Coal miner PT Adaro Energi 's profits shrank by 17.36% year-on-year (yYY) to US$ 98.17 million in the first quarter in the face of falling coal prices and declining demand in the coronavirus-ridden Asian economy.
The publicly-listed coal mining company, which was the most profitable of its kind last year, posted an 11 percent drop in sales to $750 million in the first quarter, according to Adaro 's latest financial report released on Friday.
“Our performance in this year's first quarter reflects the operational excellence of our core coal assets as we recorded solid production volume amid the difficult market condition," Adaro president director Garibaldi Thohir said in a statement on Friday. "In this challenging time for the global economy and the coal market, we continue to improve our efficiency, ensure discipline in spending and maintain a solid balance sheet."
Adaro 's revenue decreased as its higher sales volume was offset by falling prices. The annual sales volume of the company increased by 8 percent to 14.39 million tonnes. Coal prices fell sharply by 27.3 per cent a year to $66.6 per ton in the January-March period, based on Indonesia 's Coal Benchmark (HBA) prices.
The company's costs also decreased by 5 percent to $552 million due to reduced mining and fuel consumption as Adaro implemented cost control measures.
Global demand for coal collapsed earlier this year as companies and industries around Asia – the world's largest coal market – suspended their businesses at the behest of their respective governments following the outbreak of COVID-19.
Like other Indonesian coal miners, Adaro faces export risks over India 's recently extended lockdown. The South Asian country is Indonesia's second-largest coal buyer to China.
The company trading on the Indonesian Stock Exchange (IDX) under the ADRO stock symbol fell 2.12 per cent on Friday. The Jakarta Composite Index (JCI) was down 0.14 percent.
