Reuters: Hot Stocks: UPDATE 1-Bumi Resources' Indonesian shares slide after H1 loss

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UPDATE 1-Bumi Resources' Indonesian shares slide after H1 loss Aug 28th 2012, 05:01 Tue Aug 28, 2012 1:01am EDT JAKARTA Aug 28 (Reuters) - Shares in Indonesia's Bumi Resources, Asia's biggest thermal coal exporter, fell more than 15 percent to a three-year low at one point on Tuesday after the company reported a net loss for the first half of the year. Bumi suffered a net loss of $322.1 million in the January-June period, compared with a restated net profit of $231.7 million in the same period last year, because of higher costs, lower coal prices and non-coal trading losses, the company reported on Sunday. The company's Indonesian shares, now down 65 percent so far this year, fell 5 percent on Monday, but trade was limited and lacked transparency due to technical problems that halted trading on Indonesia's stock exchange. By 0441 GMT on Tuesday, the stock had fallen 12.4 percent to 780 rupiah, the lowest since March 2009. Turnover was the highest on the exchange, with more than 220 million shares traded. The Jakarta Composite Index was only down 0.1 percent. Bumi, listed in London under a joint venture with financier Nat Rothschild and Indonesian investor Samin Tan, has also seen its London stock slump 60 percent this year, hit by boardroom disagreements and worries over debts. Bumi sold 10 percent more coal, or 32.3 million tonnes, in the first half of the year, but at average prices that were 3.2 percent lower than in 2011. Thermal coal prices have been battered this year, hitting a two-year low in June. "Questions now remain on the core profitability for Bumi, given the first half 2012 interest bill of $324 million outweighed $239 million of operating income...with prices likely to trend lower in the second half of 2012 and limited ability to lower the costs," said Riaz Hyder at Macquarie in a report on Bumi on Tuesday. The firm's costs of leasing equipment more than doubled in the first half of this year, while maintenance costs rose nearly 15 percent. Overall operating expenses rose 48 percent. Mining sector growth in Indonesia, the world's largest exporter of the thermal coal used in power stations, has led to rising costs and wages at a time of softening global commodity demand. Bumi Resources also booked a $50.3 million foreign exchange loss that it attributed to a weakening rupiah currency, as well as a derivatives loss of $145.8 million due partly to a fall in the value of equity options after its shares fell. "The huge net income drop is actually due to series of accounting policy adjustments which reversed a lot of previous gains into losses," said Dileep Srivastava, a director at Bumi. "As the market turns around, all these 'below the line' losses will once again turn into gains," Srivastava said. Investors and rating agencies seem less confident that a rebound is coming soon. Australian thermal coal prices fell toward $91 a tonne last week on sluggish sales as buyers from China, the world's top consumer, remained on the sidelines. Moody's lowered Bumi's rating to B1 earlier this month, while Standard & Poor's lowered Bumi to BB- with a negative outlook, citing its debt costs and weak cash flow. Link this Share this Digg this Email Reprints

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