The thermal coal market continued to remain tight in 3Q16 driven by lower domestic supply in China and wet season in Indonesia. The Newcastle Coal Price Index has increased from avg. USD 55 per ton in 2Q16 to an average of USD 76 per ton in 3Q16. We believe coal price is continuing to increase during this last quarter of 2016.
Based on quarter-on-quarter performance, PT Indo Tambangraya Megah Tbk recorded higher sales revenue by 25% from USD 278 million in the second quarter to USD 349 million in the third quarter with average coal price staying at USD 49.9 per ton or 12% higher from USD 44.7 per ton in the last quarter. Gross profit margin went up by 5% from the last quarter to 22% in the third quarter. Earnings Before Tax and Interest (EBIT) rose by 132% from USD 20 million in the previous quarter to USD 47 million in the third quarter. Net income was recorded 146% higher, from USD 13 million in the second quarter to USD 33 million in the third quarter.
With average coal selling price at USD 47.5 per ton in the first nine months of 2016 or 18% lower than that in the same period last year, the Company has booked sales revenue of USD 958 million or 21% lower than that of USD 1,206 million in the same period last year. In this first nine months, gross profit margin was recorded 20% or 2% lower than it was in the same period last year. EBIT in the first nine months of this year was worth USD 106 million versus USD 146 million in the same period last year.
As of the end of September 2016, total assets of the Company amounted to USD 1,175 million. The company has a total equity of USD 878 million and zero debt. The earning per share in this period was USD 0.06.
Throughout the first nine months of the year the Company has produced an output of 19 million tons of coal with total sales volume of 20.1 million tons shipped to China (5.2 million tons), Japan (3.8 million tons), Indonesia (2.8 million tons), India (2.5 million tons) and other customers in Europe, East Asia, Pacific, and Southeast Asia.
For 2016, higher-than-expected rainfalls have impacted our production, and the production volume is now targeted at 26.2 million tons while sales volume target has been set to 27.1 million tons. Of that sales number, 99% has been sold. The positive impact of higher coal prices is expected to be realized in the fourth quarter performance.
The Company has focused on productivity improvement and cost rationalization to create an operating platform that is sustainable during the downturn while maintaining flexibility to capture opportunities when the market improves. Our production costs have been reduced by 31% since the program was tightly applied in 2013. As a result, an increase in average coal price since mid-year has resulted in a larger gross profit margin than that in previous years.
The Company has and will continue to focus on productivity and a cost-efficiency strategy, as well as capturing additional margins along the coal value chain including power plant investment. In addition to this, the Company will endeavor to continue to stay ahead of leading market trends and be flexible both in the short term and long term to maximize reserves value.