Geo Energy's Q124 net profit falls 46% YoY

Income for the quarter declined amid lower coal prices and production.

Geo Energy Resources said its net profit for the first quarter of 2024 (Q124) was $11.72m ($8.66m), which was down 46% on a year-on-year (YoY) basis.

Whilst earnings declined, the company noted it was able to continue recording profitability despite lower ICI4 prices and an increase in finance costs. It attributed the gain to its “resilient cost model as well as optimisation of mining plan to reduce strip ratio and cash costs.”

“The average ICI4 prices remained stable at USS$57.23 per tonne in 1Q2024, comparable to US$58.85 per tonne in 4Q2023. Coal remains the cheapest source of energy and with rising concerns of energy security globally, the growing demand for coal is expected to support coal prices in 2024 and beyond,” said Charles Antonny Melati, executive chairman and CEO of Geo Energy.

The decrease in prices was coupled with lower production in Q1 due to seasonality and weather conditions, leading to a 25% decline in revenue, which was logged at $133.95m ($98.96m) in the first three months.

In Q1 2024, the company delivered coal sales of 1.8 million tonnes in, mainly comprising 1.1 million tonnes, 600,000 tonnes and 100,000 tonnes of coal from the TBR, SDJ and TRA coal mines, respectively. 

“Notably, the group remains on track for coal sales target of 10 – 11 million tonnes in 2024, with higher volumes expected in 2H2024,” it added.

Geo Energy also remained to have a strong cash profit per tonne at an average of $17.84 (US$13.18) per tonne, which was also associated with its resilient cost model and optimised mining plan. 

Other income was up 24% to $2.82m (US$2.1m), mainly comprised of foreign exchange gains and interest income, it added.

The company declared an interim dividend of 0.2 cents per share.

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“To build and achieve long term sustainable profitability, we have laid the foundation for transformative growth with the acquisition of GEE and we are making steady progress in the development of the integrated infrastructure to support our growth plans,” Melati said.

“Targeting 20-25 million tonnes of annual production capacity, we aim to become a billion-dollar energy group in the next 5 – 6 years,” he added.

(US$1=S$1.35)