Geo Energy Resources Limited | APEA - Regional Edition - Asia Pacific Enterprise Awards

Geo Energy Resources Limited



Geo Energy Resources Limited

Mining & Energy Industry

Company Introduction

“A low-cost Indonesian coal producer employing sustainable mining techniques”

Geo Energy is a Mining & Energy group listed on the Mainboard of the SGX and is part of the Singapore FTSE-ST index. From a relatively small-scale mining services provider, the Group has transformed itself into a low-cost coal producer with high-quality mining assets today. Geo Energy also collaborates with the biggest partners in the industry, such as PT Bukit Makmur Mandiri Utama (BUMA), one of the largest mining contractors in Indonesia, and international commodity traders such as Trafigura and Macquarie Bank.

Geo Energy produces low-ash, low-sulphur coal that is not only ecofriendly, but also has a high demand for blending purposes. The coal is needed as a cheap source of energy in many developing countries in Asia, and also helps mitigate environmental impact due to its cleaner coal specifications. The Group sells its coal to Indonesia and China, South Korea, Thailand, India and the Philippines. This is in line with Geo Energy’s vision in setting the pace to run its business with corporate social responsibility concepts firmly embedded within daily operations to protect the people, the environment and the communities, and the Group’s commitment to sustainable growth and enhancing shareholders value.

“Strive to achieve the best possible outcome.”

Corporate Culture

“Focus our efforts on the things that matter most”

Geo Energy believes in setting the right culture from the first step, by prioritising the safety, health and well-being of its workforce and communities. This is the principal reason that the Group has maintained zero cases of corruption and bribery, as well as achieved zero fatalities and work-related injuries. To give back to the society and community, Geo Energy has provided jobs and built schools to give better opportunities to the locals. In addition, the Group is committed to post-mining reclamation as the cornerstone of good environmental management in its industry. Geo Energy provides bursary scholarships for university students through its partnership with Singapore Institute of Technology and has regularly participated in and sponsored the annual Run for Hope organised by the Singapore Cancer Society. In view of the COVID-19 outbreak, the Group also provided medical aids and supplies in Indonesia and Singapore. Geo Energy believes in creating a conducive environment for employees to work together, providing them with ample opportunities to grow in their careers, organising activities for their holistic well-being and rewarding them fairly based on their work performance.

“Personal Growth in tandem with Company Growth”

Success is when preparation meets opportunity.

Building a sustainable business for the future.

Achievements and Impact

“The secret to success is always to work towards a higher goal”

In 2015, the Group transformed its business model and completed the acquisition of the SDJ coal mine, commencing full operations the following year and achieving a revenue of US$182.1 million in 2016. In 2017, the Group acquired its second mine, TBR, near doubling its coal reserves and targeted annual production rate. The Group achieved a CAGR of 154% from 2015-2018 before coal prices became depressed in 2019 and 2020. Despite the difficult coal price environment, the Group managed a strong performance in 1H2020 by reducing its cost base in 2Q2020 by 29% from the average cost in 2019 and achieving record sales and production volumes of 5 million tonnes. Based on the annualised sales of 10 million tonnes, this is an implied 81% growth from 2016 when it commenced its first coal sales from the SDJ coal mine.

The Group continues to be on an upward trajectory for growth, targeting coal sales of 10-12 million tonnes in the coming years. In 2017, Geo Energy embarked on roadshows in Hong Kong, Singapore, London, New York and Boston for the issuance of US$300 million Senior Notes. The issuance, which was oversubscribed by more than 3 times or US$1.2 billion, increased Geo Energy’s international profile as numerous multi-billion dollar funds invested in it. Following the COVID-19 crisis, the Group optimised its capital structure and reduced its gearing by 78%, through a series of repurchases totalling US$241 million of its Senior Notes in 10 months from December 2019 to September 2020. This reduced its annual interest by 80% from US$24 million to US$4.7 million. The Group signed on Life of Mine coal offtake agreements and prepayment facility agreements with world-class international traders. The offtake with these international traders brought strong strategic partners for the Group and broadened its reach in the international market. Macquarie Bank also came in as an equity partner for Geo Energy.

The Group has received recognition for its performance and corporate excellence for corporate transparencies, ESG practices, investor relationships, Singapore fastest growing companies. These awards are a testament to its corporate excellence.

Future Direction

Geo Energy constantly seeks out acquisitions of mining concessions to increase production quantity and at the same time, diversify the sources of its coal. The Group also looks for other means to expand its revenue streams by way of potential joint ventures and trading of third party coal. The Group will continue to work to strengthen its core earnings through opportunities to emerge as one of the top Indonesian integrated Mining Groups and bolster the innovative strength of the people and build a resilient company.