Tuesday, 23 September 2014


PT Indo Tambangraya Megah. Tbk (ITMG) was established on September 2, 1987 and started its commercial operations in 1988. The parent company of ITMG is Banpu Minerals (Singapore) Pte, Ltd (65.00%). And, the ultimate parent company of ITMG is Banpu Pulblic Company Limited, a company incorporated in the Kingdom of Thailand.

To support its business in the mining sector, ITMG will establish a new subsidiary that will be engaged in mining service business. Two new subsidiaries named PT Energy Utama and PT ITM Batubara Utama.

According to Edward Manurung, Director of the Company, in a statement on Friday (august 22), PT ITM Batubara Utama will later be engaged in the coal business and PT ITM Energy business. License for the establishment of these entities is awaiting the process in the Ministry of Justice and Human Rights.

In the business development planning, the company’s management admitted that they were considering about expanding business to the electricity sector by building a stream power plant (PLTU). Interest in investing in this sector is to complement the company’s coal business. In addition, his party also considered that this a very stable business.

According to Edward, the company already has a steam power plant, but the capacity is only 2´7 megawatts (MW). The plant is used for mining area of its subsidiary, indomico. “We continue to see the opportunities. Now, we consider whether it is profitable or not, “he concluded.

As for other business plan, the company plans to expand the port which could accommodate its coal production in Bontang, East Kalimantan. The expansion of this port is set to be completed in 2016.

To date, the company has subsidiaries in the field of coal mining with full ownership. The three subsidiaries which operate in East Kalimantan are PT indominco Mandiri, PT Teubaindo Coal Mining, PT Jorong Barutama Greston, and PT Bharinto Ekatama.

The company plans to increase the capacity of Bontang port to 30 million tons from 20.5 million tons previously. While, the capacity of Bunyut port will be increased to 15 million tons from 9 million tons. The expansion of Bontang port is estimated to cost USD 60 million to USD 70 million, while the expansion of Bunyut port estimated to cost USD 20 million.

It is noted that net profit rose 40% from USD 105.41 million in the first half of 2013 to USD 148.02 million in the first half of 2014. However, sales fell 11.41% to USD 965.22 million in the first half of 2014 from the same period in the previous year.

Selling expenses decreased to USD 66.31 million in the first half of 2014. And, general expenses decreased to USD 12.21 million in the first half of 2014. Meanwhile, total liabilities decreased to USD 410.94 million on June 30, 2014. Equity rose to USD 950.11 million on June 30, 2014. The company’s total cash is USD 398.12 million.

ITMG expects that coal sales volume this year could rise, although slightly. ITMG targeted a 2% increase of sales volume from 29.1 million tons to 29.7 million tons. As for production, ITMG only targeted a slight growth from 29.4 million tons to 29.5 million tons. Edward said that about 82% of the target already has a buyer. The detail are: 56% have set the price, 18% have reached agreement, but not yet set the price.

ITMG coal production in 2013 could grow 6.9% from 27.5 million tons to 29.4 million tons. The volume of sales was also up from27.2 million tons to 29.1 million tons. But, net sales decreased 10.6% from USD 2.43 billion to USD 2.17 billion.

This year, ITMSG budgeted capital expenditure (capex) of USD 86 million or approximately IDR 972.23 billion. Most of these funds will be used for the development of infrastructure in 5 mining areas of ITMG. Capital expenditure of ITMG this year is lower than last year which amounted to USD 150 million. (E)

Business News - August 27, 2014

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