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GEO ENERGY, XMH HOLDINGS: Latest happenings

 

geo_wall
Singapore analysts and investors checking out this fascinating wall of coal at Geo Energy's existing mine in Kalimantan.
NextInsight file photo

GEO ENERGY RESOURCES, whose stock price has been boosted by Jim Rogers' appointment to the board recently, had another potential price-booster to announce.

Yesterday, Geo Energy said its subsidiary, PT Mitra Nasional Pratama, had on 11 December 2012 entered into a mining services contract and a coal sale and purchase contract with PT Arini.

Arini holds a 3,890 hectare mine concession in Handil Terusan Village, Anggana Subdistrict, Kutai Kartanegara Regency, East Kalimantan Province.

Mining Services Contract:  PT Mitra shall be exclusively appointed to provide mining services, comprising mainly overburden removal and coal haulage, in a specified area within the concession Area, namely the Work Block.

PT Mitra shall receive a service fee of US$2.50 (excluding value added tax) per bank cubic metre for overburden removal, and a service fee of US$0.20 per tonne per kilometre of coal haulage.

Coal Purchase Contract: Arini has agreed to sell and deliver the coal produced from the Work Block, exclusively to PT Mitra.

Arini has guaranteed that the coal existing in and to be produced from the Work Block shall be no less than 4 million metric tonnes. The volume of coal to be produced and delivered to PT Mitra shall be at least 1 million metric tonnes per year or such other volume as may be required by PT Mitra.

The price of coal under the contract shall be determined before delivery to PT Mitra, taking into account the Indonesia Coal Index.

PT Mitra shall pay a downpayment of US$5 million to Arini by instalments and the downpayment shall be utilised to partially settle PT Mitra’s payment obligation for each delivery and shipment of coal until it has been fully utilised.

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elvin_ceo
Elvin Tan, executive chairman and CEO.
NextInsight file photo

XMH Holdings is one cash-rich company which would put to shame highly indebted companies such as Olam International.

XMH reported a net cash balance of S$47 million as at 31 October 2012, compared to a market capitalisation of S$74 milion (based on a stock price of 19.1 cents).

Elvin Tan Tin Yeow, Chairman and CEO, said: "Our robust cash balances give us the competitive edge to explore growth prospects through enhancement of facilities and also to explore feasible and strategic M&A opportunities."

Adding to its allure, XMH has also reported record revenue (S$26.7 million, up 181% year on year) for the quarter ended 31 October.

Net profit doubled from S$1.5 million to S$3.6 million.

XMH, which is a diesel engine, propulsion and power generating solution provider in the marine and industrial sectors, attributed the solid quarter to its clearing of backlog orders.

Previously, XMH was "adversely affected as customers delayed taking delivery of goods due to economic uncertainty in global markets and delays in supply," it said.

OSK-DMG analyst Lee Yue Jer said: "This quarter's performance was very operationally-representative - there were no one-offs like forfeited customer deposits nor large exchange effects. We maintain our Buy call with a TP of $0.260."

For the press release, click here. 

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