Any comment seniors of OB??
FY08 coal sales volume? It's around 60m tons BUMI expects FY08 coal sales vol of at least 60m tons vs. 55m tons last year. Note that this is 5m tons additional coal sales volume or almost 1/4 of ITMG. Our FY08 coal sales volume estimate is 60.8m tons (correction to 64.0m tons mentioned previously). Delivery issue? negative Ships are arranged by clients and BUMI sold its coal at FOB basis. Hence the transportation availability is on the customer's, not BUMI. KPC land dispute issue? negative The company has long cleared the issue of land dispute with PT. Porodisa. Selling price? Sees more upside BUMI has avg selling price of at least US$77/ton this year. That compared to US$44/ton last year. About 20% of its coal sales volume are not priced hence upside potential in the coal price. Refer to our email, the selling price for 5800kcal Indonesian coal to Japan priced at US$100/ton as of 4 July. Hence, assuming 10m tons priced at about US$90-100/ton, FY08 selling price could be in the range of US$79-81/ton. Our FY08 selling price is US$73.7/ton. At selling price of US$79.2/ton, FY08 earnings will be US$957.3m (EPS: US$0.049) or 17.6% earnings enhancement At selling price of US$80.8/ton, FY08 earnings will be US$999.0m (EPS: US$0.051) or 22.8% earnings enhancement 1H results? 30 Aug BUMI will report its 1H result on 30 Aug. This is due to the limited audit review of BUMI requested by BNBR. Rec: Maintain buy Under our old FY08 assumption, BUMI is trading at 2008E PER of 17.0x The forecasted 2009F PER is 8.8x if we are using: - the benchmark coal price FY09 at US$150/ton (spot price now traded US$194/ton) - selling price averaged US$98/ton (for 5800kcal coal price now is US$100/ton) - sales volume of 68.6m tons
