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Adaro Energy’s 2013 profit drops on lower coal prices

Adaro Energy, one of Indonesia’s largest coal miners, posted a sharp decline in profit last year on falling global coal prices.

Net income fell 40 percent to $229 million in 2013 from a year earlier, while revenue fell 12 percent to $3.3 billion, the company said in a filing to the Indonesia Stock Exchange on Monday.

“The decline is mainly due to lower revenue from a softer ASP [average selling price],” said Garibaldi Thohir, president director and chief executive at Adaro, in a statement.

Adaro said that the average coal selling price at Adaro declined 19 percent last year, without mentioning the price. Corporate secretary at Adaro Devindra Ratzarwin did not respond to calls and text messages from Jakarta Globe.

Adaro’s average coal selling price was at $57.36 per metric ton last year, according to Jakarta Globe’s calculations. The company did not confirm the number.

Adaro sold 53.5 million metric tons of coal in 2013, up 10 percent from a year earlier. Meanwhile, its overseas sales fell 5 percent to $2.4 billion.

Overseas sales accounted for three quarters of the company’s total revenue, while domestic sales made up the remainder.

By government regulation, coal miners operating in Indonesia have to sell some of their coal to the domestic market.

Adaro, with mines in Kalimantan, produced 52.3 million tons of coal last year, an increase of 11 percent from 2012. Kalimantan is rich in natural resources including coal and crude oil.

Falling coal prices in 2013 have lowered the profitability at other coal mining companies.

State-controlled coal miner Bukit Asam posted a 37 percent decline in profit to Rp 1.83 trillion ($161 million) last year, while its revenue dropped 3 percent to Rp 11.21 trillion. Bukit Asam’s average selling price was $55.41 per metric ton last year, a decline of 17 percent compared to 2012, the company announced in late February.

Indo Tambangraya Megah, the local coal mining unit of Thailand’s Banpu, posted a 47 percent fall in profit to $230 million last year while its revenue declined by 11 percent to $2.18 billion.

Source: JakartaGlobe