PTBA Operating Profit Exceeds IDR1 Trillion Amid Covid-19 Pandemic and Weakening Coal Price and Demand
In the first quarter of 2020, although production volume experienced a slight contraction of around 2 8% due to very high rainfall especially at the beginning of the year, PT Bukit Asam Tbk recorded 6.8 million tons coal sales, 2.1% increase compared to 6.6 million tons the same period the previous year. While coal rail transportation increased by 12.1% from the same period the previous year, from 5.8 million tons to 6.5 million tons. This achievement was highly determined by the management strategy in implementing sustainable efficiency in all lines and optimizing export market opportunities to several countries such as India, Hong Kong, Taiwan, Thailand, Vietnam and some other Asian countries, amid fluctuations in reference coal prices (HBA). Another determining factor was the optimization strategy for medium to high calorie coal export sales to the premium market.
During the first quarter of 2020, the Company recorded operating revenues of IDR5.1 trillion, consisting of IDR3.3 trillion domestic coal sales revenue, IDR1.8 trillion export coal sales and IDR87.2 billion other activities such as electricity sales, briquettes, crude palm oil, hospital health services and rental services.
This operating income was influenced by the declining average selling coal price by 3.9% to IDR741,845/ ton from IDR772,058/ ton in the first quarter of 2019. The decrease was caused by the weakening of Newcastle coal prices by 29.5% and that of the GAR 5000 Indonesian thermal coal price index (ICI) by 6.9% compared to the average price of the first quarter of 2019.
The cost of goods sold during the first quarter of 2020 was IDR3.6 trillion or an increase of 1.1% from the same period the previous year; in line with the increase in sales volume, coal transportation volume and mining service costs, related to the increase in exchange rates and hauling distances.
Considering the revenue and increase in cost of goods sold and operating expenses, the Company's operating profit may reach IDR1.08 trillion, accompanied by the achievement of EBITDA of IDR1.5 trillion and the achievement of the Company's net profit of IDR903.2 billion.
The Company's assets as of March 31, 2020 amounted to IDR27.7 trillion with the largest composition in cash equivalents and deposits with a term of more than 3 months owned by the Company of IDR8.1 trillion (29.2%) and fixed assets of IDR7.5 trillion (27.1%).
The company's total liabilities as of March 31, 2020 amounted to IDR7.8 trillion, an increase compared to the liabilities as of December 31, 2019. This was due to long-term liabilities increase of 11.2% from the realization of the first quarter of 2019.
The increase in the position of Cash and Cash Equivalents resulted in the cash ratio or the ratio of Cash and Cash Equivalents to the Company's short-term liabilities to be 167.4%, which signified that the Company had strong liquidity or was very capable of meeting short-term liabilities on time.
This achievement resulted from the efficiency strategy implemented by the Company in dealing with the coal price volatility and the reducing demand for coal supply trend. In the first quarter of 2020, PTBA did some operational efforts to reduce HPP through the implementation of mining service costs optimization by pressing the most optimal stripping ratio and hauling distance, optimization of tool road hours and fuel savings. Also, PTBA is in the midst of making tariff negotiation efforts with several major partners.