Antam?s 9mo net profit down by 58% on lower nickel prices
Saturday, November 1 2008 - 12:42 AM WIB
The decrease is attributed to lower sales revenue from nickel combined with increased costs associated with higher fuel and materials prices. Antam?s net profit fell 58% compared with the Rp3,831 billion and EPS of Rp401.69 in the first nine months of 2007.
CEO Alwin Syah Loebis said that th company would look for ways to cut costs amid falling nickel prices by redesigning FeNi III smleter next year and possiby cutting nickel production.
Revenue decreased 8% to Rp7,576 billion compared to Rp8,270 billion in the first nine months of 2007. Despite a 36% higher sales volume of ferronickel to 12,616 tonnes nickel contained in ferronickel, lower nickel prices during the first nine months of 2008 lowered nickel sales revenue by 24% to Rp5,560 billion.
Sales of contained nickel increased due to the higher ferronickel production during the first nine months of 2008, largely due to stable and safe operations of Antam?s ferronickel smelters, including the FeNi III smelter. Despite higher sales volume, revenue from ferronickel was 14% lower at Rp2,898 billion as the average selling price of ferronickel dropped by 38% to US$11.29 per lb.
With the lower nickel demand during the third quarter of 2008, sales volume of high grade nickel ore increased by only 2% over the same period last year to 2,791,664 wmt. Lower demand also decreased sales of low grade nickel ore by 29% to 1,744,893 wmt. Inline with a 23% lower sales price of nickel ores at US$63.48 per wmt, total nickel ore sales revenue in the first nine months of 2008 decreased by 31% to Rp2,662 billion if compared to the first nine months of 2007.
Meanwhile, Antam?s gold sales for the nine month period increased by 72% to 6,424 kg due to the extensive gold trading by Antam?s precious metals refinery unit, Logam Mulia. Antam?s trading activities mostly consist of buying gold scrap and reprocessing it into pure gold bars for sale. Gold production in the first nine months of 2008 amounted to 2,072 kg, a 3% decrease compared to the same period last year. This is attributed to lower grades of gold ore. During the first nine months of 2008, the gold grades amounted 9.48 grams per ton, compared to 9.74 grams per ton reached during the same period last year.
The cost of goods sold rose 77% to Rp4,853 billion due to the increased materials cost as well as higher ore mining fees inline with higher fuel prices. ver some payments such as payment to supplier Rp5,000 billion, tax payment of Rp1,484 billion and payment to commissioners, directors and employees of Rp515 billion contributed to lower net cash provided by operating activities by 64% to Rp1,503 billion. (alex)