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COAL producer Straits Asia Resources yesterday reported a 43 per cent drop in second quarter net profit to US$21.4 million (S$31 million), hurt by several non-cash items.
The mainboard-listed group attributed the profit fall to expense incurred on the costs of warrants amounting to US$14.3 million, provision for plant and machinery of $2.9 million and higher tax provision.
Revenue for the three months ended June 30 rose 9 per cent to US$175.5 million. Net profit for the half year eased 2 per cent to US$56.9 million on the back of a 19 per cent jump in revenue to US$315.2 million.
The record revenue underscored the success of Straits Asia's decision to sell forward large quantities of its 2009 coal production before the global financial crisis affected international coal markets, the company said.
Half-year earnings per share slipped to 5.2 US cents from 5.33 US cents previously while net asset value per share firmed to 35.5 US cents compared to 34.38 US cents as of Dec 31.
In line with the policy of paying 60 per cent of net profit as dividends, the directors are recommending a second interim cash payment of 1.14 US cents a share.
On the flip side, Straits Asia fell into a net current liabilities position in its books after the outstanding balance under a bank facility with Standard Chartered had been reclassified as a current liability. The facility matures on May 24 next year.
Chief executive Richard Ong said the main items on the agenda for the second half year are the refinancing of a bank loan, increasing production at its Jembayan mine and working to ensure Sebuku's coal production will increase as soon as forestry restrictions are lifted and mining nods from the Indonesian authorities have been received.
Straits Asia shares yesterday
fell by nine cents to $2.11 on turnover of 12.5 million units changing
hands.
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