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RMKO targets completion of coal hauling road in 2024


Tue 30 Jan 2024, 12:00 PM



PT Royaltama Mulia Kontraktorindo Tbk (RMKO), a listed company engaged in mining support services and heavy equipment rental, will focus on completing the hauling road in 2024. With the completion of this 39-kilometer hauling road, several coal mines in Muara Enim, South Sumatra, can be operated soon.

RMKO President and Director Vincent Saputra hopes that the completion of this hauling road will increase the number of coal loads that can be transported and increase RMKO's heavy equipment rental. That way, RMKO's revenue also has the opportunity to increase.

"The length of the hauling road also has the potential to increase along with the increasing access to other private mines," Vincent said when contacted by on Friday (26/1).

Meanwhile, the addition of heavy equipment was largely executed in 2023. When the hauling road project is completed, the company will increase the utilization of this heavy equipment. However, RMKO does not rule out the possibility of additional heavy equipment along with the integration of hauling roads with surrounding mines.

RMKO, which is under the control of PT RMK Investama and a group with PT RMK Energy Tbk (RMKE), has a revenue derived from a small number of customers. In the first nine months of 2023, RMKO recorded revenue of IDR 199.08 billion, an increase of 53.60% from the same period in 2022 of IDR 129.60 billion.

This revenue mostly came from the mining segment, with a nominal value of IDR119.44 billion (60%). Then, heavy equipment rental services cost IDR 51.39 billion (26%), and construction services cost IDR 28.24 billion (14%).

In terms of clients, the most revenue came from RMKE owned mine, PT Truba Bara Banyu Enim (TBBE), amounting to IDR120.86 billion or 61% of total revenue. Then, from PT Royaltama Mulia Kencana, IDR62.7 billion (RMUK), and RMKE, IDR6.21 billion.

TBBE is one of the company's main customers that uses coal mining and transportation services. Meanwhile, RMUK is a customer who uses services for emplacement implementation, transportation road construction, and heavy equipment rental.

Indeed, RMKE owned mine, PT Truba Bara Banyu Enim (TBBE), has been operating since 2021. RMKO recorded a significant increase in revenue. RMKO's top line in 2022 reached IDR 184.87 billion, an increase of 6.5 times since the mine operated.

RMKO's revenue has increased significantly since 2021, with a compounded annual growth rate (CAGR) of 7.9 times. Along with the increase in operating revenue, RMKO also managed to increase operating net profit by 7.4 times to IDR 19.08 billion by the end of 2022.

Seeing this realization, Vincent believes that external clients will increase along with the completion of the hauling road, which will be integrated into coal mines in Muara Enim. RMKO also sees opportunities beyond coal mines and the South Sumatra area.

"Later, this hauling road will improve RMKO's operational performance, especially upstream (loading at the mine), and, in parallel, improve RMKE's operations downstream (unloading)," said Vincent.

In other words, RMKO is a complement to logistics services in the upstream process, which will later support RMKE's downstream business activities that focus on coal logistics services. With the integration of upstream and downstream logistics services, the group's performance can improve continuously.

Vincent said the potential of coal in South Sumatra is still very large. If the upstream and downstream infrastructure is well connected, as well as the availability of professional mining support services, he is optimistic that he can increase production capacity in South Sumatra.

Regarding the depressed selling price of coal in 2024, Vincent said this had no direct effect. The reason is, as well as RMKE, RMKO is a mining contractor that provides coal transportation services that focus upstream.

However, RMKO does not sell such coal. RMKO only executes mines and transports mining products upstream so that it does not affect changes in coal prices directly.

"The risk of coal fluctuations can be mitigated by good operational efficiency costs, such as maintaining a lower stripping ratio and efficient fuel use," said Vincent.

As an illustration, PT Royaltama Mulia Kontraktorindo was established in 2017 with the initial name PT Chain Mulia Kontraktorindo. The company changed its name to PT Royaltama Mulia Kontraktorindo in 2022.

In 2020, RMKO started the construction of TBBE mining infrastructure, worked on a 39-kilometer hauling road project in 2021, and began to become a mining contractor at IUP TBBE and an executor of railway coal loading activities at RMUK emplacements in 2022.

Image source: RMKO

Source: Mulia (RMKO) Targetkan Hauling Road 39 Km Rampung di 2024

Image source: RMKO

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