Antam reports decreasing Q1 earnings on lower sales, increasing costs

JSX-listed state nickel and gold miner PT. Aneka Tambang on Monday reported fisrt quarter 2006 net profit of Rp.132 billion (US$=Rp.8,800) and earnings per share of Rp.68.69, or 18 percent lower than previous year?s corresponding earnings.

The company attributed decreasing earnings to lower sales volume of nickel ore and gold, lower ferronickel and ore prices and higher fuel and material costs.

Antam?s consolidated net sales down by 6 percent to Rp.563 billion as revenues from nickel division sales, which accounted for 78 percent of net sales, dropped by 4 percent to Rp.439 billion.

Ferronickel revenue increased 8 percent to Rp.197 billion due to a 15 percent increase in sales volume to 1,576 tonnes despite the nickel price decreasing to US$6.13 per pound. Antam?s production of nickel contained in ferronickel increased 104 percent to 2,706 tonnes. Ferronickel accounted for 35 percent of Antam?s net sales. Antam said it was confidsent to reach 2006 ferronickel production target of 20,000 tonnes due to commencement of FeNi III smelter, which would begin commercial operations this month.

Antam?s nickel ore revenue, which accounted for 43 percent of total sales, dropped 12 percent to Rp242 billion.High grade nickel ore revenue decreased by 11 percent to Rp218 million. Although production of high grade nickel ore increased by 15 percent to 672,000 wmt, sales volume dropped 5 percent to 562,000 wmt and average selling price decreased 7 percent to $14.23 per wmt.

Net sales from gold division dropped 23 percent to Rp80 million and accounted for 14 percent of total sales. Antam?s gold production dropped 17 percent to 466 kgs during the quarter due to technicalities in its Pongkor mine.

Production cost increased by 35 percent to Rp457 billion, mainly due to increases in fuel and material prices.(alex)