Indonesian coal company, Geo Energy, has announced a profit for 3Q16 on the back of higher coal prices. According to the company’s latest quarterly results announcement, net profit hit US$7.5 million compared to a US$1.4 million loss in 3Q15.
Prices for 4200 GAR coal on the Indonesian Coal Index (ICI) have increased 77% so far this year from US$26.69 per tonne to US$47.20 per tonne (as at 4 November). The company reported coal sales of 1.8 million t over the quarter, hitting its monthly target of 0.6 million t.
“The strong uptrend of the ICI for 4200 GAR coal has been instrumental in boosting our cash profit per tonne to US$11.11 per tonne as of 30 September 2016, while our mining operations have become more efficient, thereby lowering our case cost of sales,” said CEO Tung Kim Hon.
Coal prices have been driven higher this year by increased demand for imported coal from China on the back of enforced domestic production cuts.
“China’s policy of reducing its domestic coal production by cutting the number of days allowed for coal mining from 330 to 276 days, has inevitably caused coal prices to rally,” Hon said. “This situation has shifted China to rely on imported coal to keep up with its energy demands.”
The company achieved record revenue of US$56.9 million in 3Q16, compared to US$5.2 million the year before. Revenue for the year to date, was US$90.2 million, a year-to-date increase of 493%.
Read the article online at: https://www.worldcoal.com/coal/15112016/geo-energy-reports-3q16-profit-on-higher-prices/