The Board of Investments approved the application for tax incentives of Titan Mining and Energy Corp., a unit of Coal Asia Holdings, as a new coal producer in Davao Oriental and Zamboanga Sibugay with a non-pioneer status.
Coal Asia said the incentives included a four-year income tax holiday from January 2016 or the actual start of commercial operations, zero-duty on importation of capital equipment, spare parts and accessories and other incentives given by the BoI.
“The impact of these BoI incentives on the company’s bottom line is very significant and can be a catalyst for further growth. Its revalued earnings forecast will be a positive driver of the company stock price,” said Aldo Claparols, a fund manager at DA Market Securities.
“The income tax holiday will significantly revalue the company’s 2014 income from P500 million to P714 million based on a 30-percent absorption of supposed tax back into the company’s bottom line which would result in a PE ratio of 4x making it far and away the cheapest energy stock in the PSE,” the source said.
Coal Asia chairman Harald Tomintz lauded the government’s support for projects that would contribute to industrial growth and economic upliftment, particularly in the countryside and in the southern part of the country.
“The BoI approval of incentives strongly signifies government’s commitment to pursuing its development thrust to the local coal industry. Data from the Department of Energy reported a historical average of 2.2 million metric tons in local production. This output tripled to an average of 6.7 MMT in the last three years. Coal Asia, through its subsidiary Titan Mining, is proud to play a role in contributing to the continued success of the industry,” Tomintz said.
Coal Asia recently concluded its capital enhancement exercise with an initial public offering, raising P800 million. Of the proceeds from the IPO, P105 million will be spent for the completion of the exploration and feasibility study of the Davao Oriental mine, P432 million for the development of the Davao mine, and the balance for continued exploration at the Zamboanga Sibugay mine and for working capital requirements. source
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