Two Years of Difficult Times, 2018 MYOH Profit Rocketed 151.57%
Jakarta, CNBC Indonesia - Issuer provider of coal mining services, PT Samindo Resources Tbk (MYOH) recorded a fantastic growth in net income throughout 2018. Even though in 2016 and 2017 the company's profit declined.
Based on the company's financial report published by the Indonesian Stock Exchange (IDX) MYOH profit rose 151.57% YoY to US $ 30.9 million or equivalent to Rp 440.31 billion from the previous US $ 12.28 million (US $ 1 exchange rate = IDR 14,250).
The company finally was able to re-register its net margin (net margin) above 15%. Last year, the company posted a net margin of 17.19%.
The growth in net income in 2018 was not only supported by an increase in revenue in all of the company's service activities which shot up due to increased assets, such as dump trucks.
MYOH's main service, which is overburden removal services, rose 33.59% YoY to US $ 175.89 million from the previous US $ 131.66 million. This achievement even exceeds the 2015 revenue of US $ 156.93.
MYOH coal transportation services also increased 15.98% YoY to US $ 62.8 last year, but this revenue is still lower than 2015 revenues which touched US $ 67.81.
Furthermore, drilling and exploration services have consistently grown from year to year. In 2018, the service activities grew by 7.23% YoY to US $ 2.42 million. However, this growth is lower than in 2017 of 12.64% YoY.
On the other hand profit growth is also supported by the company's efficiency program.
In a company press release delivered in October 2018, the company stated that it had implemented an efficiency program to reduce company expense items such as production costs and administrative costs.
This program seems to be a success because the ratio of cost of goods sold successfully suppressed by 2018 was in the range of 79.18% or US $ 190.91 million. In fact, in 2018 the proportion of cost of goods sold to total revenue reached 85.43% or US $ 160.67 million.
The general costs and administration of the company were also successfully suppressed and dropped 8.19% YoY to only US $ 8.65 million. This decrease was supported because the amount of compensation given by the company fell by 11.82% YoY.
In terms of performance, MYOH seems to have succeeded in satisfying investors with profit skyrocketing. However, investors still need to be aware of the company's future performance.
The reason is, 92.61% of the company's revenue is based on one client, namely PT Kideco Jaya Agung. If then the cooperation contract is not extended or Kideco's mining activities decline, it will certainly threaten the company's income.
The risk of decreasing coal mining activities is very likely.
How not, the average price of Newcastle coal in 2019 is only US $ 96.8 / ton, while in 2018 the average price of coal reaches US $ 119.9. This decrease can be implied with the risk of decreasing demand by 19.27% ??for the first quarter of 2019. If coal demand decreases, it is certainly possible that coal mining activities will also decline.
To avoid this scenario, of course the expansion of the company's "basket" must be added by finding new clients this year.