Geo Energy reports 2HFY2022 earnings of US$56.6 mil, 56% lower y-o-y

A final dividend of 4 cents per share has been declared, bringing the total dividend for FY2022 to 9 cents per share.

Geo Energy RE4 has reported earnings of US$56.6 million ($76.4 million) for the 2HFY2022 ended Dec 31, 2022, 56% lower than the earnings of US$129.8 million.

2HFY2022 revenue fell by 13% y-o-y to US$365.1 million due to the lower sales volume during the period and offset by higher average selling prices (ASPs).

Gross profit fell by 37% y-o-y to US$120.6 million with cash profits decreasing to US$132.2 million from US$204.8 million.

For the FY2022, earnings fell by 9% y-o-y to US$161.6 million as the group made a full allowance for expected credit loss (ECL) of US$15.4 million on the receivables arising from advance payments for coal purchase and refundable deposit to acquire interest in two mining concessions in 2019.

However, revenue for the FY2022 increased by 14% y-o-y to a record-high of US$733.5 million due to surge in the Indonesia Coal Index (ICI) 4 prices and ASP, which rose by 2.8% y-o-y to US$72.14 per tonne in 2022. This was offset by the lower sales volume during the year.

Gross profit increased by 4% y-o-y to US$272.1 million with cash profits increasing to US$295.3 million from US$285.0 million.

Earnings per share (EPS) for the 2HFY2022 and FY2022 stood at 4.02 US cents and 11.46 US cents on a fully diluted basis respectively.

As at Dec 31, 2022, cash and cash equivalents stood at US$232.0 million.

A final dividend of 4 cents per share has been declared, lower than the 5 cents per share paid out during the same period the year before.

Together with the first three interim dividends declared, the group’s total dividend for the FY2022 stands at 9 cents per share.

“2022 saw an uncertainty on the global energy markets as geopolitical situations, and Russia’s invasion of Ukraine led to a sharp turnaround in traditional trade flows for the energy market. Energy prices increased sharply, and demand remained strong throughout 2022,” says Charles Antony Melati, Geo Energy’s executive chairman and CEO.

“By transitioning from a mining services provider to a coal asset owner, Geo Energy has managed to maximise the opportunities provided by rising coal prices and delivered record performances in 2021 and 2022,” he adds.

Coal prices are expected to hold up well in 2023 amid the energy supply shortage and supply chain disruptions, says the group.

“The increase in coal supply is restricted by lack of financing due to environmental concerns over the industry. Due to the lack of alternative price-competitive energy sources, coal remains as the preferable option to supplement global energy imbalance,” notes Melati.

Looking ahead, the group plans to increase production and sale of coal from its BEK mine, and further develop its STT mine, including exploration drilling, after receiving the required IPPKH and permits. Commencement of operations are planned thereafter, before 2024 if conditions permit, he adds.

“Going forward, we shall work closely together to build on our 2022's performance. We are targeting value-accretive acquisitions for the group, and we will make an announcement in accordance to SGX listing rules when such development materialises.”

Shares in Geo Energy closed 0.5 cents lower or 1.52% down at 32.5 cents on Feb 27.

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