Mansek Bumi Resources :1H10 within our estimates (BUMI,Rp1,710,Buy,TP:Rp3,665)

Discussing BUMI is not about discussing its operational performance.Their operational performances are inline with our expectation with a positive bias toward 2H10.However debt is still worrying.BUMI recorded a US$89.9mn (vs 1H09 : US$17.3mn)contribution in equity net income of associated companies,less than additional burden taken from ballooning debt and rising interest payment from US$4,189.8mn debt.BUMI paid US$257.4mn in financial charges (vs 1H09 :US$47.9mn).Therefore main concern is the state of its financial burden.In 1H10,BUMI increase its asset sales to US$171.7mn (1Q10:US$93.7mn),balancing the interest payment.Bumi also suffered US$60mn in derivative book losses. The derivative losses according to the company is in relation with its options contract for its convertible bonds issuance.