Golden Energy and Resources has reported earnings of US$16.5 million for 1HFY2020 ended June 30, up 32.4% y-o-y. The better profitability came on the back of a 18.6% y-o-y growth in revenue to US$593.5 million, as the company sold a higher volume of coal, even though average selling prices declined.
Between 1HFY2020 and 1HFY2019, the average selling price GEAR was able to fetch for its thermal coal dropped by 6.8% to US$33.38 per tonne. However, its volume increased by 32% y-o-y to 16.7 million tonnes in the same period, which includes contribution from a newly acquired mine.
The company was also able to achieve a higher bottomline because it kept operating costs under control. Between 1HFY2019 and 1HFY2020, cash cost, excluding royalty, was US$22.53 per tonne, down 4.4%.
“While the coal mining industry inadvertently faces challenges due to global efforts towards renewable energy, developing countries in the South Asia region continue to depend heavily on coal for their energy needs,” said Fuganto Widjaja, GEAR’s executive director and group CEO.
During 1HFY2020, GEAR completed the acquisition of the Ravenswood Gold mine (picture) in Queensland, Australia, which is its second investment in gold in Australia. This mine is currently producing.
“Following the transformation towards a more diversified portfolio in terms of geographical locations of our assets and types of products, we now turn our focus towards optimising our mining operations, including proactive management to minimise operating costs, as we remain committed to delivering long term value to our shareholders,” added Widjaja.
GEAR remains cautiously optimistic on the near to medium term outlook recovery for thermal and metallurgical coal demand and prices.
As at June 30, the Group maintains a robust balance sheet with cash and cash equivalents of US$220 million.
GEAR closed Aug 14 at 16.4 cents.
