Rothschild's Bumi reports $54m earnings

City A.M. Reporter
Mining group Bumi, founded last year by billionaire financier Nat Rothschild as acquisition vehicle Vallar, posted underlying first-half earnings of $54m (£32m) and said production for the year was on track.

Bumi said it expected to produce 86m tonnes of coal this year, up from 77m, when posting its first interim results since the thermal coal producer listed under its new name in June - giving Indonesia's politically connected Bakrie family a foothold in London.

"Despite high levels of rainfall in the first quarter, a significant amount of the shortfall was made up in the second quarter," chief executive Ari Hudaya said. "Higher volumes in the second half, coupled with record coal prices, should ensure a strong overall performance for 2011."

Bumi said thermal coal prices should remain strong over the short and medium term on higher demand from Asia and Europe.

"India in particular is expected to increase its level of thermal coal imports over the next few years with a major planned increase in electricity capacity addition," it said.

About 90 percent of coal sales by value were exported, while a 33 percent increase in coal prices outweighed higher production costs.

Rothschild joined forces with the Bakrie Group (BNBR.JK) last year as Vallar bet heavily on Indonesia, the world's largest thermal coal exporter. It took a 25 percent stake in coal miner Bumi Resources, Asia's biggest thermal coal exporter, and a 75 percent stake in Berau Coal Energy (BRAU.JK).

Bumi now owns over 30 per cent of Bumi Resources, as well as 75 percent stake in Bumi Resources Minerals BRMS.J, as a result of a deal in June to simplify its structure and pave the way for a FTSE 100 entrance. Its stake in Berau now stands at 85 per cent.

It expects to enter the FTSE all-share index on 19 September.

Bumi plans to raise the stake in Bumi Resources, in which commodities trader Glencore is the third-largest investor, to 50 percent as soon as possible, Hudaya told reporters on Wednesday.

Bumi Resources plans to pre-pay the first $600 million tranche of a $1.9bn loan to the China Investment Corporation (CIC) in October