Bukit Asam (PTBA), the state-owned coal producer, maintains its position as the most profitable coal producer in Indonesia with higher net profit margin than companies like Adaro Energy (ADRO) and Indo Tambangraya Megah (ITMG). One, however, shall closely monitor operation of the 2×100 MW mine-mouth power plant in South Sumatra and other new projects.<\/p>\n

PTBA booked net profit of Rp2 trillion last year, slipped 1.5% from 2015. With earning per share of Rp952, PTBA is currently traded with PE multiple 11.5 only. Like peers, PTBA reported strong performance in the fourth quarter with sales revenue growth of 20.2% and net profit jump of 80% to Rp954 billion, slightly lower than total profit booked in the first nine months of 2016.<\/p>\n

With net profit margin (NPM) of 14.4%, PTBA maintained its position as the most profitable coal producer in Indonesia. Indo Tambangraya Megah (ITMG), for example, generated around 10% of NPM, while Adaro Energy (ADRO) was 13.2%.<\/p>\n

<\/a><\/p>\n

As you know, PTBA sold 20.7 million tons of coal last year, an increase of 9% from 2015 because its production also improved 12% to 17.7 million tons. PTBA\u2019s average selling price of coal, unfortunately, declined by 4.4% to Rp676,013 per ton from Rp707,052 per ton in 2015. Understandable because average reference price (HBA) of Indonesian coal was US$61.84 per ton last year, inched up 2.84% only from 2015 (US$60.13), mostly due to significant rally in the fourth quarter.<\/p>\n

So, one strong quarter was enough to justify PTBA\u2019s valuation last year. This year, PTBA\u2019s bottom lines will be affected by (1) strong price in the first quarter and (2) estimated higher volume for the whole year. HBA for first quarter 2017 is US$83.82 per ton, jumped 61.45% from the corresponding quarter of 2016, about the same with fourth quarter of 2016. tradingeconomics.com<\/a> recorded thermal coal price of US$81.85 per ton on Wednesday, representing 56.2% gain year-on-year.<\/p>\n

<\/a><\/p>\n

PTBA\u2019s sales volume for 2017, meanwhile, is targeted at 27.3 million tons, an increase of 30% from last year. Bear in mind, however, the biggest growth will come from the purchase of third party coal, which is expected to jump 152% to 3.03 million tons.<\/p>\n

One should also monitor closely PTBA\u2019s subsidiary PT Bukit Pembangkit Innovative, which operates mine-mouth power plant in Tanjung Enim, South Sumatra. Financial statement of PTBA pointed to significantly small sales revenues from the business even though its assets expanded further to Rp5.72 trillion. Looks like that the 2×100 MW power plant was not running at ideal capacity, while it is expected to boost PTBA\u2019s coal business. Last year, PTBA recorded sales revenue of Rp402.9 billion from its other business activities, including sale of power, briquettes, crude palm oil, kernel, healthcare service and rental, suggesting insignificant revenue from sale of power.<\/p>\n

Clarity surrounding the so-called Banjarsari mine-mouth power plant is needed if Bukit Asam wants to secure public support for its new power plant projects.<\/p>\n

*) Bahrul Qamar contributed to this article<\/p>\n

DISCLAIMER: NO POSITION IN STOCKS MENTIONED IN THIS ARTICLE<\/p>\n","protected":false},"excerpt":{"rendered":"

Bukit Asam (PTBA), the state-owned coal producer, maintains its position as the most profitable coal producer in Indonesia with higher net profit margin than companies like Adaro Energy (ADRO) and Indo Tambangraya Megah (ITMG). One, however, shall closely monitor operation of the 2×100 MW mine-mouth power plant in South Sumatra and other new projects.<\/p>\n","protected":false},"author":311,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":""},"categories":[4,5],"tags":[],"_links":{"self":[{"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/posts\/49695"}],"collection":[{"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/users\/311"}],"replies":[{"embeddable":true,"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/comments?post=49695"}],"version-history":[{"count":2,"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/posts\/49695\/revisions"}],"predecessor-version":[{"id":49700,"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/posts\/49695\/revisions\/49700"}],"wp:attachment":[{"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/media?parent=49695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/categories?post=49695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/yosefardi.com\/wp-json\/wp\/v2\/tags?post=49695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}