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Coal miner Adaro’s profit falls 17 percent in Q1 as coal prices slump
Adaro's profit shrank to $98.17 million in the Jan-March period amid falling coal prices and slumping demand.
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Coal miner PT Adaro Energy president director Garibaldi Thohir (center) talks to journalists in Jakarta on April 23, 2018. Adaro’s profit shrank by 17.36 percent year-on-year (yoy) to US$98.17 million in the first quarter amid falling coal prices and slumping demand in Asia. (Antara/Sigid Kurniawan)
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oal miner PT Adaro Energi’s profit shrank by 17.36 percent year-on-year (yoy) to US$98.17 million in the first quarter amid falling coal prices and slumping demand in the coronavirus-ridden Asian economy.
The publicly listed coal miner, which was the most profitable company of its kind last year, booked an 11 percent yoy sales decline to $750 million in the first quarter, according to Adaro’s latest financial report released on Friday.
Read also: Indonesia’s largest power plant on schedule to operate next year
“Our performance in this year's first quarter reflects the operational excellence of our core coal assets as we recorded solid production volume amid the difficult market condition," Adaro president director Garibaldi Thohir in a statement on Friday. "In this challenging time for the global economy and the coal market, we continue to improve our efficiency, ensure discipline in spending and maintain a solid balance sheet."
Adaro’s revenue fell, as its higher sales volume was offset by falling prices. The company’s yearly sales volume rose by 8 percent to 14.39 million tons. The price of coal fell by a sharper 27.3 percent yoy to $66.6 per ton in the Jan-March period, based on Indonesia’s coal benchmark prices (HBA).
The company’s costs also declined by 5 percent to $552 million amid reduced mining activity and fuel consumption as Adaro implemented cost control measures.
Read also: Indonesia's coal giant ventures deeper into renewable energy
The global demand for coal collapsed earlier this year as businesses and industries around Asia – the world’s largest coal market – suspended their businesses at the behest of their respective governments following the COVID-19 outbreak.
Adaro, like other Indonesian coal miners, faces export risks over India’s recently extended lockdown. The South Asian country is Indonesia’s second-largest coal buyer behind China.
The company, which is traded on the Indonesia Stock Exchange (IDX) under the stock symbol ADRO, fell 2.12 percent on Friday. The benchmark Jakarta Composite Index (JCI) fell 0.14 percent.
