Anticipating a New Contract, Samindo Resources (MYOH) Will Increase the CAPEX Next Year by 28.2%
PT Samindo Resources Tbk (MYOH) seems very optimistic about the coal mining services business next year. One evidence is that the integrated mining service company increased 28.2% of the expenditure or capital expenditure (capex) in 2019 to US $ 17.7 million, from this year which was only US $ 13.98 million.
From next year's US $ 17.7 million capital expenditure, US $ 14.5 million will be spend on the purchase of 10 of 100 tons of transport capacity dump trucks for overburden removal and the remaining US $ 3.2 million for coal hauling. For information, Samindo currently has 133 dump trucks and 18 excavators.
Ahmad Saleh, Independent Director of Samindo Resources revealed, the goal of a significant increase in capital expenditure next year is actually the company's efforts to anticipate new contracts currently being explored by the company. "We are currently undergoing due diligence," he said on Tuesday (4/12).
Understandably, currently the mining service contract that runs out in plain sight belongs to the Bayan Resources coal mine. Ahmad said, Bayan's contract will expire in December 2019 with a production target of 5.6 million tons. "This year our target for the Bayan contract is actually only 5.8 million tons, but this is already above the target of 6.7 million tons," he said.
He said, the total target of overburden removal from next year from Bayan and Kideco clients reached 58.1 million bank cubic meters (bcm), up 6.6% from this year's projection of 54 , 6 million bcm. "We also project coal getting in 2019 by 10.7 million tons, up from the 2018 projection of 10.1 million tons," Ahmad said, Tuesday (12/4).
He said that stable coal prices were the main factor driving the company's target. Moreover, since the last year coal prices have continued to rise and are relatively stable. "Most coal operators are starting to boost production, this also happens to our clients," he said.
Ahmad said, he also projected revenue to rise next year along with operational activities which also increased. However, his side has not been able to provide detailed figures because the performance of the IV quarter of 2018 has not been issued. "Next year, income will definitely increase, if profits will certainly have to see later," he added.
Meanwhile, Ahmad Zaki Natsir, Head of Relations at Samindo Resources, added that for this year's overburden removal production targeted at 54.5 million bcm has reached 92% at the end of November or around 53 million bcm, while production has reached 89% of Coal production target is 10.1 million tons. "There are some obstacles indeed at the beginning of operations, so we are targeting total coal production to be only 95 percent of the target of 10.1 million tons," he said.