Coal mine - Photo by Adaro Energy
JAKARTA (TheInsiderStories) – Indonesian coal miner, PT Adaro Energy Tbk (IDX: ADRO) prepared capital expenditure up to US$600 million for this year, said the company on Tuesday (03/05). The funds will be used for the company’ business development.
This year, Adaro targets coal production around 56 million tons (MT) of coal and income before interest, tax, depreciation and amortization $1.2 billion. Throughout 2018, the miner sold 54.39 MT of coal to Southeast Asia (40 percent), East Asia (30 percent), India (14 percent), China (11 percent), and the rest to other countries five percent .
The company’ combined strip ratio for fourth quarter (4Q) 2018 reached 4.59 times, reaching 5.06 times for 2018. These results slightly exceeded the guidelines set at 4.9 times.
Adaro also recorded an increase in coal production of four percent to 54.04 million tons. The production and sales contributed to the miner’ operating income which rose 11 percent from $3.26 billion to $3.62 billion.
However, the rising income did not help ADRO’ net profit which fell 13.56 percent to $417.72 million from 2017 at $483.23 million. The reason is that the company’ main burden rose from the position of $2.12 billion to $2.41 billion.
Operating expenses also rose from $183.65 million to $194 million. Other expenses also increased from $6 million to $124.3 million. The increase in cost of revenue was due to an increase in stripping ratio, volume, price of fuel oil, and payment royalties to the Government of Indonesia as the average selling price increases.
Good weather conditions in third quarter of 2018 and high prices led to increased cover stripping activities at Adaro Energy‘ mines and resulted in an increase in stripping ratio. The company’ fuel consumption rose 15 percent, while fuel costs increased 40 percent due to increasing of operational activities and global fuel prices.
For management of fuel price fluctuations, the unit of PT Saratoga Investama Sedaya Tbk (IDX: SRTG) hedges around 20 percent of fuel needs in 2018 at prices lower than the budget.
US$1: Rp14,000
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