BUMI PLC: Trading Update
7 January 2013
Bumi plc ("Bumi" or the "Company")
Trading Update FY 2012 * Bumi plc launches major review of capex programme * Mine plan being reviewed against a backdrop of weak coal prices * Berau on track to meet 21mt production for 2012 - production expected to increase to 23mt in 2013
Bumi plc sets out below key factors affecting its operating performance in respect of 2012.
Average realised selling prices
The Company has been impacted by weaknesses in the coal price, particularly during the second half of the year. As a result realised selling prices for the year are expected to be around $70.0/t compared to $81.4/t for 2011.
Production for Berau is expected to be in line with previous guidance at 21 million tonnes of coal for the full year. 2013 production is forecast at 23mt, an increase of 9.5%.
Production unit costs for the second half of 2012 are expected to be in line with the first half. Higher fuel and contractor costs have been mitigated through a review of the mine plan and consequent reduction in stripping ratio and hauling distances. Further cost saving initiatives are underway.
PT Bumi Resources Tbk results
PT Bumi Resources Tbk recently issued its audited results, under Indonesian GAAP, for the nine months ended 30 September 2012. The net loss for the period is reported as $655m and Bumi plc will be consolidating its 29.2% share of this loss (after appropriate IFRS and consolidation adjustments) in its income statement for 2012, having classified its investment in Bumi Resources as an associate up to 30 September 2012. As previously announced, this classification has been modified to an investment, the effect of which reclassification will be a material, non-cash charge.
Given the weak coal price environment, the Company has focused on lower cost pits and deferred some of its expansion plans, particularly the overland conveyor and power plant. The Company continues to target a medium term production target of 30mt per annum.
Commenting on the full year, Nick von Schirnding, Chief Executive Officer said "Our near term strategy is very clear: to effect a separation from Bumi Resources and to maximise value in our operating subsidiary, Berau. We have taken immediate steps to mitigate the on-going impact of lower coal prices by adjusting the mine plan for Berau, targeting lower stripping ratios and reducing hauling distances. Expansion must be profitable and sustainable and we believe that the conditions are not right for the c$288m proposed overland conveyor and power plant projects at Binungan to proceed at this juncture. These projects will be revisited as market fundamentals start to improve. In the meantime we will focus on further initiatives to drive down our cost base and ensure we have optimal operating management in place across our business."
An updated investor presentation was published today on the Bumi plc website.
Full year results will be published on 21 March 2013.
For enquiries, please contact:
Jayesh Pankhania +44 (0)20 7201 7506
Edward Simpkins +44 (0) 20 7251 3801
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