Measuringbusiness effects of power plant to PTBA and its share by Annisa AnindityaWibawa
JAKARTA~ The coal price drop has forced PT Bukit Asam Tbk (PTBA) to diversifyits business. One of the choice is in power plant. The red plate share listedcompany has run 3 x 10 Megawatts steam sourced power plants (PLTU) in TanjungEnim mine area (South Sulawesi), 2 x 8 Megawatts in Tarahan harbour (Lampung)and a 1.5 Megawatts biomass sourced power plant in Tanjung Enim.
The Corporate Secretary (Joko Pramono) said that a 2 x 110 Megawatts PLTU inBanjarsari will be ready to operate on February. PTBA is dealing with thefinancial provider for 2 x 60 Megawatts PLTU in Bangko Tengah, South Sumatra.Not only Indonesia, but PTBA also planning to expand its power plant businessin Myanmar and Vietnam. Stefanus Darmagiri, an analyst in Danareksa Securitiesin his research on 2015, 19th January stated that the operation of BanjarsariPLTU can give additional profit for PTBA. Meanwhile, Kiswoyo Adi Joe, ananalyst in Investa Saran Mandiri added that the power plant business will givepositive impact to PTBA coals sales. PTBA can have double margins, viewed DavidSutyanto, First Asia Capital research head. The first margin come from coalssales to power plant. The second margin will come from the electricity sales tothird parties. However, power plant require high capital. David estimated thatthe investment of 1 Megawatts power plant will require minimum capital of US$ 2millions. "But PTBA has diversified in palm oils and hospitals. The powerplant could generate multiple source of income to PTBA" he added.
The effects of coal price drops is reduced by having power plant business.David estimated that PTBA financial performance will not be hit by coals pricefluctuations. Furthermore, the coal price will still be low for upcoming yearas the world oils price dropped. The solution is business diversification frompalm oils and hospitals. David mentioned that PTBA has excessive cash. As seenin 2014 3rd quarter, PTBA cash and cash equivalents is 4,43 trillion rupiah. Onthe bright side, the oils price drop had helped coal mining companies, addedStefanus. Fuels cost is 30% of coal mining company expenses. However, for PTBAcase, fuels cost is only 6% of its expenses. Stefanus estimated that PTBA coalsproduction will only increase 15% to 18.4 million tonnes in this year. EvenPTBA has set target for production growth of 31% (21 million tonnes) and salesgrowth of 33% (24 million tonnes). In 2015, Stefanus predicted PTBA will have9.61% increase in revenue (14.13 trillion rupiah). Then the profit margin willdecrease from 21.6% to 20.1%. David recommended to stay neutral to PTBA stocksand Kiswoyo suggested to short with target price of IDR 12,000. Meanwhile,Stefanus recommended to buy with target price of IDR 15,500 and price earnings(PE) of 1.5 times.
Translated from Kontan, page 5 dated on 2015, 22nd January
