Performance Trend – Q1/2020 (YoY)
A benchmarking toward 10 coal-mining companies (among 22 public coal-mining companies listed at Indonesia Stock Exchange) shows that the sales trend of 6 companies (60%) was decreasing, mainly caused by the decreasing price of coal in the first quarter of 2020. On average, however, decreasing sales from those 10 companies are only 0.04%. Four of those 10 companies were still able to increase their sales volume for meeting the current-period contracts. This condition, however, did not match up with the profitability (due to the depressing price of coal, those companies had to bear a loss, as the impact of the increase in operating expenses that is not comparable to the sales increase)
Along the year 2019, the average reference price of coals (HBA) was USD77.89 per ton. Since January 2020, however, the HBA is fluctuating. In January, the HBA was USD65.93 per ton, down from USD66.30 per ton in December 2019. In the following months, the HBA increased to USD66.89 per ton in February and USD67.08 per ton in March.
Trend of payment manner – Q1/2020 (YoY)
A benchmarking toward 10 coal-mining companies (among 22 public coal-mining companies listed at Indonesia Stock Exchange) shows a delay in account receivable (AR) and account payable (AP) in Q1/2020 for 31-60 days from the agreed schedule. On average, the AR and AP days for each of the 10 coal-mining companies is varying from one to another (from 1-30 days, 31-60 days, 61-90 days to >90 days or even >180 days).
Obstacle – 2020
- The sharp decline in coal prices since late 2018, due to the USA-China trade war. In QI/2020, the coal price reached its lowest point since 2016, due to the Corona pandemic (Covid-19) and regional quarantine (lockdown) in many countries that affected the demand for coal.
- The declining demand for coal as an impact of the deceleration of economic activity, including the closing of factories and power plants due to the spread of Covid-19.
- Overall, except for the price pressures, there are no issues in the coal-mining contract, coal storage, or even coal shipment. The price movement and sentiment in coal prices are considered quite simple and easier to manage. Thus, the decrease is not as significant in the CPO and oil&gas industries.
- Although quite limited, the possible rebound of coal prices is higher in the future (semester II 2020).