ITMG Signs 80 Percent Contract of Sales from Coal Production

PT Bayan Resources Tbk. has pocketed a sales contract of 80 percent of total production this year.

Director of Investor Relations Yulius Gozali said that the company will maintain the production target set earlier this year as most of the production has entered into the sales contract.

“So far there are no plans to cut production volumes.We believe that our coal can still be absorbed by the market considering that around 80 percent of our coal has been contracted, “Yulius toldBisnis, Friday, July 24, 2020.

To note, the ITMG-coded stock issueris targeting production volume this year at around 19 million to 20.1 million tons with sales targets in the range of 22.4 million to 23.5 million tons.

Meanwhile, in the first quarter of 2020 the company has produced 4.5 million tons of coal, or around 23.6 percent of this year’s production target.

Meanwhile, the company recorded sales of 5.8 million tons or 25.8 percent of the target in the first three months of this year.

The biggest sales contribution still came fromChinawith a total sales of 1.6 million tons, followed by Japan of 1.5 million tons.Domestic sales occupy the third position, amounting to 0.7 million.

Furthermore, sales to Bangladesh amounted to 0.5 million tons, Thailand by 0.4 million tons, India by 0.3 million tons, the Philippines by 0.3 million, and the rest came from other East and Southeast Asian countries.

In addition, Yulius said that amid the Covid-19 pandemic and restrictions on access to several export destinations, the company would continue to maintain existing markets, especially in Asia while exploring new emerging markets such as Vietnam, Bangladesh, Myanmar, and the domestic market.

Meanwhile, the company continues to carry out cost reduction initiatives to address market uncertainties and the decline in coal prices which are still moving in the range of US $ 50-US $ 55 per ton.

Issuers with large capitalization claimed to have taken the initiative to reducestrip ratio, overhead costs, and contractor costs.

“We estimate that ourcash costwill decrease by around 15 percent compared to last year,” Yulius explained.

On the other hand, in the first quarter of 2020 the company recorded an average decline in coal selling prices of 17 percent from US $ 71.1 per ton to US $ 58.7 per tonyear-on-year.

The sharp fall in coal prices was caused by the fall in coal demand caused by the spring and exacerbated by the pandemic situation.

As a result, profit for the year attributable to owner entities in the first quarter of 2020 shrank by 61.2 percent to US $ 15.4 million compared with the same period last year of US $ 39.74 million.

Meanwhile, in the first quarter of 2020 the company also recorded a decrease in revenue of up to 19.23 percent to be valued at US $ 365.9 million compared to the same period last year of US $ 453.02 million.

Source: https://bisnis.tempo.co/read/1369479/itmg-teken-kontrak-80-persen-penjualan-dari-produksi-batu-bara