Samindo Capital Expenditure Increase by 343% in 2018
PT Samindo Resources Tbk (the company), a coal mining coal provider in Indonesia, prepares capital expenditure (capex) funds of USD13.8 million for 2018. The figure has jumped 343 percent compared to its capital expenditure in 2017.
The increase in capital expenditure funds is nothing but a preparation in order to respond to the increase in targets charged by clients in 2018. As previously stated, the target ofoverburden production has increased by 13 percent, while coal production has increased by 10 percent.
"For the last two years Samindo's management has decided to postpone the purchase of heavy equipment due to the unfavorable condition of the coal industry," said Samindo Resources Investor Relations Zaki, in a written statement in Jakarta, Wednesday, December 13, 2017.
Most of the capital expenditure funds are allocated for the purchase of heavy equipment in the activity of overburden removal and coal production. Some heavy equipment that is targeted include dump trucks, excavators, cranes and pumps. Currently there are two active contracts namely contract with PT KIDECO Jaya Agung and contract with Gunung Bayan Pratama Coal.
Currently the process of ordering heavy equipment has been done and is expected in the first quarter of 2018 these tools can already be operated. Throughout 2017 coal prices are relatively stable compared with several years back and next year is predicted to remain stable.
"Therefore our clients begin to increase production, which of course positively impacts our annual target," Zaki said.
In terms of funding, most of the funding for 2018 capital expenditure funds uses internal cash. This is because Samindo has enough internal cash surplus. Up to the third quarter of 2017 cash amount reached USD26, 6 million. While the ratio of total debt is only about 21 percent of total current assets.