GEAR swings into the black for H2; Full year Ebitda at record

GOLDEN Energy and Resources (GEAR) swung into the black for its second half, on the back of stronger revenue.

Net profit for the 6 months ended Dec 31, 2021, stood at US$85.2 million, reversing a US$8.4 million loss from the year ago period. On a per share basis, earnings amounted to US$0.0362 in the latest period, compared to a US$0.0036 loss in H2 2020.

The improved performance came as revenue surged 87 per cent on-year during the period to US$1.1 billion, from US$570.7 million previously.

For the full year, revenue jumped 61.2 per cent to US$1.87 billion, with improvements in both energy coal and metallurgical coal segments.

Earnings before interest, tax, depreciation and amortisation (Ebitda) also surged 341 per cent in FY21 to a record of US$503.3 million, the highest since its listing, the company said. Net profit for the full year also improved to US$114.3 million, from US$8.1 million in FY20.

The company noted that average selling prices (ASP) for energy coal improved 72 per cent to US$53.46 per tonne, resulting in segment revenue climbing 49 per cent to US$1.59 billion. Metallurgical coal also saw ASP improve 65 per cent, with the segment's revenue jumping 195 per cent to US$286.6 million.

Gross profit surged by 117 per cent on year to US$817.1 million in FY2021, with gross profit margin improved by 11 percentage points to 43.6 per cent.

The group also said it generated a record net cash inflow from operations of US$377.7 million in FY2021 compared to US$108.9 million in FY2020.

Fuganto Widjaja, executive chairman of GEAR, said: "FY2021 was a transformational year as the group achieved record-high revenue, net profit and Ebitda, and continued to make good progress in our portfolio diversification, expanding our Metallurgical Coal segment through organic and inorganic growth."

He added: "There continues to be strong underlying demand for both energy coal and metallurgical coal which are areas where the group has strong capabilities in, and we will continue to seize opportunities in all of our business segments."

Despite the record year, the group said it will not be declaring any dividends for FY2021 - unchanged from the previous year - in view of a need to conserve and retain cash to meet its commitment to fund an acquisition.

The group said its metallurgical coal arm in Australia, Stanmore, signed an agreement last November to acquire 80 per cent interest in BHP Mitsui Coal for a consideration of US$1.2 billion cash, with a potential follow-up payment of up to US$150 million after 2 years.

GEAR has provided a binding commitment letter in support of the acquisition and it has committed to subscribe up to US$300 million of its entitlement, but reserves the right to subscribe up to its full pro-rata entitlement.

It added that in view of the anticipated working capital requirements of the group, including planned and opportunistic acquisitions, the company "expects the group to conduct fund-raising exercises - including accessing the equity and debt capital markets - to meet the funding needs of such requirements and actions."

GEAR shares closed at S$0.37 on Friday, down 1.3 per cent, before the results.