PT Indo Tambangraya Megah Tbk. (ITM) posted a net income of USD 475 million during its fiscal year 2021, attributed to the significant increase in coal prices along with an efficient and prudent cost management strategy. In addition, throughout last year, the Company has proven its commitment to ESG (Environmental, Social and Corporate Governance) values with various initiatives.
The hike in coal prices in 2021 was driven by the gradual return to normalcy from the peak of the pandemic situation, which triggered global economic recovery, especially in China as the largest coal producer and consumer. As a result, the coal demand rose while the coal supply could not catch up due to several factors such as adverse weather and logistics issues.
Throughout 2021, ITM was able to achieve an average coal selling price of USD 103.2 per ton. Amidst the high price increase, the Company consistently applied cost efficiency in a disciplined manner to maximize its profitability from the momentum of coal price increases, resulting in a solid financial performance despite the prolonged pandemic and slower mining activities due to torrential extreme rains.
The combinations of those factors led ITM to record an EBITDA of USD 885 million in 2021, rising by 373% from the previous year, while net income increased from USD 38 million in 2020 to USD 475 million in 2021. Earnings per share was booked at USD 0.4.
In 2021, ITM produced 18.2 million tons of coal amidst bad weather and extreme rain. Meanwhile, 2021 Net Revenue was recorded at USD 2.1 billion while gross profit margin grew from 17% last year to 44% with a sales volume of 20.1 million tons, marketed to China (5.5 million tons), Indonesia (4.7 million tons), Japan (3.1 million tons), Philippines (1.8 million tons), Bangladesh (1.3 million tons), Thailand (1.2 million tons), and other countries in East, Southeast and South Asia as well as Oceania.
As of the end of 2021, the company's total assets were recorded at USD 1.7 billion with total equity of USD 1.2 billion. The Company also had strong cash and cash equivalent balance of USD 691 million.
This year, the Company targets production volume between 17.5-18.8 million tons and sales volume of 20.5-21.5 million tons. Out of the sales volume target, the price for 17% is already fixed, while 48% is based on index-linked, 2% unpriced, and the remaining 33% unsold.
In 2021, the Company has implemented ESG (Environmental, Social and Corporate Governance) values to achieve sustainable development and operation. As a highlight, in the field of environment, GHG emission was reduced by 32% in the last four years.
In the Watershed area rehabilitation, the Company had restored the river ecosystem with areas covering 2,540 ha across many regions, which was then handed over to the Government. The cumulative total of 14,433 ha had been fully rehabilitated and transferred by end of 2021. PT Bharinto Ekatama (BEK), ITM subsidiary, participated in the Menoreh Hills watershed area rehabilitation national project, in Yogyakarta, within the super-priority tourism destination, Borobudur.
Two subsidiaries of ITM, PT Trubaindo Coal Mining (TCM) and PT Jorong Barutama Greston (JBG), were deemed “beyond compliance” by earning the Green PROPER in 2021, while PT Indominco Mandiri, PT Kitadin – Embalut, and PT Bharinto Ekatama were granted Blue PROPER designation.
In the area of social, the Company combated against pandemics through early participation in Gotong Royong Vaccination Program. Furthermore, in the area of governance, the Company’s Organization Structure was built with sustainability in mind, as one example, the Company has a committee responsible to the Board of Commissioner to monitor the sustainability development inside the company.
Apart from the initiatives, ITM also received several awards and recognition such as Five Star Top CSR Awards 2021, Four Star Top GRC Awards 2021, Gold Rank 2021 from Asia Sustainability Report Rating, Best in HR Crisis Management, and Management BBB Rating in ESG Disclosure Awards 2021, all of which acknowledged achievements of the Company in the field of ESG.
Going forward, ITM’s target is to become a leading Indonesian energy company that is greener and smarter. This transformation moves the current ITM business into 3 lines of business.
The first is mining which includes coal, mineral, and other related mining activities as the main business. The second is energy service which includes mining services, trading, and natural capital solutions to get more value from our established energy operation. The last is renewable and others which are related to investment in renewable energy and other energy technology to capture future energy trends.
The Company’s transformation roadmap will follow 3 phases, namely consolidation, transition, and acclimation where each step will grow the Company’s capacity into a greener and smarter business through business diversification.
By 2022, the Company has set 4 main goals: optimizing coal assets, growing new businesses, embedding Banpu Heart as the corporate culture, and fostering ESG values integrated with all aspects of business in anticipation of climate change and sustainability efforts and concern for the community. In addition, the Company will strengthen employees' digital capabilities to facilitate the digital transformation that can generate operational and financial benefits.