Indonesian Conglomerates & Australian Assets
A consortium comprising private equity firm EMR Capital (established by former Rio Tinto Ltd executive) and PT Adaro Energy Tbk, second largest coal group in Indonesia, have last week entered into a binding agreement to acquire 80% shares of the Kestrel underground coal mine in Queensland, Australia for US$2.25 billion from Rio Tinto Ltd.
BUMI’s Financials & Issues to Watch
Bumi Resources (BUMI), the largest coal group in Indonesia, booked net profit of US$373.25 million last year, skyrocketed from US$67.7 million in 2016, but mostly attributable to US$740.4 million gain on revaluation of assets. Share in net income of associates and joint ventures (mainly Kaltim Prima Coal and Arutmin Indonesia) did jump to US$206.6 million from US$84.25 million in 2016, but this was equal to interest and finance charges.
A Stronger Bayan Resources
Like other coal producers, Bayan Resources (BYAN) enjoyed strong performance last year with net profit of US$319.8 million against US$28.8 million only in 2016. Higher average selling price and sales volume of coal contributed to 92% jump in sales revenues to US$1.07 billion, while operating profit surged by 275% to US$447.5 million.
Freeport Negotiation: Rio Tinto Baggage (2)
Rio Tinto Ltd will soon get US$1.7 billion of cash from Glencore Pcl from selling its Hail Creek and Valeria coal project in Australia. The Company is now expecting to collect US$3.3 billion from Indonesian company INALUM for its future 40% interest in PT Freeport Indonesia. Negotiation is ongoing, while political dynamics ahead of next year’s presidential election might lead to further delays in concluding the deal.
Coal DMO on Bukit Asam
Some previously predicted that state miner Bukit Asam (PTBA) will be affected the most by capping of coal price under domestic market obligation (DMO) policy issued by the government this month. Their prediction was rooted in the fact that 51% of its revenues were generated from PT Perusahaan Listrik Negara and its subsidiary PT Indonesia Power last year.
Atlas Resources vs Noble Group
PT Atlas Resources Tbk (ARII), a coal producer listed on Indonesia Stock Exchange (IDX), has filed lawsuit against Noble Group Ltd, a global commodities trading firm listed on Singapore Exchange (SGX). Atlas seeks compensation of more than US$260 million.
Soeryadjaya, Thohir, & Provident Gain More Control over Finders/Wetar Copper
Eastern Field Developments Limited (EFDL), a special purpose vehicle jointly owned by Provident Capital Partners Ltd, PT Saratoga Investama Tbk, and PT Merdeka Copper Gold Tbk (MDKA), has secured 72.67% voting power in ASX-listed Finders Resources Limited, which controls Wetar copper project in Maluku province.
Sawit Sumbermas: FY17 Results & Outlook
Sawit Sumbermas (SSMS) booked net profit of Rp787 billion or Rp82.63 per share last year, an increase of 33% from 2016. The Company’s sales revenue grew by 19% to Rp3.24 trillion, while operating profit increased by 33% to Rp1.19 trillion. Financials of the company, especially transactions with related parties, however, have to be closely monitored.
Indika Energy (INDY): FY17 Results & Outlook
Indika Energy (INDY) booked net profit of US$335.4 million last year against losses of US$67.6 million in 2016, mostly due to one-off gain from revaluation of assets (US$384 million) and improvement of operating environment, especially higher average price of thermal coal.
Coal Journal & Baramulti Suksessarana
Thermal coal recovered slightly to US$92.73 per ton Thursday (Mar 15) to represent year-on-year gain of 14%. On Friday, however, the commodity retreated to US$92.05 per ton. Some are worried that coal will break the psychological level of US$90, but others expect short-term support from China and USA data.