Fw: BUMI_RESOURCES_Stock_ahead_of_fundamenta.pdf
My friend send me several statement from Mr Dileep abt BUMI,
a) Bumi
share price since Jul ’08 has underperformed compared with the index but in
line with industry trends of almost all major coal companies since the sub
prime crisis. Our true international comparator is Xstrata in our opinion – and
we are close.
Our share price was
around Rp 900 in Jan 07 and in line with Jan 09 and is currently tracking above
this figure.
b) Bumi’s
reserves (organic) since Jun ’08 are 2.1 billion tons .
The new acquisitions
add another ca 800 million tons since Dec ’08 making it 2.9 billion tons twice
the size in Indonesia of anyone else.
c) As
policy Bumi commits 80% of sales on contract in a year, balance 20% is
uncommitted. This is to avoid over commitments on sales and obviate need for
force majeures – these enable Bumi obtain premium on price over standard
vanilla competitors.
e) Bumi’s
sales are mainly to blue ribbon power utilities, not traders , the world over,
and, hence, there is no real risk of volume slippage.
f) Our cost
of debt is libor+4.5/5.5%
g) If benchmark coal prices fall below $60/ton many coal mines would probably
face closure of mines. Bumi with its lowest
quadrant cost profile will still be profitable – Bumi made profit in 2006 when
its ASP was $40/ton and again in 2007 when ASP was $44/ton.
h) The acquisitions are done deals and strengthen Bumi’s medium
term dominance in the global thermal coal sea borne traded market.
i) The 3 acquisition strengthen Bumi’s dominance in the seaborne
traded thermal coal sector which should be easy to justify. All procedures have
been followed and we are not aware of anything otherwise.For comparison you
might wish to compare the Xstrata/Prodeco and PTT/SAR deals. In fact, investors
have enquired how come Bumi was able to acquire the coal assets so cheap.
Regards,
Dileep
