Harum Energy buys Nickel Mines shares of Rp. 393 billion

PT Harum Energy Tbk (HRUM) bought 39 million shares of Nickel Mines Ltd worth Aus $ 36.74 million or equivalent to Rp. 393 billion. Nickel Mines is a nickel mining and processing company listed on the Australian Stock Exchange. Harum Energy President Director Ray Gunara said the share purchase was carried out on December 15, 2020. “With this purchase, Harum Energy owns 4.88% of Nickel Mines shares,” he said in a written statement. Ray emphasized that the purchase of Nickel Mines’ shares is Harum Energy’s effort to diversify the company’s business into the non-coal sector.

Although Nickel Mines is a company listed on foreign stock exchanges, all of its operations are in Indonesia. “We consider Nickel Mines to have a positive prospect, so it is possible to increase ownership at a later date, while still paying attention to market conditions,” he said.

This year, the company targets a capital expenditure (capex ) realization of US $ 8 million. This capital expenditure is used for mining properties, maintenance of tugboats and barges, heavy equipment, and facilities and infrastructure. As of the first semester of 2020, the company has realized capital expenditure of US $ 2 million. The capex has been used for the addition of mining properties at Mahakam Sumber Jaya (MSJ), maintenance of tugboats and barges, and vehicle maintenance.

From the production side, the company targets coal production to reach 3.5-4 million tons this year. Until the first semester of 2020, the company’s coal production realization was 1.7 million tons. Meanwhile, sales in the first semester of 2020 have reached 1.6 million tons, down 21.7% compared to the first semester of 2019 which reached 2.1 million tons.

The decline in sales is in line with the 7.5% decline in coal prices to US $ 58.3 per ton in the first half of 2020. In the first semester of 2020, China was still the main destination for coal sales, which amounted to 57%. Then, followed by Thailand 15% and South Korea 14%. In terms of performance, Harum Energy was still able to record an increase in net profit of 73% to US $ 21.9 million in the first half of 2020. Although, revenue fell 26.6% to US $ 102.5 million. Meanwhile, the cost of revenue could be reduced by 30.3 percent to US $ 71.2 million.