Geo Energy Resources Limited: 1H2025 Financial Results Analysis

Geo Energy Resources Limited has reported its unaudited consolidated financial results for the six months ended 30 June 2025. The company, a major player in coal mining, trading, and mining services across Indonesia and Southeast Asia, has showcased substantial top and bottom line growth, operational progress, and several significant corporate actions. Below, we analyze the key financial and strategic developments as disclosed in the interim report.

Key Financial Metrics and Comparative Table

*QoQ figures not available; company only reports half-yearly.

Historical Performance Trends

• Coal sales volume nearly doubled YoY to 6.3 million tonnes (from 3.2 million tonnes), enabled by improved mining sequence and operational optimization at SDJ, TBR, and TRA mines.
• Revenue rose 71% YoY, but average selling price per tonne decreased to \$46.26 (from \$52.47), reflecting lower benchmark coal prices, partially offset by higher volumes.
• Production cash cost per tonne improved to \$36.07 (from \$40.53), supporting robust cash profit margins despite the lower coal price environment.
• Net profit grew 76% YoY, but EPS declined due to the absence of one-off gains present in 1H2024 (notably, a \$15.4M gain on sale of receivables last year).

Exceptional Items and Notable Expenses

• The previous year included a \$15.4M net gain on the sale of rights to receivables, which did not recur in the current period, affecting the YoY EPS comparison.
• Depreciation, amortization and non-cash charges increased substantially (+\$8.3M YoY), in line with higher production and infrastructure investments.
• General and administrative expenses rose 47% YoY, reflecting expansion at TRA and ongoing infrastructure projects.

Chairman’s Statement and Management Tone

“Dear Shareholders,
The Group has delivered 6.3 million tonnes of coal from its SDJ, TBR and TRA mines, almost double from 1H2024’s 3.2 million. The Group’s revenue and net profit increased by 71% and 76% respectively… The Company remains committed to its dividend policy and will assess the full-year results performance at year end before declaring the final dividend… The disposal of SBJ and BEK allows the Group to further optimise its portfolio and focus its allocation on its growth drivers and enhance shareholder value… Following the [PT BES] acquisition, 100% of the share capital of PT Triaryani are owned by subsidiaries of the Company.”

On behalf of the Board,
Charles Antonny Melati
Executive Chairman and Chief Executive Officer

Analysis of Tone: The Chairman’s message is notably positive, highlighting record coal deliveries, strong YoY growth, successful portfolio optimization, and strategic acquisitions. There is confidence in exceeding the full-year sales target and a reaffirmed commitment to dividends, albeit with caution about the final payout pending year-end results.

Dividends

• 1st interim dividend for 2025: 0.25 SG cents/share (paid May 2025)
• 2nd interim dividend for 2025: 0.10 SG cents/share (declared, to be paid 29 August 2025)
• Compared to 1H2024, when the 2nd interim dividend was 0.20 SG cents/share, dividends per share are lower, reflecting a more conservative approach despite higher net profits.

Corporate Actions and Significant Business Events

• Divestments: In July 2025, the Group completed the sale of PT Sumber Bara Jaya (SBJ) and PT Bumi Enggang Khatulistiwa (BEK) for \$18M, aiming to streamline its portfolio and focus capital on growth drivers.
• Acquisitions: In July 2025, acquired 100% of PT Bara Enim Sejahtera (PT BES), consolidating ownership of PT Triaryani.
• Capital Raising: In April 2025, subsidiary Golden Eagle Energy Tbk raised \$13.1M via private placement to meet IDX free float requirements.
• Share Buybacks & Options: During 1H2025, 47,000 treasury shares were issued on option exercise; 32.57M options remain outstanding.
• No unusual fund flows or related-party transactions beyond normal business operations.

Cash Flow and Financial Position

• Operating cash flow robust at \$48.6M (inflow), reversing outflows in the prior year’s comparable period.
• Investing cash outflows (\$66.3M) driven by infrastructure, equipment, and deposits for the PT BES acquisition.
• Financing outflows (\$21.7M) mainly from dividends, loan repayments, and lease liability settlements.
• Cash and equivalents at period end: \$77.0M, down from \$118.1M at end-2024, reflecting heavy capex and one-off acquisition outlays.
• Net asset value per share increased to \$0.4032 (US\$), up 6% from December 2024.

Outlook and Industry Commentary

• Industry Demand: Global coal demand remains firm, underpinned by Southeast Asia’s growing electricity needs and cost advantages of coal over renewables in the region.
• Coal Price Trends: ICI4 benchmark expected to average ~\$48/tonne for the remainder of 2025, modestly higher in 2026 according to Wood Mackenzie. However, prices remain below last year’s levels.
• Strategic Diversification: Geo Energy is progressing on MBJ’s integrated infrastructure project, expected to provide stable toll-based income, reducing reliance on coal price volatility.
• Expansion and Risks: Additional capex for infrastructure upgrades (~\$40M) is planned, but management does not anticipate project delays.

Conclusion and Investment Recommendations

Overall Assessment: Geo Energy Resources Limited has delivered a strong operational and financial performance in 1H2025, driven by record coal sales volumes, improved cost efficiencies, and strategic asset optimization. Despite a challenging coal price environment, the group’s scale and unit cost improvements have supported robust profitability and cash generation. The company is actively managing its portfolio, diversifying revenue streams, and maintaining a prudent approach to dividends and capital allocation.

If you currently hold the stock:

• The outlook remains positive, with management confident in meeting or exceeding the full-year sales targets and further benefits expected from the MBJ infrastructure project and completed acquisitions.
• However, note the lower interim dividend and ongoing infrastructure capex, which may temper near-term cash returns. Consider holding for continued operational growth and potential for higher final dividends, pending year-end results.

If you do not currently hold the stock:

• Geo Energy now trades at a higher net asset value with solid operational momentum and sector tailwinds, but coal price volatility and dividend conservatism are risks to near-term upside.
• Entry could be considered by investors seeking exposure to the coal sector’s Southeast Asian demand story and a company with scalable operations and growing infrastructure income. However, patience may be required for dividend growth and capital gains if coal pricing remains subdued.

Disclaimer: This analysis is based solely on the company’s disclosed financial statements and does not constitute investment advice. Investors should consider their own financial circumstances and risk tolerance, and consult a professional advisor before making investment decisions.

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