- One of Japan's largest general trading company, Marubeni Corp., took coal company PT Indika Energy Tbk (INDY, Rp3.700), Korea Midlane Power Corp., and Korea Samtan project to build a 1,000-megawatt power plant in Tanjung Jati, Cirebon.
Projects with investment worth U.S. $ 1.5 billion to U.S. $ 2 billion done by forming a consortium of four companies named Cirebon Electric Power. (Investor Daily). - Bumi Plc agreed to release their stake in PT Bumi Resources Tbk to Bakrie Group for U.S. $ 501 million. This value was claimed to be more expensive than its book value. (Bisnis Indonesia)
- A German multinational petrochemical company, Ferrostaal Industrial Projects GmbH, invites PT Chandra Astri Petrochemical Tbk (TPIA, Rp2.675), a company owned by Indonesian tycoon Prajogo Pangestu, to build a petrochemical plant. The factory located in Bintuni Bay, West Papua, was worth U.S. $ 1.8 billion or equivalent to Rp 15,25 trillion.
In the other article, petrochemical prices in late June reported by Inaplas up 2.6% to U.S. $ 1,312 per metric ton which is the first increase since the beginning of the year due to the U.S. and European economies began to improve. (Kontan) - PT Wijaya Karya Tbk (WIKA, Rp2.250, NEUTRAL TP: Rp2.200) plans to increase the share of ownership in the joint venture in Myanmar up to 40% within the next 3 years. Currently, the company only has 10% share of the capital investment of U.S. $ 20 million.
The composition of these shares will be split between Wika and PT Wika Beton, 50% respectively. Thus, the company will increase capital investment 4 times the initial capital to get stake' percentage up to 40%. The funds will be used to increase the stock comes from internal cash. (Bisnis Indonesia) - PT Holcim Indonesia Tbk (SMCB, Rp2.675, SELL, Rp 3,000) to prepare initial production of Tuban I plant with a capacity of 1.7 metric ton in August. SMCB hopes the plant can produce 850,000 tonnes at the start of production, half of the total capacity. Early next year, the plant will produce a maximum capacity of 10 metric tons per year.
SMCB will start preparing to develop Tuban II plant with a capacity of 1.7 metric tons which will be completed by 2015 and will cost U.S. $ 800 million. (Kontan)
Showing posts with label bumi plc. Show all posts
Showing posts with label bumi plc. Show all posts
Friday, July 19, 2013
Indonesia Market Summaries 19 July 2013
Wednesday, June 12, 2013
Borneo Lumbung to pay off debt to Standard Chartered this year
PT Borneo Lumbung Energi & Metal Tbk (BORN) expects to sell 20% stake in subsidiary PT Asmin Koalindo Tuhup (AKT), issue bonds, and a rights issue to pay off debt to Standard Chartered Bank consortium which remaining USD 900 million this year.
Alexander Ramlie, Director of Borneo Lumbung Energi & Metal, said that 20% AKT stake selling to POSCO - a Korean company targeted for completion this year.
In addition to AKT stock sell, BORN will issue bonds with proceeds target USD 300 to 400 million. The proceeds will also be used to pay off the debt.
The issuance of the bonds is waiting the completion of AKT stock sell and the completion of separation of Bakrie & Brothers from Bumi Plc scheduled on July 2013.
The company is also exploring the issue of new shares (rights issue), this corporate actions are still waiting for coal prices trend. Current coal price is USD87 per tonne, this is far below the economic price of approximately around USD 110 per tonne.
for Indonesia market Summaries 12 June 2013
Alexander Ramlie, Director of Borneo Lumbung Energi & Metal, said that 20% AKT stake selling to POSCO - a Korean company targeted for completion this year.
In addition to AKT stock sell, BORN will issue bonds with proceeds target USD 300 to 400 million. The proceeds will also be used to pay off the debt.
The issuance of the bonds is waiting the completion of AKT stock sell and the completion of separation of Bakrie & Brothers from Bumi Plc scheduled on July 2013.
The company is also exploring the issue of new shares (rights issue), this corporate actions are still waiting for coal prices trend. Current coal price is USD87 per tonne, this is far below the economic price of approximately around USD 110 per tonne.
for Indonesia market Summaries 12 June 2013
Monday, April 15, 2013
Coal Industry Overburdened
The Indonesian Coal Sector Report, titled “Overburdened” suggesting another challenging year with more work or earnings pressure for coal producers across the industry.
Interestingly Bumi Plc on the same day, after report dissemination, made another disappointing announcement on the quality of its balance sheet. The new management of Berau Coal Energy (BRAU IJ) has concluded that there is not sufficient evidence to support the capitalization of certain expenditures totaling US$94mn, in particular US$56mn attribute to deferred stripping cost and US$38mn attributed to landowner payment. Therefore, the management likely to expense in FY12 income statement.
Shifts in the global energy mix and in coal industry growth sources in developing economies, create a challenging outlook. We reinitiate our coal sector with an Underweight rating as we expect coal price to linger in 2H13 and further earnings disappointment in 2013F, leading to unattractive valuations at +1STD or about 15x P/E13F. We have a Neutral rating on PTBA and HRUM; a SELL rating on ADRO, ITMG, BUMI and BRAU.
Tight pricing for 2013, limited signs of recovery. Although the storm may dissipate and the market may see limited downside on coal prices, with 1Q13 at US$91/t (-17%YoY), we see coal price to linger in the coming quarters and we foresee US$90/ton as our 2013 reference price (-21%YoY), or about 5-10% below consensus. Spot price now at US$86.7/t. Indonesia coal export fell 6%YoY or 26%MoM along with slower Chinese coal import at 5%YoY in February 2013 due to continued sluggish power demand which fell 12%YoY, and less restocking activities as inventory remains high at 22 days.
Evolving law: torrent of regulations. Indonesian government has made a steady progress in mining regulation reform and continues to adjust its mining regulations that, in commercial and practical terms, are more stringent. Plan to seek control on national production or export (quota) are intensely considered. Plans to change from FOB to CIF for Indonesia commodity export trade will likely have negative sentiment to the industry
Where do we turn for 2013? Value plays are very difficult to come by these days especially in the mining universe due to volatile coal prices. While it is intuitive to buy the most geared name for a greater return, but it poses a potential risk of capital raising (BUMI) if coal price recovery do not materialize. Therefore, high quality names with strong balance sheet, growth potential and high cash margin will provide better support (PTBA). Companies that have expensive interest debt, lack of tax shield due to LBO structure will suffer more this year (BUMI, ADRO and BRAU).
Where we differ? Consensus may not adequately incorporate mine-life reserves (adopting an in-perpetuity approach) and potential downside risk from future treatment of actual stripping costs to align with new IFRS. Our FY13 earnings forecast are 22-59% below consensus (ex BUMI). Our adjusted blended valuation incorporates DCF as the core method, blended with earnings multiples, favors PTBA but disfavors HRUM &ITMG given its shorter mine-life reserves.
Interestingly Bumi Plc on the same day, after report dissemination, made another disappointing announcement on the quality of its balance sheet. The new management of Berau Coal Energy (BRAU IJ) has concluded that there is not sufficient evidence to support the capitalization of certain expenditures totaling US$94mn, in particular US$56mn attribute to deferred stripping cost and US$38mn attributed to landowner payment. Therefore, the management likely to expense in FY12 income statement.
Shifts in the global energy mix and in coal industry growth sources in developing economies, create a challenging outlook. We reinitiate our coal sector with an Underweight rating as we expect coal price to linger in 2H13 and further earnings disappointment in 2013F, leading to unattractive valuations at +1STD or about 15x P/E13F. We have a Neutral rating on PTBA and HRUM; a SELL rating on ADRO, ITMG, BUMI and BRAU.
Tight pricing for 2013, limited signs of recovery. Although the storm may dissipate and the market may see limited downside on coal prices, with 1Q13 at US$91/t (-17%YoY), we see coal price to linger in the coming quarters and we foresee US$90/ton as our 2013 reference price (-21%YoY), or about 5-10% below consensus. Spot price now at US$86.7/t. Indonesia coal export fell 6%YoY or 26%MoM along with slower Chinese coal import at 5%YoY in February 2013 due to continued sluggish power demand which fell 12%YoY, and less restocking activities as inventory remains high at 22 days.
Evolving law: torrent of regulations. Indonesian government has made a steady progress in mining regulation reform and continues to adjust its mining regulations that, in commercial and practical terms, are more stringent. Plan to seek control on national production or export (quota) are intensely considered. Plans to change from FOB to CIF for Indonesia commodity export trade will likely have negative sentiment to the industry
Where do we turn for 2013? Value plays are very difficult to come by these days especially in the mining universe due to volatile coal prices. While it is intuitive to buy the most geared name for a greater return, but it poses a potential risk of capital raising (BUMI) if coal price recovery do not materialize. Therefore, high quality names with strong balance sheet, growth potential and high cash margin will provide better support (PTBA). Companies that have expensive interest debt, lack of tax shield due to LBO structure will suffer more this year (BUMI, ADRO and BRAU).
Where we differ? Consensus may not adequately incorporate mine-life reserves (adopting an in-perpetuity approach) and potential downside risk from future treatment of actual stripping costs to align with new IFRS. Our FY13 earnings forecast are 22-59% below consensus (ex BUMI). Our adjusted blended valuation incorporates DCF as the core method, blended with earnings multiples, favors PTBA but disfavors HRUM &ITMG given its shorter mine-life reserves.
Monday, February 25, 2013
Market News Jakarta Feb 25 2013
Bosowa Corp investing US$600mn in cement
Bosowa is realizing US$600mn investment for new cement and packing plant this year. This is aimed to have 10-1mn capacity by 2015. The total capacity is estimated to contribute up to 20% national market share. The company has started the investment earlier this year by groundbreaking of its new plant in Maros, South Sulawesi (US$310mn), which followed by Banyuwangi, East Java (mill + packing plant = Rp1tn) and Sorong, Papua (mill = Rp679bn). In addition, the company also plans to build mill in Cilegon, Banten (Rp1tn), Amurang, North Sulawesi (Rp500bn) and new port in Barru, South Sulawesi (Rp500bn). Bosowa holds 6% market share as of Dec12, with accelerating trend. (Investor Daily)Feb13 inflation projected at 0.3-0.4% mom
The Minister of Finance Agus Martowardojo, who has been nominated to be the next central bank governor, projects Feb13 inflation to come at 0.3-0.4% mom. The figure is bigger than the realization in the same month in 2011 & 2012 at 0.13% mom and 0.05% mom, respectively. Note that the government is also planning to increase the price of 12kg LPG (Bisnis Indonesia)The government aims to realize more than 10% of budget absorption in 1Q13
The Ministry of Finance attempts to drive spending since 1Q13, targeting 10% of budget absorption. This is supported by simplified tender and procurement process which hopefully will accelerate spending. Though so, the Minister of Finance said that up until now there is not a single government institution starting to disburse budget on projects. In the same period last year, budget absorption is recorded at 11.08%, below target of 14.57% (Kontan)Moody’s downgraded BUMI’s rating to B2
Moody’s has downgraded BUMI’s debt rating to B2 from B1 with outlook remain stable. This reflects Moody’s assessment of the likelihood of lower debt-to-EBITDA ratio below 4.5x over the next 12-18 months. (Bloomberg)Bumi Plc CEO sees vote on Bakrie separation in late April
Bumi Plc CEO, Nick Von Schirnding, reported to Blooomberg that Rotschild’s defeat on EGM last week was a good outcome for Bumi’s board as the board has a firm, clear plan for Bakrie separation and focus to Berau. He sees final vote on Bakrie separation would be in late April 2013. (Bloomberg)Toyota expects cumulative Avanza sales to exceed 1mn units since established in 2004
Toyota Astra Motor (TAM) is confident that the total cumulative sales of Avanza would exceed 1mn units by end of this year, since the model was first being introduced in 2004. As of last month, TAM already sold a total of 912,842 units of Avanza since the model was first introduced in 2004. (Bisnis Indonesia)Mitsubishi aims 20% growth in passenger car sales
Krama Yudha Tiga Berlian Motors, the exclusive dealer of Mitsubishi, expects its passenger car sales in 2013 to grow by 20% higher from last year’s position of 22,464 units. Successful new launchings, such as the new Outlander Sport and Mirage, helped increasing Mitsubishi’s grip in the passenger car segment. Including the commercial car segment, Mitsubishi eyes to sell 155,000 units this year, against 148,918 units realized sales in 2012. (Bisnis Indonesia)Daihatsu aims 15% market share in the domestic market
Daihatsu projects 15% market share in the domestic 4W market this year, with a total sales of 165,000 units, relatively stable as compared to last year’s realization at 163,000 units. The projection was made based on total national car sales of 1.1mn units, unchanged from last year.Comment: The projection implies monthly run-rate of 13,750 units, versus last year’s monthly average of 13,562 units. We view this forecast as conservative. This year, Daihatsu should benefit from the realized booking of its LCGC, Daihatsu Ayla. The regulation for LCGC itself is expected to be announced this quarter, allowing Daihatsu to deliver the cars to the consumers. We forecast monthly average sales of 17,587 units for Daihatsu this year, after factoring in 36,000 units of Daihatsu Ayla sales for the entire year.
Subscribe to:
Posts (Atom)