Adaro targeting sales volumns 54mt, preparing capex $125m in 2016

JAKARTA (TheInsiderStories) – Indonesia coal miner PT Adaro Energy Tbk (IDX: ADRO) targeting 2016’s sales volumen could reach up to 54 million tons from previous year 53.11 million tonnes. The company preparing capital expenditure up to $125 million and the operational EBITDA is expected to reach $450 million to $700 million.

“We expect Indonesia, other South East Asian countries and India will require more coal to ensure sufficient electricity to support their economic growth,” Adaro Energy’s President Director and Chief Executive Officer, Mr. Garibaldi Thohir, said in a press statement.

Last year, the net profit after tax of Adaro declined by 17 percent to $151 million and the revenues declined 19 percent year-on-year (yoy) to $2,684 million. According to the company, the global economic environment and its impact on coal prices presented the industry with significant challenges during 2015.

Chronic oversupply continues to weigh on the coal industry. On top of that, lower demand growth in China added downward pressure on coal prices. This situation impacted the average selling price, which declined 14 percent compared to 2014.

While, total coal production decreased by 8 percent to 51.46 million tonnes, slightly below the guidance of 52 to 54 million tonnes, recorded a 25 percent increase in coal production from our Balangan mine to 1.11 million tons. In the last quarter of the year, Adaro introduced a new product, a blend of Wara and Balangan coals, which was well received by customers in India and China.

At the end of last year, Adaro has refinanced a $400 million facility agreement of our mining services company PT Saptaindra Sejati (SIS) and a $160 million facility agreement of our barging and ship-loading company PT Maritim Barito Perkasa (MBP) with a more competitive rate and longer loan period.

Adaro also repaid $625 million of bank loans in 2015 and have reduced our net debt by 25 percent yoy to $865 million. The firm also have access to $762 million of liquidity, including $60 million in undrawn fully committed bank facilities.

“Our average debt repayment schedule for the next six years from 2016 to 2021 is at a manageable level of around $252 million per year,” Garibaldi said.

Table Financial Performance of Adaro in 2015

*As restated due to implementation of PSAK 24 (Revised 2013), “Employee Benefits” and reclassified due to implementation of PSAK 46 (Revised 2014).

The Financial Ratios

*As restated due to implementation of PSAK 24 (Revised 2013), “Employee Benefits” and reclassified due to implementation of PSAK 46 (Revised 2014).