With low coal prices early this year, coal miner PT Indo Tambangraya Megah (ITMG) managed to chart growth last year and therefore, analysts estimate that the company may maintain its growth.
According to data from Bloomberg, coal prices listed in ICE Futures Europe as per export contracts in March, saw prices stagnate at US$84 per metric ton. The same period last year saw prices of $41.85 per metric ton.
NH Korindo analyst Raphon Prima noted that ITMG’s average sale price (ASP) this year will continue rising this year, when usually ITMG’s ASP is discounted at 20 to 25 percent in the global average market.
“If the global prices are currently at US$80 per metric ton, that means ITMG’s ASP is still about $60 per metric ton,” Raphon said as quoted by kontan.co.id on Monday, adding that the company’s ASP drastically rose by the fourth quarter of last year until they booked a profit growth of 107 percent, making coal prices relatively stable in the future.
However, Mirae Asset Sekuritas analyst Andy Wibowo Gunawan predicted that ITMG’s coal sales will instead fall by 200,000 tons in 2017, based on a recent research, but sales estimates are thought to reach 26 million tons by year’s end.
The decrease is due to being compared with the 2016 achievement, due to a higher global coal price; also, sales target volumes for the year are targeted to decrease.
“But their net profits will still increase by 17.2 percent to $82.6 million,” he added.
Source: The Jakarta Post