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Adaro revises down its EBITDA on DMO ruling

[Image credit ; Cipta Kridatama]
JAKARTA (RambuEnergy.com) – PT Adaro Energy, a diversified energy company, has revised down its earnings before interest, tax, depreciation and amortization (EBITDA) following the government’s decision to set a ceiling price for coal sold to domestic market under the domestic market obligation (DMO) scheme.

President Director of the company Garibaldi ‘Boy’ Thohir told reporters after the company’s annual shareholders meeting on Monday that the company now revised down the company’s EBITDA to US$1.1-US$1.3 billion from previously US$1.3-US$1.5 billion.

“We comply with the government’s regulation on DMO, in which coal price sold to the domestic market is set at a maximum of US$70 per ton,” he said. The DMO price is far lower than the international coal market price which is now hovering at around US$100 per ton.

The company also revised up its production target to 54-56 million tons, from 52-54 million tons set earlier. The higher production was made to compensate the lower-than-market coal price sold to domestic market.

On Monday, the company’s shareholders meeting also approved to distribute dividend of US$250 million, up 150% from 2016 financial results dividend.

In 2017, the company’s net profit reached US$536.44 million, up 57.4% from US$334.6 million in 2016.

The 2017 net profit increase was in line with a rise in sales, which increased 29% to US$3.2 billion from US$2.5 billion a year earlier. (*)

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