Geo Energy Resources' Q1 net profit dips 9.2% to US$28.5m; interim dividend declared

MAINBOARD-LISTED coal miner Geo Energy Resources on Wednesday reported a 9.2 per cent dip in its first-quarter net profit to US$28.5 million from US$31.4 million in the first quarter last year, but said that it "marks a strong positive start in terms of earnings from its business operations".

The higher net profit in Q1 FY2020 came from gains arising from the repurchases of senior notes, said the Geo Energy. The company has declared an interim dividend of 0.5 Singapore cent for the quarter ended March 31, 2021. No dividend was declared for the same period last year.

Earnings per share stood at 2.72 Singapore cents, down from 3.19 cents the previous year. Net asset value for the first three months was 23.77 cents versus 20.69 cents last year.

The group recorded its highest quarterly revenue of US$114.5 million for the quarter, up 30 per cent from the US$87.8 million over the corresponding period last year, as a result of improved sales volumes and higher average selling price.

It was also a record quarter for the group's gross profit, which stood at US$40.8 million, as cash profit for coal mining averaged US$15.71 per tonne - versus US$6.36 per tonne the previous year.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) for the quarter was over three times higher to US$44.8 million. Operating profit was over five times higher at US$38.6 million.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

The group had cash and bank balances of US$82 million as at March 31, and a net cash position of US$22.8 million. The group is thus looking to diversify into new businesses as it eyes value-accretive acquisitions.

Charles Antonny Melati, executive chairman of Geo Energy said in a statement: "Despite the overhang of the Covid-19 pandemic that continues to afflict global market sentiments, the management, along with the help of its employees, showcased excellent character and resilience to ensure sustainability and profitability in these unprecedented times."

In addition, the group has "not lost sight of the importance of sustainability", said Tung Kum Hon, chief executive officer and executive director of Geo Energy.

He said climate change was one of the most pressing challenges faced today, and that market and technology disruptions and reputational concerns are increasing as the global economy shifts towards a low-carbon and green economy.

"We understand the importance of balancing economic-development needs and environmental protection while being mindful that our business operates in an energy-intensive industry. We are committed to managing these impacts through best practices and take operational initiatives where possible and comply with applicable environmental regulations," he said.

Shares of Geo Energy ended Wednesday at S$0.23, up 1.5 Singapore cents or 6.7 per cent.