JAKARTA (TheInsiderStories) - PT Adaro Energy Tbk [IDX:ADRO], a diversified energy company in Indonesia, sets coal production target at 52-54 million tons in 2016, slightly higher than 2015 realized coal production of 51.46 million tons (MT).
Last year, the actual coal production was lower than the company’s target of 52-54 MT and also 8 percent lower than coal production in 2014.
The company said the lower realized production in 2015 was due to a “combination of chronic oversupply of coal in the market and slower demand growth in main coal consuming countries.”
In the fourth quarter of 2015, Adaro produced 11.64 million tonnes (Mt) of coal from both PT Adaro Indonesia (AI) and PT Semesta Centramas (SCM), 19 percent lower compared to the same period in previous year.
Adaro sold 11.91 MT of coal in the fourth quarter, 19 percent lower compared to 4Q14. Total sales for full year 2015 was 53.11 MT, 7 percent lower compared to full year 2014, as market difficulties persist.
“We expect the coal market to remain challenging in the near term, and are guiding the market for flat production in 2016 of 52 Mt to 54 Mt,” it said.
The company’s board expects Adaro Energy’s coal cash cost to further decline to US$26 - US$28 per ton as oil price continues to weaken and a lower blended average strip ratio of 4.71 times.
It expects full year 2016 EBITDA to be around US$450 million to US$700 million and maintain a low capital expenditure of US$75 million to US$100 million for the year.
“We will continue to execute efficiency across the Group’s operations, improve productivity, preserve cash and implement prudent capital spending,” it said. (*)