Bumi Resources expects to bounce back from annual losses

Indonesian thermal coal producer PT Bumi Resources expects sales to rise eight per cent to 74m tonnes this year, a director said Thursday.

Indonesian thermal coal producer PT Bumi Resources expects sales to rise eight per cent to 74m tonnes this year, a director said Thursday.

A day after the company announced heavy losses in 2012, Director Dileep Srivastava told Reuters that the group predicts a boost to sales will help it return to profitability in 2013.

Coal production is pegged to increase to 77m tonnes from 74m tonnes last year.

However, Asia's biggest thermal coal exporter forecast rising output costs to $46 per tonne from $45 per tonne.

"We now expect to turn around to profit early in the new year," Srivastava said.

Bumi on Wednesday posted its largest loss ever as sliding coal prices and derivatives losses erased earnings.

The price of coal at Australia's Newcastle port, a benchmark for Asia, has dropped 17% in the past year, according to data compiled by Bloomberg.

The company recorded a net loss of $666.21m in 2012, compared to net profit of $216.29m a year earlier.

It left the company with less money to pay off its debts and to revive the company from a troubled tie-up with the London-listed Bumi plc.

Bumi plc, which owns 29% of Bumi Resources, is working to separate from the Indonesian unit and its founders the Bakrie Group.

The Bakries have proposed exchanging their 23.8% of Bumi Plc for 10.3% of Bumi Resources. Under the plan, Bumi Plc would sell the remaining 18.9% of its Bumi Resources stake for $278m to the family.

In February, Nathanial Rothschild - who founded Bumi plc with the Barkries - lost his bid to replace members of board as a way to claw back control of the firm.

Rothschild has been banging heads with the board since falling out with the Bakries following an investigation into financial wrongdoing.

RD

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