SINGAPORE (Mar 1): Geo Energy Resources reported a 77% decline in 4Q17 earnings to US$3.44 million ($4.55 million) in 4Q17 from US$14.7 million in 4Q16.
This translates to FY17 earnings of US$36.7 million, 65% higher than US$22.2 million in FY16.
Revenue for the quarter increased by 1% to US$92.8 million from US$91.9 million a year ago, attributed to less 4,200 gross as received (GAR) coal from the Sungai Danau Jaya (SDJ) coal mine due to temporary limitations of coal holding area at the jetty.
Also, the average Indonesia Coal Index (ICI) price for 4,200 GAR coal increased in 3Q17 to US$45.69 per tonne, increasing the average selling price of SDJ coal to US$43.41 per tonne from US$39.00 per tonne in 3Q17.
Cost of sales increased by 17% to US$74.9 million compared to US$64.3 million last year, due to increase in production costs at the SDJ mine as some of the mining costs were pegged to the ICI, as well as a one-off additional assessment on mining royalties which are now pegged to the Harga Batubara Acuan for prior years.
Hence, gross profit stood at US$18.0 million, 35% lower than US$27.7 million in the previous year.
Other income dropped 22% to US$1.77 million from US$2.28 million in the prior year, mainly due to the group recording a lower forex gain, but this was partially offset by an increase in interest income earned on the proceeds from issuance of the senior notes in October 2017.
Finance costs surged to US$8.84 million compared to US$1.44 million a year ago, due to additional interest expense on the senior notes on top of the MTN that was redeemed on Oct 2017.
Looking ahead, the group expects its near-term growth to be driven mainly by the upcoming start of Tanah Bumbu Resources (TBR), which should increase its total production volume to 11-12 million tonnes.
In addition, the group is working on new investments and acquisition of coal assets to strengthen its portfolio and drive growth in the longer-term.
Shares in Geo Energy closed at 24 cents on Thursday.
