Company Update: 23 December 2025
Sales volume doubled in 3Q25, yet profitability pressured by lower coal prices
- Strong 3Q25 sales volume amid pricing headwinds. Geo Energy reported a 100% YoY surge in sales volume to 3.4Mt in 3Q25, driving revenue to US$136.6mn, a 62% YoY increase. However, net profit declined 55% YoY to US$3.2mn due to softer ICI4 coal prices averaging US$42.10/tonne down from US$51.64/tonne in 3Q24. Cash profit margin compressed to US$6.56/tonne from US$12.04/tonne, reflecting pricing pressures. Despite near-term headwinds, the company’s resilient cost structure and strong balance sheet position it well for recovery.
Infrastructure expansion to unlock operational efficiencies.
The US$150mn MBJ Integrated Infrastructure Project has achieved 50% completion and remains on track for June 2026 completion. The 92km hauling road and jetty will reduce transportation costs by over US$10/tonne and enable TRA production to scale to 20-25Mt per annum. Third-party leasing of the infrastructure will create recurring revenue streams, enhancing future profitability.
Strategic vertical integration strengthens logistics control.
On 27 August 2025, Geo Energy announced acquisitions of, two integrated shipping companies, which will help enhance delivery certainty and reduce transportation costs. Funding for these acquisitions was secured on 29 September 2025, with a US$275mn loan facilities from Bank Mandiri.
Valuation & Action
We maintain our OUTPERFORM rating with an increased target price of S$0.76 from the previous S$0.69, remaining positive on Geo Energy, reflecting the higher sales volume and our view of resilience in coal demand over the longer run.
Risks
Global coal price volatility, decline in coal demand, Indonesian coal export tax implementation, government-mandated production cuts, evolving energy transition policies, environmental concerns, infrastructure project delays, and execution risks.
