TeaThe share price of Jakarta-listed coal company Prima Andalan Mandiri more than doubled in the past year to 7,125 rupiah on Wednesday, making 76-year-old Eddy Sugianto Indonesia’s newest billionaire with a net worth of $1.2 billion.
Sugianto’s family directly and indirectly owns about 70% of the company through the Edika Agung Mandiri and Prima Andalan Utama holding companies. Sugianto is the Presiding Commissioner of Prima Andalan Mandiri since 2005. He graduated from Tseng Qiang Chinese School in 1963.
Prima Andalan Mandiri was founded in 2005 by Edika Agung Mandiri and Prima Andalan Utama. In 2011 it acquired coal miner Mandiri Intiparkasa, coal contractor Mandal Karya Prima and coal shipping company Maritim Prima Mandiri. It obtained a coal contract in 1994 for an area of 50,000 hectares in North Kalimantan, one of the coal centers of Indonesia. Mandiri Intiparkasa started production in 2004 and has since sold coal under the Mandiri Coal brand.
Prima Andalan Mandari is one of the Indonesian coal companies, the largest exporter of thermal coal globally, benefiting from rising coal prices. Australia’s Newcastle thermal coal benchmark futures for December 2022 jumped 181% to $330 a tonne on Tuesday, from $117.55 a tonne in the year-ago period. The price reached an all-time high of $442.8 per tonne on 21 September.
As a result of the rising price, Prima Andalan Mandiri posted revenue of $746.5 million in the first nine months of 2022, nearly double the same period a year earlier, while its net profit was $256.2 million, up $129.1 million.
According to a Fitch Ratings report, lower supplies due to rainy weather in Australia, strong demand from India and energy crisis in Europe have boosted coal prices globally. Jonathan Guayadi, an analyst at Samuel Securitas Indonesia, said in an October report that “coal prices may remain elevated for some time” until early next year due to extreme weather conditions that will affect coal production, beginning in the winter season. Ukraine in increased demand and Russia’s war.
Amid rising prices, the Indonesian government has set national coal production at 663 million tonnes this year, up 8.7% from 610 million tonnes in 2021, with a 25% allocation for the domestic market. In response to this target, Indonesian coal companies including Prima Andalan Mandiri also increased their productions. In 2021, Prima Andalan Mandiri is projected to produce 7.5 million tonnes of coal, or a 25% increase from 2020. By the end of this year, the company expects to produce 9.5 million tonnes of coal.
Prima Andalan Mandiri offered 355.5 million shares, or 10% of the company, on the Indonesia Stock Exchange in September last year for 504.9 billion rupees. The proceeds were used for additional paid-up capital in its subsidiary Mandal Karya Prima, which later used the capital to purchase heavy equipment and working capital.
Credit: www.forbes.com /