This Company's 1H2026 Numbers Were Weak. What is The Real Investment Story?

Geo Energy Resources’ 1H2026 results were not impressive: Revenue fell 28% to US$207 million, while net profit dropped to US$14.2 million from US$19.7 million a year earlier.

The reason was mainly lower coal volume. Geo sold just 3.6 million tonnes in 1H2026 versus 6.3 million tonnes a year ago.

The more interesting story is what happens from 2H2026, now that Geo's long-awaited MBJ hauling road and jetty are operating.

coal hand pic

And coal is not a sunset business, as some believe. As CEO Charles Melati has said:

“For emerging countries, coal is still being adopted because it is the cheapest and most accessible energy.”

Recent events have strengthened his case. Coal demand across Asia remains substantial, while higher oil and gas prices following disruption around the Strait of Hormuz have encouraged some power producers to switch fuels.

For Geo, ICI4 coal prices averaged US$58.13 per tonne in 1H2026, versus US$47.91 a year earlier, before rising further to US$63.14 in July.

Geo's cash profit per tonne improved to US$13.30 from US$10.19. So the problem in 1H was not coal pricing. It was volume.

The 92km road changes the equation

Geo has completed a 92km all-weather hauling road connecting the huge TRA mine to a river jetty.

Because the new route is much shorter, it could reduce TRA logistics costs by roughly 30%.

Stock price	$0.505
52-week range	$0.33-$0.675
Market cap	S$897 m
52-week change	21.7%
PE (ttm)	30
Dividend yield	0.8
P/B	1.2
Source: Yahoo!

On 16 July, the road and jetty finally went operational.

Geo now expects around 8 million tonnes of coal sales in 2H2026, more than double the first half, putting it on track for its full-year target of 11.5–12.5 million tonnes.

Longer term, TRA is targeted to reach 20–25 million tonnes annually.

But MBJ is more than just a road for Geo. This is where the investment story gets more interesting.

MBJ is designed for capacity of roughly 40–50 million tonnes annually. Around 25 million tonnes can serve TRA, leaving substantial capacity for nearby coal miners.

Even before completion, Geo had signed binding term sheets with third-party miners covering around 9 million tonnes a year.

Huge value of MBJ

Even more interesting is the external valuation.

Swiss-based commodities investment group Resource Invest AG earlier agreed to invest in MBJ based on a valuation of US$1.5 billion, with an initial investment expected in 3Q2026 and the remainder in 1Q2027.

Geo owns 71.3% of MBJ.

33% capital return

"The interim dividends declared of 0.10 SG cent in 2Q2026, in addition to the 1Q2026 interim dividend declared and paid of 0.10 SG cent per share and share buybacks of 5,837,500 shares for US$2.4 million in July 2026 implies a capital return of 33% of the net profit for 1H2026."
-- Geo Energy

The potential: Geo says using MBJ for TRA alone could eventually deliver as much as US$350 million of annual EBITDA uplift from cost savings, while total additional EBITDA could reach up to US$600 million at full infrastructure utilisation.

Those are long-term numbers, not something that will happen anytime soon.

Geo is also becoming more integrated.

Geo acquired 51% of two Indonesian marine logistics companies in January, giving it greater control over the movement of coal and reducing dependence on outside transport operators.

It is also pursuing the Harfa mine, where Trafigura has agreed to buy roughly 1.5 million tonnes of coking coal annually and provide US$50 million–US$100 million of prepayment funding.

This explains why management increasingly describes Geo not simply as a coal miner, but as an integrated mining, infrastructure and logistics company.

The key question now

If full-year net profit ends up US$55–60 million, roughly in line with Phillip Securities' estimate, then at S$0.505 Geo is trading at around 11.5–12.6 times FY2026 earnings.

For a conventional coal miner, that would not look especially cheap.

But Geo is increasingly not just a conventional miner.

Still, there are risks. Geo has spent heavily, cash has fallen (from US$105.1 million at end-2025 to US$59.1 million at June 2026) and Indonesian regulatory changes remain something investors need to watch.

And ResInvest has yet to complete the first investment tranche at or close to the stated US$1.5 billion MBJ valuation.

But management clearly thinks the stock remains undervalued. Geo bought back 5.84 million shares in July, and Melati said:

“This is a natural step to take given the continued undervaluation of our current share price.”

The question now is whether it can fill the new road.

For investors, therefore, the key numbers to watch over the next few quarters are no longer just coal prices.

They are TRA production volumes, MBJ throughput, transport cost savings and third-party customers for the MBJ infrastructure.

That is the real investment story going into 2H2026 and beyond.

This Company's 1H2026 Numbers Were Weak. What is The Real Investment Story?

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