Geo Energy Resources (RE4) H1 2023 earnings summary

Executive summary

• H1 2023 revenue was US$239.8m, down 35% YoY, and net profit was US$28.0m, down 74% as lower coal prices and sales volumes reduced earnings.

• A US$200m acquisition of a controlling stake in an Indonesian mining group with over 300m tonnes of 2P reserves was secured; a US$220m Bank Mandiri facility supports acquisition plans, working capital and capex.

Financial highlights

• Gross profit was US$48.0m, down 68% YoY, with gross margin at 20% versus 41% in H1 2022.

• EBITDA was US$55.0m versus US$162.6m in H1 2022; profit before tax was US$44.2m, down 71%.

• Production cash cost rose to US$50.07/tonne from US$39.63/tonne in H1 2022, driven by higher stripping ratios and Indonesian royalties.

• Cash and bank balances were US$149.5m at 30 June 2023, down US$84.6m from year-end 2022, mainly reflecting dividend and tax payments totaling US$91.6m.

Outlook and guidance

• The 2023 production quota and sales target for SDJ and TBR are 8m tonnes, subject to weather; H1 production was 3.9m tonnes and sales were 3.6m tonnes.

• Following infrastructure ramp-up, Triaryani targets annual production of 20–25MT over a stated 10–15-year mine life; estimated annual cash profit is ~US$250m at US$10/tonne cash profit.

• The acquired mining group is expected to provide over 20 years of mine life and infrastructure for a potential ramp-up toward 25m tonnes per annum.

• Potential investments in non-coal businesses are being explored to diversify the portfolio.