Toba Bara sales edges down 1.4% in Q1, net profit up 96.2%

JAKARTA (TheInsiderStories) – PT Toba Bara Sejahtra Tbk (IDX:TOBA), a coal producer, booked sales of US$62.7 million in the first quarter of 2017, slightly lower by 1.4 percent compared to the same period last year. The coal sales volume was lower in the quarter, however the average selling price (ASP) was higher at US$57.2 per ton from US$46.8 per ton, hence its sales revenues only edged down slightly.

The company booked net profit for the period of US$ 10.2 million in the first quarter, surged 96.2 percent y-o-y from the previous year of US$5.2 million.

The reference Newcastle (NEWC) Index price rose 62.0 percent from US$50.3 in the first quarter 2016 to US$ 81.5 in the first quarter 2017, mainly on the back of China’s well-enforced supply cut policy implemented since April 2016. Throughout the 1Q17 period, the global coal price hovered within favorable range of US$75–US$ 85 levels, allowing for more stable coal market prospects for 2017.

As compared to the first quarter of 2016, in the first quarter 2017 the company registered higher margins such as gross profit margin, EBITDA margin, and operating profit margin due to continuous operational and cost management disciplines backed by higher yoy ASP.

The company produced 1.1 million tons of coal in the quarter, fell 26.7 percent from the same period last year of 1.5 million tons. “This was primarily due to the relatively strong seasonal wet weather conditions impacting the operational activity during the first quarter period,” the company said. (*)

Going forward, Toba Bara plans to continue to build well-diversified market destinations and customer base, maintaining product quality and timely delivery, as well as optimizing the current favorable coal price into the company’s ASP.

Total capital expenditure (Capex) for 2017 is estimated at US$60-65 million, of which 85%-90% will be allocated for the EPC phase of the power project, with the balance for the mining business, i.e. land acquisition, and infrastructure/heavy equipment. (*)

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