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A tale of contrasting fortunes for mining stocks GEAR and CNMC

Jeffrey Tan Published on Fri, May 19, 2017 / 10:09 AM GMT+8

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SINGAPORE (May 19):When we first added Golden Energy and Resources to the Singapore Market Portfolio on Feb 14, we reckoned shares of the Indonesia-based coal miner would be boosted by higher prices of thermal coal this year. To some extent, we have been right.

The average realised selling price of thermal coal was US$40.86 a metric tonne in 1Q2017, compared to US$31.53 a metric tonne in the same quarter last year. This led GEAR to report an 11 times y-o-y increase in earnings to US$19.04 million ($26.61 million) in the first quarter ended March 31. Revenue surged 47.9% y-o-y to US$143.2 million.

“We are highly encouraged by the group’s continued strength in its operational and financial performance, buoyed by strong demand for coal and an increased average selling price. The group anticipates that the outlook for coal will continue to be positive, given an expectation of a supply shortfall, arising from strong demand for thermal coal,” GEAR CEO and executive director Fuganto Widjaja says in a May 15 statement.