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Indo Tambangraya sets IDR 1.29 trillion Capex for greenfield project

Published on 03/03/2023 at 04:50 GMT+7 Reading time

Coal supplier company PT Indo Tambangraya Megah Tbk (ITMG) has budgeted IDR 1.29 trillion (US$ 84.3 million) for its 2023 Capital expenditure (Capex) to support its greenfield project.

Established in 1987, the company integrates mining, processing and logistics. Its main focus is coal mining operations and coal sales. ITM also runs coal terminal operations, port loading facilities, power plant operations and mining contractors. The company has transitioned to renewable energy sources, such as hybrid solar power plants, as its future energy business.

Higher net profit

ITM's Capex of IDR 1.29 trillion in 2023 has a 133.5% increase year-on-year (YoY), compared to 2022. The company will use 47.3% of its Capex to facilitate operational activities and 21.4% for its greenfield project, bisnis.com reported on March 3, 2023.

It recorded a net profit of US$ 306 million, or 29.2% lower than Q3 of the same year but increased by 50.2% compared to the same period of last year.

In 2022, the company's net profit reached US$ 1.2 billion, a 152.3% increase compared to 2021, which was in line with the analyst estimation of 100.6%, and slightly higher than the estimated consensus of 107.1%.

Risks in coal industry

There are two major risks in coal industry:

Financial risk: In Q4 2022, there was a decrease in the price of coal to US$ 198 per ton or a decrease of 6% from the previous period.

Production risk: In 2023, the company targets to produce coal with flat progress, about 16.6 million to 17 million tons. This is because there is no production from the Embalut mine and due to unpredictable weather conditions.

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