Adaro 1H Profit More Than Doubled - The Indonesia Today

PT Adaro Energy Tbk (IDX: ADRO) announces today its consolidated auditor-reviewed net income for the first-half (1H) ended June 30th 2011 rose two-fold to a record US$268 million.

It said first-half basic earnings per share (EPS) increased 104% to US$0.0084. The strong net income was bolstered by higher production volume combined with higher average selling price, despite an increase in the cost of revenue.

Net revenue, the company said, increased 36% to US$1.8 billion, while cost of revenue increased at a lesser rate of 34% to US$1.2 billion.

Adaro Energy’s President Director, Mr. Garibaldi Thohir said, “We are delighted with our record first-half earnings, driven by the solid performance of our operations and higher realized prices. The outlook for coal remains robust. We remain on track to achieve our full year production target of 46-48 million tons and deliver a healthy EBITDA of US$1.1-1.3 billion.”

"We had a record quarterly performance during the second quarter of 2011 due to the arrival of new and larger heavy equipment combined with our contractors’ good performance. Our production and sales volume for 1H of 2011 increased 5.5% and 10.4% to 22.81 million tons and 24.02 million tons, respectively, compared to 1H of 2010."

Garibaldi said Adaro's average selling price climbed 23% due to higher thermal coal prices. Meanwhile, cash cost (excluding royalty) increased 23% to US$40 per ton due to the higher planned strip ratio, longer overburden hauling distances and rising fuel costs.

However, EBITDA climbed 37% to a record US$626 million and the company continues to maintain a healthy industry-topping EBITDA margin of 35%.

In addition to the higher production volume and average selling price, Garibaldi said, the increase in net income is also a result of a foreign exchange gain of US$13.2 million and no goodwill amortization, compared to the US$26.6 million amortization incurred during the same period of last year.

"We continued to optimize our capital structure to sustain balance sheet strength and help our business grow, as measured by the improved gearing ratios of net debt to equity at 0.46x and net debt to EBITDA at 0.82x," he said, noting Adaro's liquidity remained strong with access to cash close to US$2 billion (including unutilized committed bank facilities).

As of June 2011, Adaro's total assets increased 15% to US$5 billion at the end of 1H of 2011 compared to 1H of 2010. Total liabilities increased 15% to US$2.8 billion compared to 1H of last year.