29th Apr 2015 07:49
LONDON (Alliance News) - Asia Resource Minerals PLC Wednesday said its pretax loss in 2014 narrowed from 2013 after the company undertook cost-cutting initiatives in response to falling coal prices, which impacted revenue in the period.
The Indonesian coal producer, created out of Nat Rothschild's Bumi PLC, said its pretax loss for 2014 was USD54 million, significantly narrower than the USD169 million loss in 2013 as the company's operating profit significantly improved despite revenue being hit by lower coal prices.
Revenue in 2014 was down 4.1% to USD1.36 billion from USD1.42 billion in 2013 due to lower coal prices, partially offset by increased production volumes which were up 3% year on year to 24.2 million tonnes of coal from 23.5 million tonnes. The additional coal production was mainly from the Binungan and Lati Mines.
Average realised prices in 2014 fell to around USD54.1 per tonne compared to USD59.6 per tonne a year earlier.
Asia Resource Minerals said its operating profit for 2014 was USD28 million, swinging from a USD23 million loss in 2013 whilst underlying earnings before interest, tax, depreciation and amortisation rose 17% to USD206.0 million from USD176.0 million "despite continued weakness in global coal markets". Ongoing cost initiatives achieved a 6.7% reduction in production cost of sales to USD36.0 per tonne from USD38.6 per tonne in 2013, it said.
The company slashed capital expenditure by almost half in 2014 to USD24 million from USD46 million in 2013, but the company's net debt increased to USD578 million from USD523 million at the end of 2013.
The reduction in capital expenditure was an active response to the continued weakness in global coal markets by rescheduling planned projects, the company said. Capital expenditure in 2014 related primarily to the acquisition of additional mining properties by PT Berau to maintain production levels.
"Given the continued pressure on thermal coal prices, the board continues to focus on optimising the PT Berau asset and reducing costs. We also remain resolutely focused on putting in place a sustainable capital structure for the longer term for the company and its subsidiaries," said Chairman Wallace King.
Asia Resource shares fell 4.1% to 35.00 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
ARMS.L