Press Release

Rising Coal Prices Could Compensate the Drop in Sales for PT Bukit Asam Tbk 

 

by: Wuwun Nafsiah 

 

JAKARTA - PT Bukit Asam Tbk (PTBA) will acquire new mines in Sumatra and Kalimantan. Now, PTBA has been doing the review process for 14 mining areas, some of which will be continued into the stage of due diligence. 

Analyst of Sucorinvest Central Ghani, Andi Wibowo and Gunawan, said that the coal industry in the next two to three years has a good prospects. 'This acquisition will increase the coal production and reserve of PTBA,” said Andi, Tuesday (5/13).

 

Andi said that PTBA is a competitive coal issuer in rising production. He guessed, PTBA will only reduce the coal production in the second half of this year, if coal price back down.  Analyst of Kresna Securities, Devinna Kristanto, in her research on April 29, 2014, mentioned that the performance of PTBA in the first quarter of 2014 was match with her prediction. Revenues of PTBA grew 11.4% year-on-year (yoy) to Rp 3.1 trillion and net profit rose 8.7% to Rp 536.3 billion. 

 

The increasing revenues of PTBA was supported by the average selling price of coal by 19.5% to Rp 733,000 per ton. Although on the other hand, coal sales of PTBA down 6.7% to 4.2 million tons.

 

Analyst of Onix Sekuritas, Bagus Hananto, in his research on April 28, 2014, stated that the coal price increase could compensate the decline in PTBA sales volume on the first quarter. However, the performance of PTBA was still match with the projection.    

Andi predicted that the coal price will rise. “Coal had passed it lowest price,' said Andi. He guessed that the coal price this year and next year respectively will be US $ 85.5 and US $ 86.5 per ton. These prices are higher than last year's price of US $ 84 per ton. The average coal selling price of PTBA was predicted to be Rp 829,570 per ton.

 

Fortunately, PTBA has subsidiaries in the business of Pembangkit Listrik Tenaga Uap (PLTU) which also absorb coal as its fuel. “So even though the subsidiaries of PTBA in the coal field were loss due to price drop, at least subsidiaries in PLTU field were benefitting,” said Andi. He said, China will still remain as coal main importer for Indonesia. “China still needs to create replacement technologies that are more environment friendly,” said Andi. 

 

Andi was optimistic that sales of PTBA this year will reach about Rp 11.7 trillion and Rp 11.9 trillion next year. Meanwhile, the average selling price (ASP) of PTBA coal was estimated to reach Rp 829.570 per ton in 2014.

 

Bagus estimated that PTBA will continue to improve the capacity of transport by adding carrier train and cargo unloading port. On April 2014, PTBA has been already brought in 600 railway carriages to increase capacity up to 17.9 million tons this year, higher than last year which was 12.8 million tons. Bagus projected that revenue of PTBA this year could reach Rp 12.5 trillion or up 11.6%. Meanwhile, net profit of PTBA was forecasted to grow 5.5% to Rp 1.9 trillion in 2014. Bagus and Andi suggested share buy for PTBA with target price respectively Rp 14,800 and Rp 11,900 per share. Devinna also recommended share buy for PTBA with target price of Rp 12,400 per share. Yesterday, PTBA price rose 2.22 % to Rp 10,375 per share.

 

Source: Kontan, May 14, 2014