Geo Energy has reported a net profit of US$8.7 million ($11.8 million) for the 1QFY2024 ended March 31, 45.6% lower than its net profit of US$16.0 million in the corresponding period the year before.
1QFY2024 revenue fell by 25% y-o-y to US$99.0 million. The drop was largely due to lower coal (ICI4) prices averaging at US$57.23 per tonne in 1QFY2024, compared to US$76.60 per tonne in 1QFY2023.
Resulting from seasonality and weather conditions, the group saw a decrease in production volume for 1QFY2024, delivering coal sales of 1.8 million tonnes which comprised 1.1 million tonnes, 0.6 million tonnes and 0.1 million tonnes of coal from the TBR, SDJ and TRA coal mines respectively.
Cash profit per tonne from coal mining for 1QFY2024 remained strong at an average of US$13.18 per tonne as compared to US$17.36 per tonne in 1QFY2023.
Additionally, due to Geo Energy’s success in reducing the strip ratio of its mines and cash costs, the group’s profit margin remains relatively stable at 24.1% in 1QFY2024.
The group’s other income rose by 24% y-o-y to US$2.1 million in 1QFY2024. The figure consists mainly of foreign exchange gains and interest income.
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General and administrative expenses were also higher in 1QFY2024 standing at US$3.5 million than US$2.7 million in 1QFY2023, resulting from enlarged operations following the acquisition of PT Golden Eagle Energy Tbk (GEE) on Oct 18, 2023.
During the quarter, the group has drawn down term loan facilities of US$220 million in October 2023 to fund its expansion plans. As such, its finance costs surged to US$5.1 million in the 1QFY2024, up from US$0.01 million in the corresponding period the year before.
Geo Energy has declared an interim dividend of 0.2 cents per share.
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“Coal consumption was at an all-time high in 2023 due to the rising demand from emerging and developing economies. Globally, economic activity has shown resilience in 1Q2024 and industrial expansion is likely to continue to drive steady demand for coal. China is expected to be one of the largest contributors, underscored by their construction of 70 gigawatts of new coal power plants in 2023,” says Charles Antonny Melati, executive chairman and chief executive officer of Geo Energy.
“The average ICI4 prices remained stable at USS$57.23 per tonne in 1QFY2024, comparable to US$58.85 per tonne in 4Q2023. Coal remains the cheapest source of energy and with rising concerns of energy security globally, the growing demand for coal is expected to support coal prices in 2024 and beyond,” he adds.
Looking ahead, the group says it has completed land clearing in preparation for its planned 92km hauling road. Geo Energy is also currently in the process of completing the detailed engineering design and appointment of a main engineering, procurement and construction (EPC) contractor on a lumpsum turnkey basis in the next few months, with a targeted completion date of the end of next year.
“To build and achieve long-term sustainable profitability, we have laid the foundation for transformative growth with the acquisition of GEE and we are making steady progress in the development of the integrated infrastructure to support our growth plans,” continues Melati.
Shares in Geo Energy closed 1 cent lower or 3.39% down at 28.5 cents on May 9.
