Bumi Resources
Disappointing 1H12
results
Quick Note
Above/below
expectations?
BUMI reported a 1H12
loss of USD322mn, which is well below our full year 2012F earnings forecast of
USD155mn. Please note that our 2012F earnings forecast is already 37% lower
than consensus and the third lowest on the street.
What do the results
mean?
The 1H12 earnings
results suggest:
Sales were up 9% y-y to USD1.946mn due to higher sales volume of 32.2mn
tons (+10% y-y) despite lower ASP of USD88.4/ton (-3% y-y).
Production cash cost (excluding royalties) was up 8% y-y to USD46.5/ton,
on our estimate, although strip ratio was down 9% y-y to 11.0bcn/ton and oil
price was relatively flat y-y at ~USD98/ton. We think the rise in production
cash cost had something to do with longer hauling distance. We will elaborate
further with the company on this issue.
The hike in production cash cost was more than enough to offset
the sales increase, lowering EBIT 48% y-y to USD239mn.
In 1H12 BUMI had net loss of USD55mn, down 157% y-y which is due to
a combination of: 1) negative earnings contribution from Newmont Batu Hijau of
USD1.4mn (vs. 1H11 gain USD65.9mn) and 2) derivative loss of USD145.8mn (vs.
1H11 gain of USD212.3mn).
Any change to
guidance?
No, but we are going to
review our earnings forecasts.
Likely share price
reaction?
Depending on overall
market performance, we expect a flat share price reaction to the results
announcement.
Key statistics
Key
figures of the results are shown in Fig 1.
Source:
NOMURA Equity research date 27 August 2012
