Floods take toll as Bumi slips to underlying loss

 
Elizabeth Fournier
BUMI, the Indonesia-focused coal miner co-founded by Nat Rothschild, has slipped to a loss in the first-half of the year, as flooding and rising costs hit production.

Though Bumi’s operating profit almost doubled to $128m (£82m), the firm said yesterday that its bottom line was hit by the unpredictable weather, adding up to an underlying loss of $117m for the six months, compared to a $54m profit last year.

Rothschild was chairman of the firm until March this year, but was replaced by Indonesian investor Samin Tan after an ongoing spat with major shareholder the Bakrie family over the firm’s corporate governance structure.

Thermal coal prices have been battered this year, hitting a two-year low in June as a boom in global coal supply coincided with a flood of US exports.

And heavy rainfall throughout the first half that caused flooding in the firm’s key Kalimantan region hit output, leading the firm to cut its production estimates for Berau to 20-22m tonnes for 2012, from 23m.

Chief executive Nalin Rathod was more upbeat about the next six months though, predicting that prices would rise.

“Demand cannot be what it is today and prices cannot be what they are today,” Rathod said.