Bukit Asam to Acquire Mining Service Firm
Bukit Asam is considering acquiring a mining service company to help the state-run coal miner lower costs amid dwindling commodity prices. The acquisition will be made through its subsidiary.
Bukit Asam corporate secretary Joko Pramono told The Jakarta Post over the phone that the company was looking to establish its own mining service unit to be synergized with its coal mining, through an acquisition which will be carried out in January by one of its subsidiaries.
“By having our own mining services, we hope we can maximize our efficiency as low coal prices are expected to continue through next year. At first the unit will solely serve our own mining business, but we will not limit the opportunity to offer our services to third parties in the future,” Joko said.
“We can yet disclose how much investment will be disbursed to acquire the company, as we are currently still studying the plan, but we will announce the transaction once it has concluded early next year.”
Bukit Asam managed to boost sales by 18.96 percent year-on-year to
Rp 9.65 trillion (US$782 million) and net profits by 27.42 percent to Rp 1.58 trillion between January and September.
This stood in contrast to the company’s first nine-month financial achievement a year ago, when its revenues dropped by 6.88 percent to Rp 8.12 trillion and net profits plunged even deeper, by 43.38 percent to Rp 1.28 trillion, spurred by dwindling commodity prices.
The company attributed the increase to its efficiency strategy, namely by building power plants to supply its own concessions, and through a branding strategy, which helped the company book about 19 percent increase in its average selling price (ASP).
Next year, Joko said the company targeted to book a 15 percent increase in its annual sales.