Indonesian coal company expects higher sales

Berau Coal Energy, the nation’s fifth-largest coal producer, is forecast to book higher revenue this year after reporting a surge in sales on the back of rising coal prices in the global market, analysts said.

Jakarta-based Berau reported on Thursday that first-half revenue climbed 56 percent to $729.06 million from a year earlier. Net income rose fourfold to $90.3 million from $24.4 million, the coal producer said on Thursday.

Reza Priyambada, an analyst at Indo Surya Asset Management, said that the higher coal price should continue through the end of the year, helping coal miners like Berau post higher revenue. Berau’s revenue may rise 20 percent this year to Rp 11 trillion or Rp 12 trillion, he said. Last year’s revenue was Rp 9.6 trillion.

“As long as Berau can maintain its good performance, it will be able to post high revenue through the end of this year,” Reza said. “With increasing efficiency, I believe that Berau can gain more than expected.”

Coal production was 9 million metric tons compared with 7.9 million tons recorded in the same period a year earlier, Berau president director Rosan Perkasa Roeslani said in a statement, though he did not give the average coal selling price.

According to Investor Daily, a sister publication of the Jakarta Globe, the average selling price at Berau rose to $74.6 per ton in the first half from $57 ton in the same period a year earlier.

Rising prices also helped coal producers Bumi Resources and Adaro Energy post higher revenues in the first half of 2011.

Bumi, a rival of Berau, forecast its production to reach 65 million to 66 million tons this year with selling price averaging $90 per ton fresh off the boat. That compared to last year’s 60 million tons of production with average selling price at $71 per ton fresh off the boat, Bumi said on July 30.

Coal production at Berau is expected to reach 20 million tons this year, compared with last year’s production target of 17 million tons, Rosan said.

Still, Reza of Indo Surya said that Berau’s coal production may slow in the second half due to bad weather, as more rainfall is expected in September.

That would cause Berau to produce around 16 million to 17 million tons of coal, less than the forecast made by Rosan.

Berau currently has 467 million tons of coal reserve, most of which are categorized as high-calorie coal at the level of 6,100 kilo calories per kilogram.

The company plans to spend $450 million to $475 million through 2014 to boost its production to 30 million tons of coal.

Shares of Berau rose 6 percent or Rp 30 to Rp 55 on the Indonesia Stock Exchange on Thursday, representing an 8 percent increase in shares this so far this year.