Straits Asia Resources (AJ1.SG) appointment of a new CEO is doing little for share price. While stock did gain 1.5% to $2.05, volume remains thin at just over 1.3 million shares vs daily average of 15.9 million last week.
Sentiment was bogged down lately in part by uncertainty over whether Richard Ong’s contract as CEO will be renewed when it expires in May. However, the coal miner instead names board member Martin Purvis as new chief with immediate effect.
OCBC Investment Research in a Feb 25 research report says: “Straits Asia Resources’ (SAR) FY09 net profit of US$133.5m (up 7.3%) was in line with our expectations but below consensus. The group delivered a 27.9% growth in revenue to US$748.4m, driven by stronger thermal coal prices and higher production volumes.
Straits Asia Resources (AJ1.SG) heads lower as FY09 results highlight worries over selling prices and volumes.
The coal miner’s shares are down 1.9% at $2.10 (vs FTSE ST All Share +0.1%) with support tipped at last week’s intraday low of $2.04.
OCBC Investment Research, which rates stock “sell” with $1.73 target price, says results were below consensus forecast with company’s guarded guidance a cause for concern.
Straits Asia Resources announced a 7% increase in full-year net profit to US$133.5 million ($188 million) for FY2009.
Jembayan mine led the boost in results, reaching 6.5 million tonnes in production, a 30% increase over FY2008. Steady support from the Sebuku mine production of 2 million tonnes in 2009 and prudent management of coal trading opportunities also contributed to the record net profit, says the miner.
OCBC Investment Research in a Dec 2 research report says: “Straits Asia Resources (SAR) rallied by as much as 25% since we upgraded our rating a month ago. We advocate caution at current levels as positives appear to be reflected in the price.
Mainboard-listed Straits Asia Resources says it posted a 19.8% rise in revenue to US$515 million ($720 million) for the nine months to Sept 30, 2009 from US$433 million for the year earlier corresponding period on the back of higher realised prices and higher volumes for the group’s coal exports following a major increase in output from the Jembayan mine.
Total profit for the same nine-month period rose 17% to US$95.5 million from US$81.6 million.
Mainboard-listed Straits Asia Resources says it reported another strong set of operational results for the first half of 2009.
Sales revenue rose 19% to US$315 million ($451 million), thanks to its decision to sell forward large quantities of its 2009 production before the global financial crisis hit international coal markets.
Production also fell in line with expectations, it added.
Singapore’s benchmark stock index, the Straits Times Index, fell 0.04% at 9:05 a.m.
The index of 30 companies traded on Singapore Exchange fell 0.99 to 2,603.07. Among the stocks in the index, 13 rose, 11 fell and 6 were unchanged.
Declines in the Straits Times Index were led by Capitaland, Singapore Telecommunications and Olam International. About 88.02 million shares changed hands in Singapore.
Straits Asia Resources, which rose 3 cents to $1.94, was the most active stock by value in Singapore.
The next most-active issues were Singapore Telecommunications, which fell 1 cents to $3.45, and Capitaland, which fell 7 cents to $3.93.
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