PT Indo Tambangraya Megah Tbk. (ITM) throughout 2018 recorded the highest net income in the last 5 years and increased coal reserves significantly by acquiring PT Nusa Persada Resources (NPR). This shows that the company has been more confident to grow along with the global coal price recovery, strengthening its position as a worldwide energy company.
The last year’s acquisition of NPR with total concession of 4,291 hectare has added coal reserves by 77 million tons to the company’s total reserves. In addition, exploration activities as well as mine plan improvement carried out in 2018 also increased coal reserves by 45 million tons, making it 354 million tons in the end of 2018 from 254 million tons in the preceding year.
Ever since it proclaimed its transformation into an energy company in December 2016, ITM now has had possessed 14 subsidiaries; 9 of which are engaged in coal related business, 3 in mining contractor and fuel business, and 2 in power business.
As for the net income, it was recorded at USD 259 million in 2018 versus USD 253 million tons in 2017. The highest since 2013. Higher net income mainly was driven by an increase in average coal selling price throughout 2018 which was USD 81.0 per ton, or 11% higher than USD 72.7 per ton in the previous fiscal year.
Higher average coal selling price resulted from higher global demand. In the first three quarters of 2018, for instance, demand grew in China amidst low calorific value coal restriction policy. It also rose in India as a consequence of the country’s healthy production growth. In addition, new power plants which had commenced operation in Vietnam, Malaysia, and Pakistan drove coal demand.
With total sales of 23.5 million tons throughout the year, the company booked total revenue of USD 2,008 million, or 19% higher than USD 1,690 in the preceding year. In 2018 gross profit margin was recorded 29% versus 30% in the previous year while EBIT rose by 11% to USD 432 million. Earnings per share during the period was USD 0.24.
By the end of 2018, ITM’s total assets were valued at USD 1,443 million while total equity was USD 970 million. The company has maintained a net cash position of USD 368 million with zero debt.
The company sold 23.5 million tons throughout 2018 which was shipped to China (4.9 million tons), Japan (4.3 million tons), India (3.5 million tons), Indonesia (2.8 million tons), Philippines (2.2 million tons), and other countries in East, South, and Southeast Asia.
In the fiscal year of 2018, the company produced 22.1 million tons of coal. For 2019, production volume is targeted at 23.6 million tons while our sales volume target has been set at 26.5 million tons, of which 61% has already been sold.
For 2019 the company is executing several strategies to make its position as energy company stronger. The first is improving mine infrastructure such as expanding stockyard at Bunyut Port, improving hauling road in Melak Cluster, optimizing Jorong port capacity, and optimizing coal transportation performance.
The company also captures margins along the value chain by improving contractor productivity and capacity, maximizing fuel business volume and enhancing logistics to maintain disciplined cost management, exploring opportunities in domestic power business development which is growing.
Furthermore, the company expands its core business by leveraging synergy in term of mine infrastructure utilization among adjacent concessions. In addition to increasing coal trading volume, the company continues the stage of feasibility study of underground mining operation at Trubaindo.
The company, too, enhances its business process by applying a broad digital transformation while keeping on promoting innovation and people development.