Geo Energy Q3 net profit falls 68% amid lower coal prices, weaker sales
Yong Jun Yuan
INDONESIAN coal producer Geo Energy Resources posted a 68 per cent decline in net profit to US$11.5 million for the third quarter ended Sep 30, 2023, from US$35.7 million a year earlier.
Revenue over the same period fell 33 per cent to US$111 million, from US$164.7 million a year ago.
For Q3, the company declared an interim cash dividend of S$0.004 per ordinary share, as compared to the dividend of S$0.01 per ordinary share that it declared over the same period a year earlier. The interim dividend will be paid on Nov 29, after the ex-dividend date of Nov 21, 5 pm.
Earnings per share stood at S$0.0113 for the period, from S$0.0359 a year earlier.
In its earnings release on Tuesday (Nov 14), Geo Energy attributed the lower revenue to lower sales volume and average selling price, noting that the average Indonesian Coal Index Price for 4,200 GAR (gross as received) coal fell to US$52.07 per tonne in Q3, from US$82.20 per tonne a year earlier.
It added that the group delivered coal sales of 2.2 million tonnes in Q3, from the 2.4 million tonnes that it delivered in the same period a year ago.
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Cash profit per tonne from coal mining also averaged US$9.80 per tonne over the same period, down from US$25.63 per tonne a year earlier after accounting for lower Indonesian domestic sales prices, as well as the decrease in coal index price and average selling price.
Still, the group expects positive demand-supply dynamics to strengthen the near-term outlook of coal prices.
It noted that heightened tensions in the Middle East may discourage investments into an Eastern Mediterranean pipeline to transport natural gas to Europe. This could further delay the energy transition and lead to continued reliance on coal, it said.
Said Geo Energy chief executive Charles Antonny Melati: “In addition, the looming winter season and strong rise in electricity demand to sustain economic growth in China and India further fuels coal demand.”
Furthermore, it noted that the coal price index has continued to outperform pre-Covid levels as it remains in demand for power generation globally.
Geo Energy shares closed flat at S$0.30 on Tuesday, before its earnings were released.
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