PT Adaro Minerals Indonesia Tbk (ADMR) has reported consolidated financial statements for the nine months ending on September 30, 2023. Volume production for 9M23 reached 3.98 million tons with sales reaching 3.01 million tons, representing a 55% and 38% increase from 9M22, respectively.
Christian Ariano Rachmat, President Director of ADMR, mentioned that amidst external environmental challenges, this performance reflects the company’s ability to achieve production growth, supporting profitability. Demand for premium hard coking coal remains high, and the company remains confident in the structural support for its business.
“Furthermore, the construction of the aluminum smelter and its supporting facilities continues to show good progress. The project is expected to be completed in Q3 2025, a significant milestone in our efforts to support Indonesia’s downstream initiatives in the green industry zone in Kaltara,” said Christian in his official statement quoted on Tuesday (31/10/2023).
The overburden stripping volume increased by 128% to 13.81 million bank cubic meters (bcm), with a stripping ratio reaching 3.47x, compared to 2.36x in 9M22.
Operational EBITDA for 9M23 amounted to USD 358.1 million, equivalent to a 13% decrease, due to rising costs and a decline in average selling prices (ASP). Core profit decreased by 11% to USD 258.1 million. Operational EBITDA and core profit do not take into account non-operational components, reflecting the core business performance.
ADMR spent USD 95.7 million in capital expenditures during 9M23, as the construction of the aluminum smelter has commenced, and infrastructure projects in Maruwai are ongoing.
Capital expenditures for 9M23 amounted to USD 95.7 million, mainly related to infrastructure projects in MC and the construction of the aluminum smelter under KAI. Free cash flow for 9M23 declined by 40% to USD 152.0 million as the company executed its investment plan.
Upon completion, infrastructure improvement projects will support the achievement of medium-term production targets of 6 million tons per year and enable the company to meet reliable delivery commitments to customers. The first phase of the KAI aluminum smelter is expected to achieve commercial operation date (COD) in 2025 – diversifying the company’s revenue mix.
PT Kalimantan Aluminium Industry (KAI) has selected all major contractors for the construction and installation of the smelter. KAI has also completed land clearing for permanent mess facilities, coastal jetty breakwater, and the construction of supporting facilities, earthworks, and temporary jetties, while continuing other infrastructure facility constructions.
ADMR launched the Enviromet product at the Coaltrans Asia 2023 event in Bali. Enviromet is Indonesia’s first premium hard coking coal product, with low ash and phosphorus content and high vitrinite content. These characteristics are crucial for maintaining efficient, high-quality, and environmentally friendly coke and steel production processes.
Regarding the use of funds from the Initial Public Offering (IPO) as of September 2023, in compliance with OJK regulations in Indonesia on the use of IPO funds, the company has disclosed the allocation of funds as of September 2023 to the public. The entire IPO proceeds have been utilized. From the remaining balance, an amount of IDR 342.8 billion has been transferred to MC for capital expenditures related to infrastructure development.
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