Geo Energy Group's office and site office

Offices Locations
  • Singapore
  • Jakarta
Site Offices
  • Melak
  • Samarinda

Email This Print ThisFinancials

First Quarter Financial Statements Ended 31 March 2017

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Consolidated statement of profit or loss

Income Statement

Consolidated statement of profit or loss and other comprehensive income

Comprehensive Income

Balance Sheet

Balance Sheet

Review of the performance

Income Statement

Financial performance

(1Q2017 vs. 1Q2016)

Revenue from continuing operations increased by US$87.4 million to US$99.3 million in 1Q2017 mainly due to revenue increased from coal mining as well as new revenue from coal trading and coal mining management services during the period. As compared to 4Q2016, revenue increased by US$7.3 million to US$99.3 million.

The Group sold 2,212,893 tonnes of coal from the SDJ mine in 1Q2017, a great increase from the 484,836 tonnes sold in 1Q2016. This is a slight decrease as compared to 2,362,207 tonnes sold in 4Q2016, mainly due to the rainy season which had slowed down production. The average selling price of coal in 1Q2017 was US$39.45 per tonne, an increase of US$0.52 over the US$38.93 per tonne in 4Q2016.

In 1Q2017, the Group also traded 411,421 tonnes of coal sourced from third parties at an average selling price of US$28.44 per tonne and commenced its coal mining management service for PT Angsana Jaya Energi ("AJE"), a holder of coal mining permit in South Kalimantan as announced earlier.

Included in the 1Q2017 net revenue was a marketing price adjustment of US$2.4 million, as compared with U$0.6 million for 1Q2016 and US$2.3 million for 4Q2016, respectively.

Gross profit was US$25.3 million in 1Q2017. Excluding non-cash depreciation and amortisation totalling US$4.9 million, the Group's cash gross profit in 1Q2017 was US$30.3 million, out of which US$29.9 million was contributed by the coal mining segment. As compared with 4Q2016, Group's cash gross profit from coal mining segment decreased by US$2.8 million due to the slightly lower volume shipped due to the rainy season.

Cash profit for coal mining segment was an average of US$13.52 per tonne compared to an average of US$13.86 per tonne in 4Q2016 and US$3.02 per tonne in 1Q2016. The slight decrease between the average per tonne for 1Q2017 and 4Q2016 was mainly due to increased production costs arising from the increase in coal price as some of the mining costs were pegged to the Indonesia Coal Index ("ICI") as well as marketing fee paid to Engelhart Commodities Trading Partners (Singapore) Pte Ltd ("ECTP").

The ICI for 4200 GAR (Gross As Received) price index for coal sales increased from the average index price of US$41.95 per tonne in 4Q2016 to US$42.77 per tonne in 1Q2017, an increase of US$0.82 per tonne. As compared to 1Q2016 average index price of US$26.34 per tonne in 1Q2016, the average index price increased by US$16.43 per tonne or 62%.

Balance Sheet

Profit before income tax of US$19.9 million in 1Q2017 includes:

Income tax expense increased by US$5.4 million, from US$0.2 million tax credit in 1Q2016 to US$5.2 million tax expense in 1Q2017. The increase was due to the Group's turnaround from loss to profit before tax position. Overall the effective tax rate was 26%.

Overall, the Group's net profit for the period increased by US$17.2 million, from US$2.6 million net loss in 1Q2016 to US$14.6 million net profit in 1Q2017.

Financial Position – Group

Current Assets

Current assets were US$180.0 million as at 31 March 2017.

Non-current Assets

Non-current assets decreased by US$2.8 million, to US$118.8 million as at 31 March 2017. The decrease was mainly due to the depreciation and amortisation on property, plant and equipment and deferred stripping costs of US$4.6 million and US$0.5 million respectively. These were offset by the increase in deferred tax asset of US$1.0 million for tax losses that was audited and confirmed but was previously written off on claiming Tax Amnesty under the Indonesia laws.

Current Liabilities

Current liabilities increased by US$43.7 million to US$158.1 million as at 31 March 2017. This was mainly due to reclassification of the amount owing on MTN of US$72.2 million from non-current liabilities to current liabilities as it matures within a year. Beside the notes payable, current liabilities as at 31 March 2017 mainly comprised trade and other payables of US$20.8 million (mainly due within 90 days), accrued production costs from the operations of the SDJ coal mine and other accrued expenses totalling US$17.1 million, and income tax payable of US$12.5 million. It also includes a US$3.0 million refundable performance guarantee deposit from the SDJ mining contractor, and US$32.5 million prepayment from ECTP on the SDJ coal offtake.

Non-current Liabilities

Non-current liabilities decreased by US$68.5 million to US$1.6 million as at 31 March 2017, mainly due to the reclassification of the amount owing on MTN to current liabilities.

Financial Position – Company

Current Assets

Current assets increased by US$6.1 million to US$134.4 million as at 31 March 2017.

Current assets as at 31 March 2017 of US$134.4 million comprise mainly cash and bank balances of US$40.6 million, receivables from external parties upon the disposal of the mining and haulage services business of US$25.2 million, intercompany receivables of US$31.0 million, refundable deposit and advances relating to the proposed acquisition of the TBR mining concession of US$31.5 million (please refer to the relevant announcements for further information), refundable deposit of US$3.1 million to secure the rights to use a jetty, and US$3.0 million refundable performance guarantee deposit from the SDJ mining contractor.

Non-current Assets

Non-current assets comprise mainly investment in subsidiaries of US$98.0 million.

Current Liabilities

Current liabilities increased by US$78.3 million to US$144.2 million as at 31 March 2017. This was mainly due to reclassification of the amount owing on MTN from non-current liabilities as it matures within a year, and an increase in intercompany payables.

Non-current Liabilities

Non-current liabilities as at 31 March 2017 comprises provision and finance leases. The decrease of US$68.7 million, to US$0.1 million as at 31 March 2017, was due to reclassification of amount owing on MTN to current liabilities.


Cash Flow (1Q2017 vs. 1Q2016)

Net cash generated from operating activities in 1Q2017 was US$9.0 million, as compared to US$2.0 million in 1Q2016. Operating cash flows before movements in working capital was an inflow of US$28.4 million, mainly due to the Group's operating profit in 1Q2017. However, movements in working capital were an outflow of US$18.3 million, as compared to the US$0.4 million cash inflow in 1Q2016. The outflow was due to increase in trade and other receivables, deposits and prepayment and a reduction in trade and other payables which were set-off by a decrease in inventories. In addition, US$1.1 million taxes were paid.

Net cash used in investing activities in 1Q2017 of US$17.7 million was mainly due to advance payments for conditional acquisition of TBR mining concessions of US$13.0 million, deferred payments for purchase of property, plant and equipment on SDJ of US$4.5 million and purchase of property, plant and equipment of US$0.3 million.

Cash used in financing activity in 1Q2017 of US$2.5 million was mainly due to MTN interest paid of US$2.5 million during the period.

As a result of above movement, the Group recorded a net decrease in cash and cash equivalents of US$11.2 million in 1Q2017.


The ICI continues to show promising signs of a sustained uptrend on coal prices. ICI 4200 GAR coal prices had increased from US$26.69 per tonne in January 2016 to an average indexed coal price for the quarter of US$42.77 per tonne, an increase of US$16.08 per tonne or 60% in the period.

China's policies to reduce its domestic coal production and weather disruptions affecting mines in Australia have tightened Asia's coal markets, while demand in China and other key import markets remains strong, lifting prices1. The Indonesian coal mining industry had earlier benefitted from policy developments in China where the number of statutory working days for coal miners were reduced from 330 days to 276 days a year, and sustained demand due to the high switching costs for energy and long-term investment nature of coal-fired power plants.

In 1Q2017, the Group continued to deliver on its commitment to accretive acquisitions. On the proposed acquisition of PT Parisma Jaya Abadi ("PJA"), the Group had negotiated with the Vendor, Sunrise Wealth Success Limited, for the reduction of the purchase consideration2. The Group is also still in the process of completing the acquisition of TBR, which is a mining concession strategically located next to the Group's SDJ coal mine. After the completion of these acquisitions, targeted to be in 2Q2017, the Group's coal reserves are expected to increase to over 90 million tonnes.

We remain on track to deliver our target of 10 million tonnes for production and sale in 2017, which could see the Group becoming one of the top 10 Indonesia coal producers. Based on the current cash profits of over US$10 per tonne, this would translate to an operating free cash flow of not less than US$100 million in 2017 at today's coal price and current production cash costs.

From a position of stronger cash flows and profitability, the Group is embarking on an exercise to optimise its capital structure taking into account the MTN due in January 2018. The MTN carries a 7 percent interest rate per annum. We are exploring ways to lower our weighted average cost of capital, as well as reviewing the gearing and capital structure for our Company.


1 Asia's coal markets tighten on Indonesia port probe, Australian cyclone. 29 March 2017, Reuters.

2 Please refer to the announcements dated 29 February 2016 and 24 September 2013 for previously disclosed details of the relationship between the Group and PJA.