Delta Dunia Group Demonstrates Operational Excellence and Enhanced Financial Robustness in Q1 2024

PT Delta Dunia Makmur Tbk (“Delta Dunia Group” or “the Group”, IDX: DOID), the parent company of PT Bukit Makmur Mandiri Utama (BUMA), BUMA Australia Pty Ltd (BUMA Australia), PT Bukit Makmur Internasional (BUMA International), PT Bukit Teknologi Digital (BTech), and PT BISA Ruang Nuswantara (BIRU), reported a robust operational and financial performance for Q1 2024.

Key Consolidated Financial Highlights (USD million, unless stated):

The Group's performance benefited from a 1% YoY increase in overburden (OB) removal and coal volume, with significant double-digit growth in Australia. Despite challenges such as unexpected heavy rainfall in Indonesia impacting productivity, the Group remains on track to meet its 2024 full-year volume targets. The stability in OB removal amid adverse weather conditions reflects the Group’s ongoing sites expansion, adept management and strategic preparedness.

In Q1 2024, the Group recorded revenue of USD 426 million, marking a 4% YoY increase. EBITDA for the Group grew by 8% YoY to USD 80 million, driven by enhanced revenue from strategic expansion efforts, and better cost control, which also improved the EBITDA margin from 20.8% in Q1 2023 to 21.6% in Q1 2024. The Group has also maintained prudent financial management, achieving a notable decrease of 9% in operating expenses from USD 24 million in Q1 2023 to USD 22 million in Q1 2024. Similarly, operating profit amounted to USD 16 million, indicating a 12% increase compared to the same period in the previous year.

Capital expenditures (Capex) increased by 80% YoY to USD 40 million, driven by the ramp-up of an existing client and repair and maintenance (RM) capex, aligning with the Group's FY guidance range of USD 150 million to USD 190 million. As the Group continues to expand its operations, maintaining strict control over capex remains a key focus, reflecting the Group's commitment to prudent financial management practices.

Excluding the forex translation loss, the Group's net income remained stable and comparable to the previous year, reflecting a steady financial performance in Q1 2024. While the Group reported a net loss of USD 19 million, USD 18 million higher loss compared to the same period in 2023, this was primarily driven by a USD 17 million forex loss due to the depreciation of the Indonesian Rupiah (IDR) and the Australian Dollar (AUD).

Contract Win and Diversification Fuel Growth

The Group has strategically prioritized high-quality customers, highlighted by the successful extension of contract with Blackwater Operations Pty Ltd, a subsidiary of Whitehaven Coal Mining Limited, for pre-strip mining services at the Blackwater Mine in Australia for an additional 2 years. Active engagement with several other clients to finalize contract negotiations underscores our commitment to long-term relationships and customer base expansion. This approach not only ensures a steady revenue stream but also strengthens the Group’s industry reputation.

In addition, the Group continues to diversify geographically and into future-facing commodities with the acquisition of Atlantic Carbon Group, Inc. (ACG), the second-largest American anthracite producer operating four ultra-high-grade anthracite (UHG anthracite) mines in Pennsylvania, USA. This acquisition, expected to be completed in June 2024, marks a significant milestone for the Group, expanding from a mining service provider into a global mine owning business and accelerates the Group's commitment to reduce its dependence on thermal coal in its revenue. Importantly, the acquisition positions the Group as a pivotal player in the global UHG anthracite market, crucial to produce low-carbon steel (LC steel).

Dian Andyasuri, Director at Delta Dunia Group, commented, “In navigating through both challenges and opportunities, the Group has showcased our resilience and strategic foresight in maintaining growth momentum. By prioritising high-quality partnerships and expanding into new territories and commodities, we continue to strengthen our position in the industry while advancing towards our long-term objectives and mitigating potential risks beyond our control.”

Enhanced Financial Robustness Through Strategic Refinancing

In Q1 2024, the Group continued to strengthen its balance sheet, achieving a healthy Net Debt to EBITDA ratio of 1.65x as of March 2024, improving from 2.15x in Q1 2023. Operating cash flow increased significantly to USD 61 million, up from USD 35 million in Q1 2023. While free cash flow was USD 11 million, the Group's cash position grew to USD 322 million. The lower free cash flow reflects additional investments in Solar United Network Pte ltd (SUN Energy), a solar panel engineering, procurement and construction (EPC) and developer with international project portfolio in Asia Pacific region, emphasizing the Group’s commitment to transition towards a lower carbon economy.

As of March 2024, the Group’s total debt decreased to USD 1.01 billion, down from USD 1.22 billion, due to a USD 153 million early bond repayment and further reductions from loan and lease amortization. This reduction, coupled with effective diversification of capital sources, facilitated the successful refinancing of its 2026 debt repayment obligations, improving its debt maturity profile.