the company’s profit margins.
Bumi’s cost of revenue grew 0.6 percent to $1 billion, “due largely to higher costs, largely oil price,” according to BUMI corporate secretary Dileep Srivastava.
He also said the company had produced 14.3 million tons of coal between January and Feb. 20 this year with the aim of producing 7.5 million tons in March “and hopefully in April as well if we can.”
Bumi, like other coal miners around the world, is uncertain about the global coal demand in 2020. The uncertainty mainly arises from indefinite lockdowns in Asian economies, which consumes almost three-fourths of the global coal supply, as the region works to contain the spread of COVID-19.
“We intend to review the situation arising from the global pandemic next month and will fine tune as appropriate,” said Srivastava.
Company stocks, traded at the Indonesia Stock Exchange (IDX) as BUMI, were unchanged on Tuesday, although the benchmark Jakarta Composite Index (JCI) rose 1.68 percent at the close of afternoon trading.
