Sakari Resources (formerly "Straits Asia Resources")

[Musicwhiz]

Business Times - 22 Feb 2011

Straits Asia's Q4 net profit down 20%

Lower selling prices cut Q4 gross profit margin to 29% from 35% a year ago

By EMILYN YAP

STRAITS Asia Resources yesterday reported a net profit of US$30.5 million for the fourth quarter ended Dec 31, 2010, falling 20 per cent year on year.

This followed an 11 per cent drop in sales revenue to US$207.3 million. Earnings per share was 2.71 US cents, down from 3.48 US cents.

Gross profit margin for the coal miner slipped to 29 per cent in Q4 from 35 per cent a year ago.

While the group had mined more coal, average selling prices were some 8 per cent lower, leading to reduced margins.

Production at the Sebuku mine had dropped while that at the Jembayan mine had increased.

At Sebuku, heavy rains from June stopped only in November, allowing management to implement ramp-up plans that were supposed to have taken effect in the middle of the year.

For the full year, Straits Asia's revenue was US$736.5 million, just 2 per cent down.

However, cost of sales rose 24 per cent to US$555.6 million.

As a result, net profit tumbled 34 per cent to US$88.2 million.

Earnings per share was 7.81 US cents, falling 35 per cent.

The group is proposing a final dividend of 2.85 US cents per share for the year.

This year, Straits Asia expects higher selling prices but also higher costs.

Import demand from India and China and supply concerns could cause prices to improve over 2010 levels, it said.

On the other hand, fuel prices have gone up by about 50 per cent from a year ago.

As fuel accounts for over 30 per cent of cash costs in the mining logistics chain, there will be upward pressure on costs, it said.

Straits Asia lost four cents on the stock market yesterday to close at $2.42.

[iff]

SINGAPORE, April 20 (Reuters) - Shares of Singapore-listed
coal miner Straits Asia Resources rose as much as 3.9
percent on Wednesday after reporting a 269 percent year-on-year
surge in its first quarter net profit on higher volumes and stronger coal prices.
At 0102 GMT, Straits Asia shares were up 3.1 percent at
S$2.64 on a volume of 2.1 million shares. The company posted a
net profit of $41.4 million in the first quarter, up from $11.2
million a year earlier.
DMG &Partners Research said in a report that the firm''s
strong net profit, which came in above its expectations, was
mainly due to higher-than-forecasted gross margins stemming from
greater production volumes from the Sebuku mine.

(Reporting byEveline Danubrata)

(Not Vested)

[Thriftville]

Changed named under Sakari Resources. Recently share price plunge by half, probably due to big selling by funds.

Any buddies can shed some light in this company?

[Nick]

The Management uploaded its FAQ presentation yesterday to clarify the rumour of export tax hitting coal and plans of domestic ownership of mines. I believe this may have caused the recent sell down (together with falling coal prices). If coal prices can recover in 2H 2012, this is an attractive price to enter.

http://www.sakariresources.com/wp-conten...mation.pdf [Presentation]

(Not Vested)

[sgd]

coal prices will recover only if oil prices go up.

And that will only happen if something happen to oil supply or they whack iran

with lower oil prices they can use as leverage to pressure iran on top of current sanctions and since energy prices are low a military option now looks more attractive with a lesser painful fallout starting from a lower base.

I see iran government looks hell bent on developing nuclear weapons why else would they have make such preparations ahead to pre-empt these crippling sanctions.

But the problem is since vladamir putin's return the russians are now also involved. Russians and China leaders have met are going to "pakat" with each other will veto at UN any military strike on Iran or involvement in Syria, I see the "syrian road" to iran seems to be closing fast.

end of the world maybe will postphone

As for coal, many countries like India and China are still heavily dependant on it.

[guru]

will the debt load be a problem? Looks to be in net debt position.

coal prices will recover only if oil prices go up.

And that will only happen if something happen to oil supply or they whack iran

with lower oil prices they can use as leverage to pressure iran on top of current sanctions and since energy prices are low a military option now looks more attractive with a lesser painful fallout starting from a lower base.

I see iran government looks hell bent on developing nuclear weapons why else would they have make such preparations ahead to pre-empt these crippling sanctions.

But the problem is since vladamir putin's return the russians are now also involved. Russians and China leaders have met are going to "pakat" with each other will veto at UN any military strike on Iran or involvement in Syria, I see the "syrian road" to iran seems to be closing fast.

end of the world maybe will postphone

As for coal, many countries like India and China are still heavily dependant on it.

[ValueBeliever]

SGX should query the Co. on the issue regulatory changes and its impact? The equity value wipe out is not small n I believe there are plenty of funds parked their investment for dividend and growth.

They clear this playing field for all would be safer! I kind of believe this is the worst opportunity in the market now and any clarity on this issue would bring the share price up.

Is there are structural change in coal export or is it just oil price pegging?

[sgd]

I usually only pick stocks with assets over liab minimum 2-3 times for margin of safety.

I'm vested in coal related counter but is not sakari.

However because of the sell down I've been looking very hard at sakari lately but I'm sure every other trader are also looking at it.

[EFG]

Actually the asset is slightly over 2 times liability but the Indonesian garment's flip flop policies over coal has put some questions marks over the entire industry. In my opinion, the eventual policies will not be harsh. Reason being Indo coal companies' lobby is very strong.... many of the rich in Indonesia has business in coal..

The very important game changer which could turn the whole industry upside down is the full flow export of US coal to Asia. This will potentially flood the market but this is still very early. US has no available ports capable of shipping coal at the moment and all current exports has to be done via Canada but they are looking to build the facilities in the northwest (direct to China and India and not forgetting BDI is so low now!!) however a lot of the green movement groups are dead against it. Presently the US coal companies are so badly hit by the low domestic gas prices (result of the shale gas boom) and very soon they will be history if they do not find a way to meet demand in Asia. For this reason, I will not put my bets on green groups over the industry.

All stocks are good stocks at the right price. With prices falling like that, this is very tempting but only as a short term play. Sakari as a long term investment will not be wise with the potential headwind so strong.

[Nick]

Indonesia says no plan to tax coal exports

http://in.reuters.com/article/2012/06/07...IN20120607 [Article]

(Not Vested)