Coal miner Bumi Resources swings back to black in 1st quarter
WATARU SUZUKI, Nikkei staff writer
JAKARTA -- Indonesia's Bumi Resources achieved a turnaround in the first quarter after two years of loss-making. The announcement gave the coal miner's shares a significant boost on the Jakarta bourse Wednesday.
Bumi, owned by the conglomerate Bakrie Group, said late Tuesday it recorded a consolidated net profit of $349 million for the three months ended in March. In the same period a year ago, it suffered a $62 million net loss. The recovery was mostly thanks to a sale of shares in mining subsidiary Kaltim Prima Coal to sovereign wealth fund China Investment Corp. The deal pushed up Bumi's profit by $746 million.
In the last two years, Bumi logged a combined net loss of $1.27 billion.
While the bottom line improved, revenue slipped 11% to $839 million due to weak coal prices. Higher production costs further pressured the company's margins, resulting in a 72% on-year drop in operating income to $22 million.
Despite continued weakness in its core business, Bumi's shares surged during Wednesday trading. The stock rose almost 10%, closing at 210 rupiah. Some analysts say the return to the black will help the company pay off mounting debt. High interest payments have damaged Bumi's finances.
The company revealed plans earlier this month to raise up to 6.5 trillion rupiah ($590 million) from a rights issue in order to wipe out some of the debt. The proposal will be up for approval by shareholders at a meeting scheduled for next month.