Indo Tambangraya Megah Tbk PT : Gaining Increased Coal Price Momentum, ITM Net Income Doubles

23 May 2017 10:30

The company successfully gained the momentum as the coal price rose significantly in the previous quarter.

PT Indo Tambangraya Megah Tbk. in the first quarter of 2017 managed to maintain its strong performance in the previous quarter. The company successfully gained the momentum as the coal price rose significantly in the previous quarter to obtain sales contract for the beginning of the year.

In the first quarter of 2017 the company achieved an average coal price of USD 67.5 per ton or 42% higher than USD 47.7 per ton in the same period last year. We expect that the coal price will move steadily in the second half of the year.

The company in the first quarter of the year recorded a higher EBIT by 132% at USD 89 million year-on-year, from USD 38 million in the same period last year. Net income rose significantly by 148% at USD 57 million from USD 23 million in the same period last year. The company recorded sales revenue of USD368 million while gross profit margin was booked at 31%.

By the end of the first quarter of 2017, the company's total assets were at USD 1,292 million. The company has total equity of USD 866 million and zero debt, and earning per share in this period was USD 0.05.

Throughout the first quarter of 2017, the Company produced 5.4 million tons of coal as much as its total sales volume of 5.4 million tons shipped to Japan (1.3 million tons), China (0.9 million tons), Indonesia (0.8 million tons), Thailand (0.6 million tons), South Korea (0.5 million tons), India (0.5 million tons) and other countries in East, South, and Southeast Asia.

For 2017, production is targeted at 25.5 million tons while our sales volume target has been set at 27 million tons, of which 77% has been sold.

The Company will continue to improve productivity by, for example, optimizing mine infrastructure and maximizing processes such as accelerating barging cycle time. ITM will endeavor to continue to stay ahead of leading market trends and remain flexible both in the short term and long term to maximize reserves value. The Company is executing several strategies to capture margins across the coal value chain, for example, using more internal contractors and applying improvement in fuel procurement and logistics in order to get the most possible efficient cost.

In addition, the Company is expanding its core business by investing in power business in order to capture opportunities from the growing electricity demand nationwide.

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