State-controlled mining company PT Bukit Asam has reported increased profits despite a year of falling coal prices.
The publicly listed miner announced that the company’s net profits had increased by 9 percent to Rp 2.04 trillion (US$153.9 million) during the January-December period in 2015, from Rp 1.86 trillion in the previous year.
Meanwhile, total revenues rose by 5 percent to Rp 13.72 trillion by the end of the year.
The company’s coal production was up 18 percent to 19.28 million tons from 16.36 million tons last year, while its sales were up 6 percent to 19.1 million tons, the company’s recently published statement revealed.
Domestic sales increased by 8 percent to 10.05 million tons while its exports were up 5 percent to 9.05 million tons, making up 47 percent of the company’s total sales volume.
Meanwhile, Bukit Asam’s average selling price (ASP) during the year, according to the company’s press statement, decreased by 3 percent to Rp 707,052 per ton to Rp 723,635 in 2014.
Coal prices have steadily declined in the past few years, amid oversupply and declining demand from major coal importer China. The situation has led to steep declines in the profits of Indonesian coal producers.
Bukit Asam corporate secretary Joko Pramono said that the company was optimistic that it would reach its target at the end of the year to increase sales by 52 percent to 29 million tons.
“If you see from our performance — in terms of operation and sales — it all increased. In 2016, we will continue to work together with PT KAI [state-train operator PT Kereta Api Indonesia] to support the synergy between state-owned enterprises,” he said.
Bukit Asam revealed that the volume of coal transported by rail increased by 6 percent to 15.8 million tons last year thanks to the opening of the Tanjung Enim-Prabumulih double-track line operation.
PT KAI is expected to increase this cargo volume by 50 percent this year to 23.7 million tons with additional locomotives and train cars.
Meanwhile, the company is seeking to maintain its cost efficiency programs as it predicts that commodity prices will continue to decrease this year.
Bukit Asam managed to cut its production costs by 10 percent to Rp 356,866 per ton from Rp 394,784 per ton. The company’s stripping ratio — the ratio of the volume of waste material that must be removed to retrieve coal — stood at 4.48, meaning that it had decreased from the previous year’s 4.69.
The stripping ratio is one of the determining factors in miners’ production costs.
“We will continue the success of 2015 by involving strategies that will strengthen us. We hope that we will go through 2016 in a better condition, that we will continue to evaluate every quarter,” Joko said.
Australia’s Newcastle coal price, an Asian benchmark, has dropped to $51.29 per metric ton, as estimated by Reuters in late February. While Indonesia’s coal reference price (HBA) had dropped to $50.92 in February from $53.20 in January.