JAKARTA (TheInsiderStories) - PT Adaro Energy Tbk (IDX:ADRO), a diversified energy company, posted net profit of US$398 million in 2016, up 35% from previous year, reflecting the strength of the company’s after-tax earnings derived from its solid core business. The net profit rise was partly driven by falling cost of revenues.
The net profit (core earnings) excluded among others US$91 million amortization of mining properties, US$197 million gain on acquisition, US$110 million impairment of goodwill, and US$24 million impairment of mining properties, it said.
In 2016, Adaro posted revenues of US$2.524 billion, a 6% decline from previous year. In the year, the company, however, recorded an 8% lower average selling price compared to the same period last year but its sales volume increased slightly to 54.1 million tonnes (Mt) in 2016.
Adaro’s coal production in 2016, including 0.2 Mt from Adaro MetCoal (AMC), totaled 52.6 Mt. This was still within the company’s 2016 production guidance of 52-54 Mt.
Its bottomline was boosted by a decrease of the cost of revenues by 14% to US$1.839 billion due to a lower strip ratio, continuous efforts to boost efficiency, and a lower than expected fuel price. Its strip ratio for the year was 4.45x, slightly below its guidance of 4.71x due to above average rainfall at our operations.
“We have hedged approximately 10% of our fuel requirements for the year 2017 at prices below our budget to mitigate risks associated with oil price fluctuations in the coming year,” it said.
Adaro’s 2016 Financial Highlights:
- Operational EBITDA, excluding non-operational accounting items, increased 22% to US$893 million year-on-year. Adaro said it beats its operational EBITDA guidance of US$450 million to US$700 million due to a continued focus on cost discipline and efficiency.
- Adaro maintained a strong liquidity of US$1,157 million, providing flexibility and support against the volatile markets conditions.
- Its balance sheet continued to improve with net debt to last 12 months operational EBITDA of 0.42x and net debt to equity of 0.10x.
Adaro Energy’s guidance for 2017:
- Production: 52 million tonnes to 54 million tonnes
- Blended strip ratio: 4.85x
- Operational EBITDA: US$900 million to US$1.1 billion
- Capex: US$200 million to US$250 million
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