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Higher Coal Output and Price Help Bumi Resources Post Profit Surge
Jakarta Globe | November 22, 2011

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Bumi Resources, Indonesia’s biggest coal producer, said profit rose 17 percent and revenue climbed 34 percent in the first nine months of this year on higher production and a surge in the commodity’s price.

The Jakarta-based company’s net income in the January-September period rose to $228.8 million from $195.5 million a year earlier, it said in a statement on Tuesday. Revenue surged to $2.86 billion from $2.13 billion.

In the nine-month period, production at Bumi Resources rose 10 percent to 47.2 million tons from 42.8 million tons a year earlier.

It sold 45.7 million tons of coal, up 2 percent from the 44.7 million tons sold in the same period last year. The average selling price rose 32 percent to $94 a ton.

Analysts in Jakarta said that many Indonesian coal companies, including Bumi Resources and state coal miner Tambang Batubara Bukit Asam, have benefited from an increase in the global price of the commodity so far this year. They blamed heavy rains as one reason for a slowdown in mining production across the archipelago — rains that do not seem to have affected Bumi Resources.

Dileep Srivastava, the director and corporate secretary of Bumi Resources, said the company was on track to reach its production target of 66 million tons of coal this year, with an average selling price of $93 a ton.

“Production cost is estimated at $40 per ton,’’ he said.

Also helping to boost its income, Bumi Resources recorded $124.98 million in gains from derivative-related transactions, compared to a loss of $35.76 million in the same period last year, Dileep said.

Bumi Resources and its subsidiaries, Arutmin Indonesia and Kaltim Prima Coal — which are all part of the Bakrie Group — are controlled by businessman Aburizal Bakrie, who is also chairman of the Golkar Party.

Earlier this month, the Bumi conglomerate made headlines when Nathaniel Rothschild, a wealthy British financier and part owner of Bumi Resources’ parent company, Bumi Plc, criticized the company’s corporate governance and demanded “closer evaluation and scrutiny.”

Shares in Bumi Resources rose 2.4 percent to Rp 2,125 on the Indonesia Stock Exchange (IDX) on Tuesday. They have fallen 29.7 percent this year compared with a slight increase of 0.9 percent in the main stock index.