MARKETS

Straits Asia posts record profit

STRAITS Asia Resources has increased its full-year net profit for 2009 by 7% to a record $US133.5 million with a stronger contribution from the Jembayan coal mine in Indonesia.

Lou Caruana
Straits Asia posts record profit

Jembayan increased production by 30% over the year to 6.5 million tonnes. Steady support from the Sebuku mine also helped the company increase production to a total of 8.5Mt of coal for the year and sales of 92Mt.

Sales revenue for the year increased by 7% to $748.4 million.

At year-end, Straits Asia had $56 million in cash and $207 million of bank debt.

Jembayan’s record production and sales figures were achieved against the backdrop of a decisive recovery from the load-out problems that occurred in October 2009 and the effective implementation of practical supply-chain solutions.

Straits Asia is working on ways to improve the total infrastructure capacity of the mine and deliver loading efficiencies and cost savings with the potential to handle higher production volumes.

Sebuku’s production of 2Mt for the year was in line with expectations.

Over the year, unit costs averaged $42.9 per tonne at Jembayan and $33.7/t at Sebuku.

“While both these numbers are higher than the FY08 figures, they were in line with Straits Asia’s targets and represent a positive achievement given the restricted production potential at Sebuku (pending the issue of the boundary approval) and also given the load-out incident at Jembayan that disrupted the last quarter of operations,” the company said.

Significant exploration work continued at Jembayan and Sebuku throughout 2009. Final analysis of the results of the program has begun and the company expects to announce an updated, full JORC resource and reserve statement in due course.

“Straits Asia has used the experience of the past year to lock in new contracts with reliable end users that will ensure that its targeted production increases over the next few years will have ready buyers,” the company said.

“The recent increase in coal prices will benefit the group’s average selling prices for 2010 and, with its solid balance sheet and strong assets, the group is looking confidently at 2010.”

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