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For Berau, Coal Volume Surge Beats Price Dip
Francezka Nangoy | December 14, 2011

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Berau Coal Energy, the coal miner controlled by London-listed Bumi Plc, forecast revenue to rise 13 percent to $1.84 billion next year, betting that increased shipments will make up for a slight decline in the average selling price.

Berau’s average selling price in 2012 is estimated to be at $80 per ton, down from the $81 this year, president director Rosan Roeslani said. That decrease should be balanced by a rise in sales volume from 20 million tons this year to 23 million tons next year.

Based on calculations of the average selling price for this year and the amount of tons to be sold, revenue would total $1.62 billion.

In the first nine months of this year, Berau’s net income more than tripled from a year earlier to $112 million. Its selling price increased 32 percent, while volume rose 19 percent. Revenue rose to $1.21 billion in the January-September period, up 58 percent from a year before.

The company sells all of the coal it produces from its mines. By the end of November, the company had sold 18.5 million tons, and it aims to increase production to 30 million tons annually by 2014, Rosan said.

The company’s biggest market now is China, accounting for about 44 percent of its total sales, followed by Taiwan with 17 percent. China is the world’s largest consumer of energy, which also includes crude oil and natural gas.

“We are trying to accommodate more orders from India, because we estimate that by 2014 or 2015 demand for coal from India will surpass that from China,” director John Ramos said.

India is currently the company’s fifth-largest market, with 8.6 percent of total sales volume allocated to that country.

Rosan said about 60 percent of Berau’s production next year had been set on contracts, while 30 percent is for spot trading and 10 percent for potential buyers.

The company will also spend $140 million to $160 million on capital expenditure next year, all of which will be Berau’s own cash, Rosan and Ramos said.

“The capex is for hauling, roads and infrastructure in our site,” Rosan said, adding that the company would also fund port construction to boost transport.

Berau’s shares gained 4 percent to close at Rp 435 on the Indonesia Stock Exchange (IDX) on Wednesday.