Adaro Minerals (ADMR) Posts 490% Surge in Net Profit in First Half of 2022

Adaro Minerals Indonesia Tbk (ADMR) reported positive financial performance in the first half of 2022. The company saw a surge in revenue and net profit during the January-June 2022 period.

Based on the company's financial report on the Indonesia Stock Exchange website on August 29, 2022, ADMR achieved a net profit of US$202 million in the first half of 2022. This represents a 490% increase compared to the same period the previous year, which was only US$34.18 million.

This increase in net profit is in line with the increase in the company's net revenue. ADMR's revenue in the first half of 2022 reached US$435.65 million, a 165% surge from the US$164.15 million recorded in the first half of 2021.

ADMR's President Director and Chief Executive Officer, Mr. Christian Ariano Rachmat, stated that Adaro Minerals' performance in its first semester as a public company was excellent. This performance was supported by an increase in the average selling price (ASP) and sales volume.

"We experienced high demand for hard coking coal products, resulting in a 9% growth in sales volume during the first half of 2022. Strong pricing conditions drove a significant increase in ASP, up 143% in the first half of 2022, as we recorded high profitability during this period," Christian explained in a press release on Monday, August 29, 2022.

Furthermore, Christian stated that although the decline in manufacturing and construction activities presents challenges for metallurgical coal currently, ADMR is well-positioned to meet its production target of 2.8 million to 3.3 million tons in 2022.

"We continue to support the internal transformation of the Adaro Group, recording several new achievements, including the planned groundbreaking for the construction of an aluminum smelter in early 2023, as the first project in the development of the world's largest green industrial estate in North Kalimantan," he explained.

In addition, Adaro Minerals recorded cost of goods sold of US$148.24 million in the first six months of 2022, compared to US$102.37 million in the first half of 2021. This was due to increased royalty costs resulting from higher volume and ASP, mining costs, coal processing costs, and transportation and handling costs.

Specifically, the increase in volume in the first half of 2022 led to a 30% increase in mining costs to $30 million, from $23 million in the same period the previous year. Furthermore, coal processing costs increased by 65% to $18 million from $11 million in the first half of 2021.

Transportation and handling costs increased by 45% to $34 million from $24 million in the first half of 2021. Fuel costs increased by 97% to $11.9 million from $6.1 million in the same period the previous year.

Meanwhile, the company's total assets at the end of the first half of 2022 increased by 42% to $1,140 million from $804 million at the end of the same period the previous year. The company's total liabilities at the end of the first half of 2022 increased by 27% to $731 million compared to $577 million the previous year.