Geo Energy achieves record H1 net profit of US$105m, up 118%

எஸ். வெங்கடேஷ்வரன்
Published Thu, Aug 11, 2022 · 07:36 PM

Despite the ban on coal export in January 2022, Geo Energy Resources : RE4 0% reported a 118 per cent growth in its net profit from operations to US$105 million for H1 2022, up from US$48.1 million in the year-ago period.

This was driven by high earnings before interest, taxes, depreciation, and amortisation (EBITDA) of US$162.6 million for H1 2022 up from US$77.5 million previously, as well as lower finance costs, offset by higher income tax expense, the mainboard-listed Indonesian coal producer said in a bourse filing on Thursday (Aug 11).

Revenue was also up 67 per cent to US$368.3 million from US$220.3 million previously – driven by higher average selling price (ASP), and partially offset by lower sales tonnage. The average Indonesian Coal Index price for 4,200 GAR coal in H1 2022 was US$85.89 per tonne, compared to US$47.78 per tonne in H1 2021.

Earnings per share stood at US$0.0745, up from US$0.0344 previously.

The group delivered coal sales of 5.2 million tonnes in H1 2022, comprising 2.3 million tonnes and 2.8 million tonnes of 4,200 GAR coal from the SDJ and TBR coal mines respectively, and another 0.1 million tonnes of 3,400 GAR coal from the BEK coal mine. This was lower than 5.4 million tonnes in H1 2021 after adjusting its mining plan following the temporary coal export ban in January 2022.

The company declared a second interim dividend of S$0.02 per share. Along with the first interim dividend of S$0.02 per share paid on 27 May 2022, this represents a 39 per cent pay-out ratio on the group’s H1 2022 net earnings.

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Tung Kum Hon, chief executive officer and executive director of Geo Energy, noted that the group turned a black swan event of Covid-19 into an opportunity by tendering and redeeming its USD Bonds, saving over US$110 million in principal repayment and up to US$24 million in annual financing costs. It also capitalised on the increasing coal prices on the economic recovery thereafter.

“A resilient and competent team coupled with favourable coal market dynamics has enabled the group to perform well. Geo Energy is poised to record its best financial performance and results in 2022 since its initial public offering (IPO),” he added.

Charles Antonny Melati, executive chairman of Geo Energy noted that rising geopolitical tensions, worsening supply chain disruptions and the Russia-Ukraine conflict continue to hinder global recovery, but fuelled by an infrastructure-led recovery and the global and European energy shortage, coal demand has been high.

“Moreover, we also experienced a resurgence of import demand from China, lending a positive momentum to coal prices,” he noted. “With Europe’s return to coal amid hints that Russia will further reduce gas shipments to the continent due to tensions from the Ukraine-Russia conflict, thermal coal demand is expected to remain strong on the back of energy shortages.”

The counter closed down S$0.01 or 2.3 per cent at S$0.43 on Thursday before the announcement was made.

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