Aneka Tambang Q3 reports: 13 percents hikes in sales revenue

Publicly listed state mining company PT Aneka Tambang Tbk, today reported Quarterly sales revenue reaching Rp 372,060m (US$ = 9200), and brings the 9 month total to Rp 1,097bn , which exceeds the total realized sales revenue for 1999 by 13%.

Antam's sales revenue was 12% lower in 3Q00 compared to the previous quarter yet 56% better than the same period of 1999. With sales revenue reaching Rp 372,060m, the 9-month total of Rp 1,097bn exceeds the total realized sales revenue for 1999 by 13%. In terms of export revenues, the company has taken in a total US$128m for the first nine months of 2000. The decreased quarterly sales revenue is due to reduced nickel and bauxite sales and lower associated sales prices.

For the year to date, Antam is in a better position than last year due to overall strong production and sales volumes, a weak Rupiah and a good nickel and gold price during the first half of the year.

Contained nickel and low grade nickel ore sales revenues decreased during the quarter. Ferronickel sales revenues decreased by 40%, due to a 39% sales volume decline and an 8% lower nickel price. As detailed above, the nickel sales decrease is due to a delayed shipment, which eventually left on 23rd October. Antam is back on track to meet sales targets for year-end 2000.

Low grade nickel ore revenue declined 33% during 3Q00 on the back of a 13% decrease in sales volume and 29% decrease in sales price. This counters the 61% production increase. The reduction is due to the lower sales price, caused by a lower nickel content in the ore compared to the unusually high content in that of second quarter.

Bauxite revenue fell 20% during the quarter following a 27% sales volume decrease.

Gold and silver export revenues both increased during 3Q00 by 28% and 41% over the previous quarter respectfully, contrasting price declines 12% and 6%. Local gold sales enjoyed a 111% increase over 2Q00.

The average nickel price achieved during 3Q00 decrease by 8% over the second quarter. The low grade nickel ore price declining by 29% reflects the price normalizing following a shipment in the previous quarter of higher than normal nickel content, which raised the price. Low grade nickel ore was sold with a content of 1.8 - 2.0% nickel which is higher than the 1.5% and commands a premium.

The realized high grade nickel ore price rose from Pomalaa and Gebe by 17% and 18% respectively, while the nickel price itself dropped. This is as the price of nickel ore is established 3 months prior to invoicing, when in relation to third quarter, the nickel price was higher.

Antam is on track to meet its financial targets for the year 2000, except for iron sand, which is at 55% of the target. This comes following reduced sales due to decreased demand from the local cement industry.

PRODUCTION

During 3Q00, production hummed along very smoothly with increases for low and high-grade nickel ore, gold and silver and minimal decreases for ferronickel, bauxite and iron sand. Antam is on track to meet or slightly exceed its production targets for 2000.

The quarterly production volume of high-grade nickel ore increased 31% higher over 2Q00, while matching that of the same period last year. The production volume of low-grade nickel also increased 61% and 30% higher in comparison with 2Q00 and 3Q99. These production increases are due to a normalization of production following the use of additional dump trucks at the Gebe mine (which had a slight production decrease in the first half of the year due to staff members' fears of regional security) and slightly better weather than the previous quarter (3Q00 36 days/653 mm, 2Q00 57 days/887 mm, 3Q99 50 days/1086 mm)

Ferronickel production decreased in 3Q00 by about 5% from 2Q00 and was 9% lower if compared to 3Q99. This slight decrease is caused by the routine yearly overhaul of the 10 generator 55MW power plant.

Antam's sales of high-grade nickel ore from Pomalaa and Gebe decreased by 16% in comparison with 2Q00 and decreased 10% lower than third quarter last year. This is due to a delayed shipment, which was pushed back until 1st October 2000.

Ferronickel sales declined 39% lower than 2Q00 and 17% down if compared to third quarter last year. The drop is due to a delayed shipment to Newco (of about 650 tons), which eventually left on 23rd October. As of end of October 2000 ytd sales had reached 8102 tons. Planned deliveries of 1885 tons will bring the years total to 9987 tons. Further a possible agreement to sell 74 tons of undersized shot will bring the total above the year's target of 10,000 tons sold FeNi.

Antam's Pongkor gold production increased 12% in 3Q00 compared with 2Q00 and was 19% higher than third quarter last year. Silver production also increased over that of both earlier periods. The increases are thanks to an increase of the feed ore, while gold content was relatively the same. Meanwhile, sales of gold and silver increased 26% and 55% higher compared with 2Q00 were 36% and 47% higher than third quarter last year.

Ore throughput for the feeding mill increased 10% in 3Q00 over both last quarter and 3Q99. The increase in attributed to development at the mine's Ciurug vein. Since mid-August the activity of illegal miners was further reduced (they number less than 500) when illegally dug holes were closed by blasting and then replanting.

This comes in conjunction with innovative and effective community relations and environmental initiatives, which have would-be illegal miners employed in a road construction project. As well, on August 16th, 2000 locals viewed a screening of a video produced by Antam and the Min. of Environment on the environmental and health dangers of using mercury to extract gold. This event was reported on by the Australian television program Dateline on SBS and portrayed during their show of 18th October.

The production volume of washed bauxite slightly decreased slightly but has reached 98% of the year's target. Production of iron sand concentrate was equal with the previous quarter and was 7% below the same period of last year.

The sales volume of washed bauxite decreased at 27% against 2Q00 but was 26% higher than the same period last year. Total bauxite exports as of the end of 3Q00 have surpassed the 2000 target.

The sales volume of iron sand concentrate was 26% higher than 2Q00 and 178% lower than 3Q99. This is 55% of the target for 2000 with the decrease attributed to reduced demand from cement producers. (Alex)