Indonesia’s one of the biggest coal producers, Adaro Energy’s net earnings dropped by 47% during January-September, 2013.
During January-September, Indonesia’s leading coal miner, Adaro’s net earnings dropped to USD 183 million from previous years USD 346 million for the same period. Lower coal cost and increased coal sales were unable to compensate weak coal prices.
Adaro’s coal sales rose to 13% to 39.1 MnT, while they have managed to control cost of goods sold in the period to USD 1.87 billion from USD 1.89 billion last year.
As mentioned by the Adaro’s corporate secretary, Devindra Ratzarwin in a statement that besides lowering production costs by 9% to USD 34.68/MT, Adaro also lowered its capital expenditure by 71% to USD 120 million from USD 423 million.
Devindra also added that “with the current condition where thermal coal was experiencing oversupply in the first nine months, the market for coal remains difficult and the price was lower than expected.”
Despite Adaro’s earning drop, it also plans to invest in power plant projects to tap the rising electricity demand in Indonesia, which will lead to higher demand for coal.
The price of coal has fallen 16.4% to USD 83.16/MT this year, as per the World Bank’s Global Economic Monitor on Commodities, because of slow Chinese imports and excess supply from global producers.
Coal export is the major source of the Indonesia income and Weak coal prices and demand has pulled countries economy towards trade deficit. However Indonesia posted a narrower trade deficit in the July-September period from the previous quarter, the trade balance on a monthly basis in September swung to a deficit of USD 660 million after a surplus of a revised USD 71 million in August. The trade deficit had reached a record high of USD 2.3 billion in July.
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