Harum Energy 11% in COK

Remember this remark from  Harum energy back in June ,they  already hold 11% of COK .
Harum Energy aims to acquire
new coal mines for $450
million.

Publicly listed coal miner Harum Energy is preparing around US$450 million to acquire new coal mines with a minimum reserve of 50 million tons each to expand its business portfolio.

Harum president director Ray Antonio Gunara said his firm was mulling to take over several mines nearby the company’s existing mines in East Kalimantan. “As for the year, we are targeting to acquire at least one company, with a minimum coal deposit of 50 million tons,” he told a conference on Thursday.

He added that it did not matter whether the company Harum planned to acquire had or had yet to produce coal.

“We keep opening ourselves up to new opportunities by looking for potential mines to acquire. We have adequate cash of around $200 million and existing loans of up to $270 million to obtain new mines.”

Harum’s latest financial result shows that the company had $188.22 million in cash as of March 31, which means the miner has around $458.22 million to $470 million to finance its expansion.

Currently, Harum Energy controls five coal mining firms: Karya Usaha Pertiwi (KUP), Mahakam Sumber Jaya (MSJ), Santan Batubara, Tambang Batubara Harum and Harum Energy Australia — which is operated by Cockatoo. Besides Harum Energy Australia, other mines are located in East Kalimantan.

The company’s combined coal resources — according to its first three-month financial reports — stood at 82.4 million tons.

Roy said the company had revised its annual production target this year from 8.5 to 9 million tons, much lower compared to its initial target of 12 million tons and last year’s production of 11.5 million tons.

Its sales volume is estimated to be at 10 million tons at most, down by 38 percent compared to the 13.8 million tons it marketed last year.

With global commodity prices yet to show signs of improvement, Ray said the company tried to reduce its stripping ratio — the ratio of waste material volume needed to be removed to extract a certain amount of ore — to reduce mining costs.

By reducing production, the company hoped to trim mining costs from $50 per ton last year to around $43 and $45 per ton this year.

Roy said that as of the first quarter of the year, the company saw its average selling prices (ASP) down by 6 percent year-on-year (y-o-y) to $64.6 per ton, hauled by oversupply in China and India.

All of Harum’s production goes to its traditional markets, located in South Korea, China, Taiwan and Malaysia.

Plunging prices and reduced production have slashed Harum’s revenue in the first three months of this year by nearly half compared to the same period last year.

The company recorded $128.06 million in revenue between January and March this year, while it booked $223.68 million last year.

However, Harum managed to book a 48 percent y-o-y increase to $12.23 million in its after-tax profit during the first three months of the year, supported by a significant cutback in its costs and surging gains in foreign exchange (forex) resulting from currency depreciation.

The company’s costs of sales and direct costs during the quarter were down by 85.5 percent y-o-y to $99.53 million, while its selling expenses dropped by 74.9 percent y-o-y to $11.96 million.