Singapore-listed Geo Energy, which produces thermal coal out of Indonesia, reported a sharp improvement in financial performance for 1Q2021 owing to higher sales volume and selling prices.
Highlights
Quarterly revenue was highest at US$114.5 million, an increase of 30% from the US$87.8 million in 1Q2020, due to higher sales volume and higher Average Selling Price (“ASP”).
| Why coal price has gone up |
| • China’s continued curbs on Australian coal. • 17% decline in coal production in Indonesia due to strong monsoon and extreme weather conditions. The average ICI4 price increased to US$41.84 per tonne in 1Q2021, up from US$31.97 per tonne in 4Q2020 and US$34.44 per tonne in 1Q2020. ICI4 price was at a high of US$53.64 per tonne as at 11 May 2021. |
The Group sold a total of 2.9 million tonnes of 4,200 GAR coal from its SDJ and TBR coal mines, a 16% increase from 2.5 million tonnes in 1Q2020.
The average Indonesian Coal Index price for 4,200 GAR coal (“ICI4”) was US$41.84 per tonne in 1Q2021, up from US$31.97 per tonne in 4Q2020 and US$34.44 per tonne in 1Q2020.
The Group also recorded its highest quarterly gross profit of US$40.8 million in 1Q2021, as cash profit for coal mining averaged US$15.71 per tonne (4Q2020: US$8.09 per tonne; 1Q2020: US$6.36 per tonne), driven by the higher ASP and lower production cash cost as compared to 1Q2020.
EBITDA more than tripled from last year to US$44.8 million in 1Q2021 (1Q2020: US$14.1 million, 4Q2020: US$22.2 million), with an implied annualised EBITDA of more than US$100 million.
Operating profit of US$38.6 million was an increase of 457% from US$6.9 million in 1Q2020.
| Net profit was US$28.5 million (4Q2020: US$3.5 million; 1Q2020: US$31.4 million), driven by the strong operating profit. Finance costs have lowered as interest expense on Senior Notes decreased by 77% from 1Q2020 following the 68% reduction in debt from US$195.5 million as at 31 March 2020 to US$61.7 million as at 31 March 2021. |
CEO Tung Kum Hon. NextInsight file photo The Company is declaring an interim dividend for 1Q2021 of 0.5 Singapore cent per share. In addition to the 0.8 cent final dividend for 2020 to be paid in May 2021, this represents a dividend yield of 6.0% for the period based on the Company’s share price of S$0.215 per share as of 11 May 2021.
The Group had cash and bank balances of US$82.0 million as at 31 March 2021, and a net cash position of US$22.8 million. The Group looks at diversification into new businesses as it eyes value accretive acquisitions.
Mr Tung Kum Hon, CEO and Executive Director of Geo Energy, said:
| “2020 was characterised by a volatile, uncertain, complex and ambiguous economic environment, mainly due to the pandemic-induced downturn and ongoing geopolitical tensions. Despite these headwinds, the Group’s 1Q2021 financial results demonstrated its capability to rise above the challenges and deliver value to its shareholders. Where many businesses contracted post COVID-19 pandemic, we have expanded our business as we turn a negative event into a strong positive performance for the Group in 2020 and now in 1Q2021." |
For more information, see press release here.
