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These are coal issuers with jumbo reserves

Sabtu, 22 Oktober 2016 / 17:35 WIB

These are coal issuers with jumbo reserves

JAKARTA. Coal producers selected the option of acquisition to increase their coal reserves.

Recently, PT Bukit Asam Tbk (PTBA) has the largest coal reserves among other companies with a 3.33 billion ton of reserves. The state owned company also has a 8.27 billion ton of resources.

Last year, PTBA spent US$36 million to acquire a new coal mine in South Kalimantan. This acquisition has increased the issuer’s performance and coal reserves.

Corporate Secretary of PTBA Adib Ubaidillah said that PTBA is the coal company, which has the largest coal reserves in Indonesia. PTBA also sees to acquire new coal mine in out of Sumatra, such as Kalimantan. “The expansion aims at reducing dependency from mine in Tanjung Enim”, Adib said, However, Adib refused to disclose the costs for this inorganic expansion.

Recently, PT Adaro Energy Tbk (ADRO) has increased its coal reserves by acquiring a worth of US$120 million of IndoMet shares. The coal reserves of ADRO will increase from 1.3 billion ton to 2.6 billion ton.

The coal reserves of ADRO is almost similar with the coal reserves owned by PT Bumi Resources Tbk (BUMI). The issue under Bakrie Group has a 2.7 billion ton of coal reserves. BUMI itself has a huge total of resources at around 12.6 billion ton.
Despite of huge number of resources, BUMI is facing problem of debts to launch expansion. As of June 2016, BUMI’s coal production only increased by 1.8% to 39.8 million ton.

Analyst at Recapital Securities Kiswoyo Adi Joe estimated that the huge amount of coal reserves have made the issuers become more prospective in a long time period. However, the prospect itself depends on the issuers’ sales and production levels.
ADRO and PTBA succeeded to use the coal price depreciation to acquire assets with more efficient prices.

Meanwhile, PT Indo Tambangraya Megah Tbk (ITMG) dan PT Harum Energy Tbk (HRUM) have more limited coal reserves. However, the companies are still eyeing for acquisition.

Kiswoyo added that ITMG has attractive prospect. Despite of limited reserves, ITMC has solid cash funds to launch expansion. “ITMG also has solid parent”, he said.

Analsyst at Bahana Securities Andrew Franklin Hotama said that the acquisition of IndoMet will increase production and income of ADRO. “We predict that the net profit of ADRO will increase by 6% on year-on-year basis in 2017 and 2018 due to the more stable of coal price”, he said on a research dated on 17 October 2016. Furthermore, Andrew shit the recommendation of ADRO from ‘hold’ to ‘buy’ with the target price of IDR1,717 per a share.

Meanwhile, Kiswoyo still recommended ‘buy’ for PTBA, ADRO, and ITMG shares.


Issuer Proven Reserves

PT Bukit Asam Tbk (PTBA) 3.3 billion ton
PT Bumi Resources Tbk (BUMI) 2.7 billion ton
PT Adaro Energi Tbk (ADRO) 2.6 billion ton
PT Indo Tambangraya Megah Tbk 217 million ton
PT Toba Bara Sejahtera 148 million ton
PT Harum Energy Tbk 71 million ton


(Muhammad Farid/Translator)

Reporter: Narita Indrastiti
Editor: Barratut Taqiyyah Rafie
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