Tag: ADRO

Coal Stocks So Far

Shares of coal producers listed on Indonesia Stock Exchange (IDX) ended mostly lower ground Tuesday (Oct 9). Year-to-date, the stocks are mixed. Adaro Energy (ADRO), the second largest group, lost 5.1%, while Bumi Resources (BUMI), the largest group, fell 25%. Bukit Asam (PTBA) and Bayan Resources (BYAN) are big winners, gaining more than 80% respectively. 

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Merger & Acquisition Updates

PT Rehabilitasi Lingkungan Indonesia, a company owned 100% by coal giant Adaro Energy (ADRO), has notified the Business Competition Supervisory Commission (KPPU) regarding its plan to acquire a company controlled by Kalla Group. Phapros, pharmaceutical subsidiary of state-owned trading firm Rajawali Nusantara (RNI), meanwhile, has acquired PT Lucas Djaja Group.

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Stronger Q2 for Adaro

Adaro Energy (ADRO), second largest coal producer in Indonesia, booked net profit of US$195.38 million in the first half of 2018, down 12.1% from the corresponding period last year on squeezed margins. The Company’s sales revenue grew 3.9% to US$1.61 billion in the first half, but operating profit dropped 12.4% to US$391.44 million.

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Market This Week

Another steep decline (8.5%) in the Turkish lira on Friday (August 16) pushed emerging market equities lower and kept other world markets cautious, overshadowing hopes that an upcoming U.S.-China meeting would resolve concerns over trade tariffs, Reuters reported.

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Corporate Actions to Watch

Coal miner Adaro Energy (ADRO) with EMR Capital are now in process of acquiring 80% stake in Kestrel (Australia), a coking coal miner, from Rio Tinto. Coking coal has better prospect that thermal coal as its global supply lacks from thermal. Its price is higher and providing higher profit margin.

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Mining Giant Sinarmas: Results & Outlook

SGX-listed Golden Energy Resources Ltd (GEAR), controlled by Sinarmas Group, booked net profit of US$62.95 million last year, skyrocketed 186% from 2016, thanks to stronger price of thermal coal. Combined with its ownership in Berau Coal Energy (BRAU), Sinarmas Group is currently third largest coal producer in Indonesia behind Bumi Resources (BUMI) and Adaro Energy (ADRO), and ahead of Indika Energy (INDY).

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Adaro Energy: FY17 Results & Outlook

Coal miner Adaro Energy (ADRO) achieved strong financial position in 2017 on the back of efficient and reliable operations in an improving coal price environment. The Company’s core earnings jumped 62% to US$646 million last year from US$398 million in 2016. Net revenue rose 29% to US%3.26 billion, while cost of revenue grew 15% to US$2.1 billion.

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Resources Windfall & Fiscal Sustainability (2)

Adaro Energy (ADRO), one of the largest coal producers in Indonesia, paid out US$335.64 million of royalties to the State last year, an increase of 33% from 2016. The Company also paid out corporate income tax and final income tax of US$515.5 million, skyrocketed from US$155.5 million in 2016. All of these were attributable to significantly higher average price of coal last year.

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Robust Investment Outlook (12)

The Japan Credit Rating Agency (JCRA) has just upgraded Indonesia’s rating to BBB from BBB-, which might lead to higher investments from Japan in the coming years. A more friendly policy environment, meanwhile, is expected to boost investments in manufacturing, including mineral processing, and tourism.

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Stocks to Watch

Investors were focused on buying cigarette, cement, coal, and retail stocks in the first week of trading this month as the sectors are expected to experience positive growth. Cigarette producer HM Sampoerna (HMSP) gained 3.2% on Friday last week and became the prime mover for market gain. HMSP gained 2.5% year to date, while its peer Gudang Garam (GGRM) only rose 0.56%.

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