Jakarta. Indonesian state-controlled coal miner Bukit Asam’s profit declined during the first half of the year, dragged by a decline in domestic sales and persistently weak coal prices.
In a listing on the local stock exchange on Wednesday, Bukit Asam reported a 31 percent fall in profit to approximately Rp 795 billion ($59 million) in profit in the first half of the year from Rp 1.2 trillion in the same period last year.
The state miner’s revenue contributed equally by exports and domestic sales saw meager growth at 1.6 percent to Rp 6.5 trillion from Rp 6.4 trillion last year as sales volumes rose by a slight 2 percent to 9.03 million metric tons.
Much of the company’s woes during the six-month period stemmed from the continued decline of coal prices globally, which dragged the average selling price of Bukit Asam by 3 percent to Rp 703.005 per ton from Rp 726.766 per ton in the same period last year.
On top of that, Bukit Asam saw a steep decline in domestic sales between January and June despite an increase in coal exports volume. Domestic sales fell 10 percent to 4.62 million ton, making up 51 percent of the miner’s total sales. In comparison, exports which are mostly to
Taiwan and Japan, rose 20 percent to 4.41 million ton.
“Bukit Asam’s net profit in the first half is roughly in line with our expectations. We believe that the stronger performance in the second quarter is mostly due to lower operating costs compared to the first quarter, which have increased gross and operational margin,” said Ariyanto Kurniawan an analyst from Mandiri Sekuritas, in a memo to investors on Tuesday.
“Even though there was stronger growth in the second quarter, we believe that [there is] outlook for revenue in the short-term because of weak commodity prices,” he said, recommending a “neutral” stance on Bukit Asam’s stocks.
Bukit Asam targets to boost sales volume by 33 percent to 24 million ton by the end of the year. To achieve that goal, the state miner recently increased the capacity of its port in Bandar
Lampung, Lampung to 25 million ton from 13 million ton last year.
Joko Pramono, corporate secretary at the state miner, said in a statement on Wednesday that the company is also working to grow its export sales, assessing countries such as Cambodia, South Korea, Sri Lanka, Bangladesh and Vietnam as potential export destinations.