Thursday, July 28, 2011

StraitsAsiaRes

StraitsAsiaRes: Generally as expected 2Q results. 2Q rev at $225.8m +17.9% yoy +5.7%qoq with net profit at $38.9m +67.5% yoy -5.9% qoq. ASP for 2Q was up at $94.6/ton +31.1% yoy +15.2% qoq but was offset by higher cash costs at $60.2/ton +26.7% yoy +30.5% qoq.

Higher ASPs were due to use of index-linked pricing coupled with a favourable coal price environment but costs grew from higher fuel costs attributed to rise in diesel prices and longer waste dumping distances. As of Jun 2011, co has committed 87% of planned production for 2011 for sale and approx half of remaining shipments for the yr are priced on an index linked basis. Other dev include further exploration at Sebuku and full results from drilling programme can be expected in 2H2012.

A dividend of US 4.24c (S 5.09c approx) has been declared in line with co’s 60% dividend payout policy. Nomura maintains Neutral with TP$2.75. CIMB maintains Underperform with TP$3.29

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