BUMI targets sales volume to rise by 7%, coal price up 30% in 2017

Bumi Coal Mines in Indonesia - Photo by Bumi Resources

JAKARTA (TheInsiderStories) – PT Bumi Resources Tbk (IDX:BUMI), the country’s largest coal producer targets coal sales volume rise of 5-7 percent for 2017 and coal price increase of 30 percent for full year 2017.

The company maintains its target given encouraging results in the first quarter of 2017.

In the first quarter, the company reported net profit after non-controlling interest of US$88.05 million, increased fourfold from US$22.48 million in the same quarter in last year.

The company posted operating income of US$227.3 million, jumped from US$2.8 million in the same quarter last year, while consolidated net income increased by 230.8 percent to $134.3 million from US$40.6 million.

The average coal sales price (ASP) in the quarter jumped 35 percent to US$53.9 per ton from US$39.9 per ton, while earnings per share (EPS) increases four fold to Rp32 from Rp8 a year earlier.

Bumi’s coal mined was flat in the quarter at 20.2 million tons compared to the same quarter last year 20.2, due unusually heavy rainfall. Coal sales was also relatively flat at 21.0 million tons in in the first quarter compared with 21.4 million tons in the same quarter last year.

Bumi Resources owns 51% stake in KPC and 70% stake in Arutmin, two largest contributors to the company’s coal production.

BUMI has announced on April, 17 to launched $2.650 billion worth of rights issue and convertible bonds as part of its restructuring process.

Under the plan, Bumi will issue 28.75 billion units of new shares, representing 38.59 percent of the company’s enlarged capital and 9.13 million units of shares that will be converted into equity or mandatory convertible bonds (MCBs).

Bumi Resources said in a published announcement that it prices its rights issue and MCBs shares at Rp926.16 per unit. With this price, the company expects to raise US$2.011 billion from rights issue and US$639 million from MCBs, or a total of US$2.650 billion from both plans.

Bumi Resources has received shareholders approval to launch rights issue and MBCs in mid February this year, which will be the country’s biggest rights offering this year. The jumbo transaction is part of the company’s debt restructuring, which will see its debts reducing from US$4.2 billion to US$2.6 billion.

According to the rights issue plan, the holders of 100 unit of Bumi shares will be entitled to buy 78 series-A new shares a price of Rp926.16 per share and the holders of 100 existing shares will be entitled to buy 25 series-B new shares at a price of Rp826.16 per share.

Should shareholders declined to exercise their rights, then the shares will be bought by standby buyers, namely PT Samuel International and PT Danatama Capital Group.

Bumi Resources creditors are including China Investment Corporation (CIC), UBS, Axis Bank, and Castleford. They are expected to subscribe to the new shares as per their portions.

Recording date is set on June 8, 2017, followed by distribution of shares on June 9 and registration of the shares on the Indonesian Stock Exchange on June 12. (*)