JAKARTA – PT Tambang Batubara Bukit Asam Tbk (PTBA), through its subsidiary, PT Bukit Multi Investama, will expand into the oil palm plantation business by acquiring 100 percent stakes in PT Bumi Sawindo Permai, worth 861 billion rupiah ($71.69 million). Bumi Sawindo is a subsidiary of Mahkota Group and has palm plantation which contains coal resources. The two companies had reached upon agreement on October 17, 2014. The state-owned coal miner bought 99,9 percent of Bumi Sawindo’s stock share from PT Mahkota Andalan Swit and 0,002 percent from Mily. “All the shareholders of Bumi Sawindo agree to sell out 56.000 stocks to company,” Corporate Secretary Joko Pramono was quoted as saying by Investor Daily in Jakarta.
Bumi Sawindo owns 8,350 hectares of plantation land at Tanjung Enim, South Sumatra, where the majority of Bukit Asam's mining concessions are located. It also has in-house power-generating capacity and is equipped with a processing mill that was able to produce up to 45 tons of crude palm oil (CPO) per hour. Bumi Sawindo Permai’s plantation area is also equipped with a 5-megawatt power generator that’s fueled by palm oil waste and the land is estimated to have around 580 million metric tons of coal reserves, compared to the 1.99 billion tons owned by Bukit Asam in total. Bukit Asam will run the plantation and coal mining all at once, "Previously, land acquisitions were mainly for expanding our mining businesses, but now, our strategy is to diversify. We can synergize the palm oil and coal resources by managing them together and supplying the energy internally," said Joko Pramono, a Bukit Asam representative. Along with the plan, Bumi Sawindo’s coal resources will be used for PLTU Mulut Tambang and other company project’s coal needs; this time PLTU Mulut Tambang is in construction phase. Bukit Asam, along with PT Huadian Bukit Asam Power, also prepares coal resources that will be used to supply the company’s planned 2x60 megawatt Banko Tengah mine-mouth power plant. The electric steam power plant is scheduled to operate in 2017-2018 in Sumatera and Java. In 25 years, there is an estimation in supply contract about coal needs will hit 150 million tons per year and it is a part of long term company supply contract which hits 574 million tons.
Next year, Bukit Asam will set 2, 5 trillion rupiah as capital expenditure, higher than 2014 capital expenditure which is 2, 2 trillion rupiah. This is will be used for investment and expansion, specifically in independent power producer (IPP). While this year, the company has prepared to commercialize PLTU Banjarsari which has 2x100 megawatt capacity at Labat, South Sumatera, until June 2014. Bukit Asam’s net income rose to 1.16 trillion rupiah in the first six months this year, up 33 percent from the same period last year as it manages to cut operation costs.
Stock Prospects
The increasing exposure of coal trading within local market has helped Bukit Asam in avoiding unstable selling price of coal resources in global market and supporting company financial until end of this year. Mutual funds security has revised the increasing volume of coal selling in Bukit Saham to 19,9 million tons until end of 2014 while the income increased from 12,71 trillion rupiah to 13,76 trillion rupiah. Net profit has also been revised from 1, 86 trillion to 2, 15 trillion. Stefanus Darmagiri, mutual funds security analyst said Bukit Asam gets the most profit from this reinforcement during the first half of this year. “Company sells coal resources to state-owned electricity company (PLN) in a price schema selling fixed. In addition, it brings out more profit to the company,” said Stefanus about his research. The strengthening revenue and net profit of Bukit Asam are encouraged by weakening of rupiah, though the average selling price of coal drop by 5 percent in export market, compared to last year period. The growth of company financial is also stimulated by the continuously rising of company’s coal haulage capacity. Recently, the company is working on the expansion of Pelabuhan Tarahan. The escalation of coal selling volume in local market and increasing of average selling price (ASP) urge mutual funds security to set higher net profit target of Bukit Asam to 8-15 percent in 2014-2016. Meanwhile, stock price of PTBA has been revised from 13.800 rupiah to 16.000 rupiah with recommendation. Bukit Asam’s shares — traded on the IDX under the code PTBA — slumped by 2 percent on a daily basis to close at 12,075 rupiah apiece on Tuesday. The mining index slumped by 0.5 percent on the day of trading.
By: Antonia Timmerman (source: investor daily, page 13, October 22, 2014)
