Mandiri Sekuritas Bumi : FY09 net income below ours and consensus on amortization of US$275mn deferred stripping cost (BUMI, Rp2,300, Buy, TP:Rp4,136)

􀂄 Bumi Resources, said net profit in 2009 fell to $190.5mn because of a $275mn charge on deferred mining expenses. 2009 profit was down by 49% compared with the company’s adjusted $371.7mn net profit in 2008. Included back US$275mn deferred stripping cost, and apply the same tax rate (45%), Bumi 2009 net income was US$434mn, higher than consensus forecast of US$406mn.

􀂄 Bumi’s production volumes rose 19.5% to 63.1Mt, with volume sales of 58.4Mt (vs 2008: 51.5Mt), while its costs decreased to $28.3/ton from $33.11 in 2008. However, a lower average sales price in 2009, of $61/ton, down from $73/ton in 2008, contributed to a 4.7% drop in revenue to $3.22bn. In 2010 Bumi is aiming to sell 64Mt of coal at an average price $67 /ton. In 1Q10 Bumi has produced 16 Mt, up 41.6% from the same period in 2008. As to what Bumi can make in 2010 net income, that really depends on their plan to below operating line activities such as plan to reduce debt of US$1.1bn through debt to equity swap and the placement of its subsidiary (Bumi Resources Mineral, a non-coal holding company).