Bumi posts promising Q1 result

INDONESIAN producer Bumi Group has increased production and reduced costs in the first quarter as its PT Berau Coal Energy subsidiary struggles to return to profitability and prepares to split with the Bakrie Group and PT Bumi.
Bumi posts promising Q1 result Bumi posts promising Q1 result Bumi posts promising Q1 result Bumi posts promising Q1 result Bumi posts promising Q1 result

Copyright © 2011 Bumi plc

Lou Caruana

The group's operating loss for 2012 was $US757 million, with underlying losses of $52 million and underlying earnings before interest, tax, depreciation and amortisation of $365 million.

Annual revenue for the group was $1.5 billion, with free-on-board selling prices averaging $70.90 per tonne during the year.

But the company said the demand picture during the year was strong, with higher levels of Indian and Taiwanese sales.

Cost increases were mainly due to higher fuel prices and a slight increase in the stripping ratio as well as greater haul distances from certain mines to coal processing plants.

Bumi chief executive officer Nick von Schirnding said he was encouraged by improvements made in the first quarter.

The group increased production by 27% in the first quarter to 5.3 million tonnes compared to the previous corresponding quarter and reduced fuel costs to $8.40 per tonne in the quarter compared to $10.60/t in 2012.

“Production figures for the first quarter of 2013 are a reminder of the huge potential for profitable growth at Berau,” von Schirnding said.

“We have completed the first phase of an independent benchmarking study which shows that there are significant opportunities to cut costs and drive efficiencies.

“I am encouraged by the first quarter results which showed a significant increase in production year on year and a reduction in costs.”

The completion of the extensive review of the financial position of PT Berau marks the closing of an important chapter, according to von Schirnding.

“We can now draw a line under the past and move on,” he said.

“We have taken decisive steps to change out key management and are implementing changes to further enhance our controls and governance framework.

“We are focusing on achieving separation from the Bakrie Group and PT Bumi and we have a clear priority to drive shareholder value.

“Following the separation from the Bakrie Group we will have the benefit of a strong balance sheet and be well-placed to succeed as a leading coal producer focused on the growth markets of Asia.”

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