Resources Prima, hit by share price plunge, says it's confident over business

CATALIST-LISTED Indonesian coal miner Resources Prima has responded to the recent plunge in its shares with a business update that its senior management remains confident over the long-term growth prospects of the company.

Executive chairman and chief executive officer Agus Sugiono said in a statement released on the Singapore Exchange (SGX) website: "Operationally, we continue to move in the right direction as reflected by the growth in our production volume as well as the strengthening of our business model which includes a diversification of our income stream."

The company had plunged 8.2 cents, or 44.8 per cent, to 10.1 cents last Thursday, on 105.7 million shares traded. It called a trading halt on Friday and said that the group's business operations and activities were proceeding as usual.

On Monday, Mr Sugiono acknowledged the competitive environment and cautious sentiment in Indonesia's coal industry, but said the firm's business model remains fundamentally strong.

Coal production volumes had risen from 0.4 million tonnes in the financial year ended March 31, 2013, to 1.2 million tonnes in the financial year ended March 31, 2014, with sales volumes also rising from 0.3 million tonnes to 1.1 million tonnes, he said. Mining operations continued as normal during the nine months ended Dec 31, 2014, which had an expected year-on-year increase.

Mr Sugiono added that the company expects to enjoy a cost advantage compared to its peers, as it owned coal mining facilities like a stockpile, crushers, conveyor system and jetty facilities - which it can rent to third parties. It is also waiting for the approval of a permit which could increase its coal reserves. Resources Prima is the former Sky One Holdings, a logistics company which had undergone a reverse takeover. It resumes trading at 9am.