Geo Energy Resources (RE4) Q3 2024 earnings summary

Executive summary

• Q3 revenue fell 24% YoY to US$84.3m and net profit fell 39% to US$7.0m, reflecting lower coal sales volume and ASP, plus higher finance costs.

• 9M revenue declined 28% YoY to US$253.7m; net profit decreased 14% to US$33.8m.

• Mining cash profit per tonne and margin improved despite lower coal sales and a slightly lower ASP.

Financial highlights

• Q3 gross profit was US$14.1m, down 11% YoY; profit before tax was US$8.1m, down 53%. 9M gross profit was US$41.3m, down 35%; profit before tax was US$41.7m, down 32%.

• Q3 other income declined 53% YoY to US$2.0m, mainly from lower interest income and FX gains; G&A rose to US$3.2m after expanded operations following the GEE acquisition.

• Q3 income tax expense was US$1.0m, with a 12% effective tax rate versus 33% in Q3 2023, reflecting deferred taxes tied to MBJ and withholding-tax savings.

• Average ICI4 was US$51.64/t in Q3 2024, compared with US$52.07/t in Q3 2023.

Outlook and guidance

• ~0.4m tonnes of excess Q3 production was expected to be sold in Q4 after adverse weather disrupted coal transportation; increased dredging was expected to support higher 4Q sales.

• M42 Futures Index forecast coal at US$52.83/t in Q4 2024 and an average US$56.44/t in 2025.

• The Integrated Infrastructure is expected to complete by early 2026, supporting TRA capacity of 25m tonnes per annum and logistics savings of over US$10/t.

• MBJ purchase price allocation was targeted for completion in 4Q2024, with its results to be recorded in that quarter.