PT Delta Dunia Makmur has booked stable performance for first semester (1H) of 2024, reflecting the group’s resilience and operational capability in the face of extreme weather conditions and weakening currencies.
The group’s coal volume remained stable year on year (YoY) at 42 metric tons (MT) while overall Overburden (OB) removal decreased by 5 percent at 271 million bank cubic meters (bcm) due to the ongoing extreme rainfall affecting production levels over the past six months.
The extreme weather conditions have affected the broader mining industry in Indonesia and other sectors across Asia, yet the group’s operational capabilities
and strategic adaptations ensured continued progress towards its targets. The group’s recovery-after-rain improvement project has proven successful,
achieving a 12 percent YoY improvement.
Revenue for 1H 2024 remained stable YoY at US$855 million. However, Earning Before Interest, Taxes, Depreciation, and Amortization (EBITDA) decreased by 9 percent YoY to US$160 million, driven by lower volume. Initial increases in cash costs from ongoing efficiency initiatives are expected to normalize as these measures take full effect.
The Group reported a net loss of US$7 million in 1H 2024, a shift from the net profit of US$5 million in 1H 2023. This decline is primarily attributed to a US$12 million forex loss caused by adverse currency fluctuations of IDR and AUD against USD.
However, forex losses improved in Q2 2024, decreasing from US$11.5 million in Q1 2024 to US$0.7 million in Q2 2024. If the forex loss is normalized, along with the Secured Overnight Financing Rate (SOFR) impact and one-off consent costs, the group would end up with a net loss of US$1 million, close to breaking even, demonstrating the resilience of the business.
Operating cash flow for 1H 2024 increased by 15percent YoY, reaching approximately US$164 million, driven by significant improvement in working capital management.
However, free cash flow decreased due to significant investments in financial assets such as Sun Energy and the recently completed acquisition of Atlantic Carbon Group, Inc (ACG). When normalized with the ACG acquisition, free cash flow would be USD 68 million as compared to a negative USD 47 million.
Operational expansion drove the majority of the Group’s Capex growth in 1H 2024, which increased by 78percent YoY to US$79 million. This expenditure supported the ramp-up of existing sites in both Indonesia and Australia and capitalization of Repair and Maintenance (RM) costs, and in line with the group’s full-year Capex guidance of US$150 million to US$190 million.
Dian Andyasuri, Director at Delta Dunia Group, said despite extreme weather conditions and weakening currencies, the company delivered stable performance in the first half of 2024.
“This resilience highlights our strategic foresight in navigating uncontrollable risks and our commitment to transforming our business and diversifying revenue streams, positioning us for sustainable growth towards a low-carbon economy,” she said in a statement on August 1, 2024.
The group has been managing its liabilities by aligning debt maturities with the lifespan of its equipment, successfully reprofiling most of its debt maturing in 2026. As of 1H 2024, 15 percent of this debt is due in 2027, with 33 percent scheduled for repayment in 2028 and beyond. The group’s cash position stands at US$260 million, with net debt to EBITDA ratio of 1.90x as of June 30, 2024, positioning the group fit for future growth.
The successful completion of the acquisition of ACG, the second largest producer of ultra-high-grade (UHG) anthracite in the United States transforms the group into a mine owner, further diversifying the group while maintaining its prominent market position as a Tier 1 mining contractor in Indonesia and Australia. The ACG acquisition is projected to raise the proportion of group revenue from non-thermal sources to 28 percent by the end of Fiscal Year 2024. This move is aligned with the group’s plan to reduce revenue from thermal coal to 50 percent by 2028.
The group’s ESG initiatives have shown progress as it has completed carbon baseline consolidation across its Indonesian and Australian operations and implemented site-specific carbon reduction measures.
“Our recent US expansion demonstrates our commitment to creating long-term
value for our shareholders by transforming the group into a globally diversified mining business. The ACG acquisition has strengthened our position, and we are confident that it will positively contribute to our diversification efforts,” Iwan Fuad Salim, Director at Delta Dunia Group, said.
By July 26, 2024, the group purchased 483.1 million shares through the buyback program. It also acquired US$34.8 million of its Senior Notes through open market purchases and US$153 million through the tender offer.
